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BenzingaEditorial

The Media Sector Fighting for Survival Through Streaming

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Roku Streaming

Media companies produce and distribute the content we ended up consuming more than ever before when COVID-19 started its relentless march across the globe. Whether it is in the form of film, television series, music, books or radio programming, these companies provided the world with the much-needed therapy during the lockdown.

Due to intense streaming wars ran by services a la Netflix (NASDAQ:NFLX), much of the media industry’s power has been consolidated in just a few names such as Walt Disney (NYSE:DIS), Discovery (NASDAQ:DISCA), and ViacomCBS (NASDAQ:VIAC). Some have been acquired by telecom companies such as AT&T (NYSE:T), owner of WarnerMedia, and Comcast (NASDAQ:CMCSA), owner of NBCUniversal. By joining forces, they integrated quality content with powerful distribution. The competitive pressure is intense as even radio producers have turned to podcasts to capitalize on this opportunity.

Clear winners

As more people cut the cord and more advertisers shift their ad budgets away from TV towards direct-to-consumer platforms, Roku (NASDAQ:ROKU) and Amazon (NASDAQ:AMZN) are set to benefit from these trends. These two growing players will only get stronger as competition in the streaming space grows. As media companies need to stand out, this trend will directly support their long-term revenue growth.

Discovery – Olympics

Discovery (NASDAQ:DISCA) owns strong content and brands, including HGTV, the Food Network, and its namesake channel. But the main asset of the communications giant is its portfolio of sports rights that allows it to span all over the globe. Its main jewel are the Olympic Games. Over the last five years, yearly sales growth amounted to 12.20%. When it reported its latest quarter in June, earnings per share amounted to $0.77 exceeding consensus estimates by $0.07.

Netflix isn’t scared of competitors

Although Disney+ achieved a record pace of new subscribers, Netflix (NASDAQ:NFLX) remained as the largest direct-to-consumer video service in the world. As of 2013, it even started its original production to be less reliant on others for content. Despite fears, it is doing more than fine. In the last quarter reported in July, Netlix delivered a profit of $2.5 billion on increasing revenues of $6.15 billion. It blew estimates and eased concern it could be crushed by upcoming competitors with free cash flow of $1.06 billion, EBITDA at $9.77 billion, profit margins of 11.90%, ROE of 33.30% and ROA of 7.80%.

Netflix’s massive scale provides it with a lot of data it can use to improve the user experience and optimize its content production. While it fuelled its content library expansion through increased debt, the company’s growing recurring revenue and improved operating margin should lead to improved cash flow and give the streaming giant the ability to self-fund content investments in the future.

Disney

When it acquired 21st Century Fox, Walt Disney (NYSE:DIS) became one of the biggest media companies in the world. The iconic House of Mouse has a portfolio of intellectual properties that goes beyond legacy Disney Brands as it now includes Star Wars, Marvel and Pixar. Moreover, it has strong television brands such as ESPN with long-term contracts to broadcast premium sporting events. Its push into direct-to-consumer streaming has gone well since it acquired operational control of Hulu and launched its streaming star, Disney+. Both are bolstered by its acquisition of BAMTech, a streaming technology provider. Although its theme-park and cruise business slumped during the pandemic, streaming was a rare bright spot. Unfortunately, it will take a while before this segment reaches profitability. Theme parks produce a much higher operating margin and therefore, play a much significant role in company’s performance which was nearly wiped out.

But, its fiscal fourth quarter is about to end and with it, this brutal fiscal year. The figures won’t be pretty but there should be an improvement over the vicious 42% decline in revenue that it posted for its fiscal third quarter. After all, the current quarter is the period when theme parks reopened, sports programming returned to ESPN, and movie theaters started opening their doors. Fiscal 2021 can’t start soon enough for Disney.

Viacom

ViacomCBS (NASDAQ:VIAC) ensures a broad distribution and large audiences as its cable networks are well diversified across audience demographics. After all, it operates one of the four broadcast networks in the U.S. which has its perks. Although the company had many  carriage disputes with distributors, adding the CBS broadcast network should strengthen its negotiating power. Meanwhile, joining CBS and Paramount should result in sufficient content to feed its own networks, including direct-to-consumer services. During its second quarter, VIAC showed it was able to absorb the blow to its advertising business by reporting a profit of $2.79 billion with revenues increasing to $6.28 billion. With free cash flow of $1.02 billion from June, EBITDA at $1.41 billion which compares well with its peers, ViacomCBS Inc has strong fundamentals that helped it deal with a 27% drop in advertising and lack of sports. With a market cap of $18.15 billion, it is increasing its credibility in this sector as its digital revenue jumped 25%, boosted by a 52% increase in streaming subscription revenue.

Outlook

The COVID-19 pandemic was double trouble for pay-TV industry because advertisers reduced their budgets and consumers started cancelling subscriptions as sport events and TV series productions were delayed or annuled. eMarketer forecasted that around 6.6 million U.S. households will cut the cord in 2020 with ad spending dropping 15%, forcing media companies to focus on direct-to-consumer content. As more consumers cut the cord and advertisers move to digital platforms, streaming players are set to thrive. Moreover, Roku is well-positioned to benefit from them all.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

The EV Industry Is Worth More Than The Traditional Automakers

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Many things that were considered to be impossible actually happened in 2020. One of them is that electric vehicle makers became more valuable than traditional automakers and by about by about $100 billion, according to Barrons. EV makers are now worth about $1.3 trillion whereas traditional car makers combined have a market capitalization of about $1.2 trillion. This figure includes 100 auto makers around the globe with market caps ranging from $10 million all the way to Tesla’s (NASDAQ: TSLA). Based on its fully diluted share count, Tesla is worth about $1 trillion.

This feat is even more impressive if you consider that this is a much smaller industry based on actual number of cars. The last year taught us that the connection between the stock market and the economy is imprecise at best. However, the fact that technology enabled batteries to overpass ICEs is the kind of disruption that investors look for. Even though Tesla is the main contributor to the value of the EV market, the overall image is just as impressive as three of the top five most valuable are EV makers, with Tesla being followed by NIO (NYSE: NIO) and BYD (OTC: BYDDF). As for traditional automakers, Volkswagen (OTC: VWAGY) and Toyota (NYSE: TM) are the most valuable ones with both undergoing serious investments into electrification.

Traditional automakers are going electric

On Friday, BMW said it aims to double its sales of fully-electric vehicles this year. Including plug-in hybrids, it aims for a 50 percent increase in sales of electrified vehicles versus 2020. It did not give sales volumes for its fully electric vehicles but in data released on Tuesday, BMW said it sold close to 193,000 electrified vehicles, including fully electric and plug-in hybris in 2020. As a reminder, Tesla delivered almost half a million all-electric models last year, which is 75% of General Motor’s (NYSE: GM) third-quarter deliveries.

The automotive industry is at an inflection point

BEVs take approximately 1% of the total market for light vehicles, but the figure rises to about 3% if we include hybrid and plug-in hybrids. Why exactly it takes a relatively small market share to disrupt an industry is a bit of a mystery, but one reason is that more investment capital tends to flow in when market share come is within the 3% to 5% range. As more capital drives more innovation and improvement, investors are lured by high growth rates, bringing in even more capital and this is how success is made. Over the past year, EV makers have raised more than $20 billion in fresh capital, which is a fraction of what traditional auto companies spend on plants and equipment. However, on a per car basis, the EV industry is investing at roughly 10 times the rate of the traditional industry. Add to this President Joe Biden’s aim of a carbon-free future by 2035 and the drive toward adoption of EVs which is already seeing impressive results in Europe, the all-electric future is around the corner.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Europe and EVs- A Blossoming Relationship

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Tesla (NASDAQ: TSLA) delivered around 96,000 units to the key European EV market in 2020. But in Europe, Tesla’s cars were overtaken in popularity by Volkswagen (OTC: VWAGY) and Renault (OTC: RNLSY). Sales of electric vehicles by European car makers accelerated rapidly in 2020 amid severe fines for car markers whose fleets don’t meet new emissions targets and generous incentives for buyers to trade in their ICE vehicles.

Volkswagen

Volkswagen reported it delivered 212,000 electric cars across the globe in 2020, which is 158% more than in the year prior. 134,000 of those vehicles were battery-electric vehicles, which grew 197% compared with 2019. Volkswagen also said that its ID. 3 model was the top-selling car in Sweden in December by absolute numbers. All-electric Volkswagen models were on top the Netherlands and Germany, taking approximately 23% of each country’s BEVs market.

Mercedes Benz

On January 8th, Mercedes-Benz-owner Daimler (OTC: DDAIF) said that the brand sold more than 160,000 plug-in hybrids and all-electric vehicles in 2020, representing growth of more than 228% from 2019. The share of EVs in Daimler’s sales mix rose drastically from 2% in 2019 to more than 7% in 2020. Also, Mercedes-Benz brand remained the world’s top-selling luxury carmaker for the fourth consecutive year.

Renault

Renault reported that it doubled its electric-vehicle sales in Europe. While group sales fell more than 21% in 2020, its EV sales grew 100% growth from 2019 to 115,888 vehicles. Moreover, total orders at the end of December 2020 were up by 14% compared to December 2019, which was attributed to new hybrid offerings. EVs were the only good news in an otherwise bleak 2020 for the French carmaker, which underperformed both global and European car markets. At the very least, Renault avoided fines as it met its 2020 EU emissions targets. On January 14th, its chief executive officer Luca de Meo will present a strategy update which is expected  to include reviving some older best-selling models as all-electric models.

BMW

BMW (OTC: BMWYY) which also owns Mini, said that its two brands combined sold 192,646 electric vehicles in 2020 marking an increase of nearly 32% from last year. BMW also met its 2020 EU emissions targets.

Takeaway

European governments have created generous incentives to speed up the adoption of EVs, making them much more affordable. Come 2025 when emission targets become more stricter and threat of fines for not respecting them even greater, Tesla will certainly be playing against fully-fit opponents and could even potentially struggle. An EV-only future looks closer than ever in Europe as the race is now on to challenge Tesla’s leadership.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Lenovo Makes Its Star Market Debut

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The COVID-19 pandemic had completely changed the way people work and learn. Operating from home actually turned around declining PC sales. Smartphones have been picking more and more market share from PCs and if there was no pandemic, this would probably still be the case. But instead of decreasing demand, there was record growth in PC sales as video collaboration software was needed to fulfill the need caused by closed offices and schools. The demand generated months and months of production. According to Reuters, sales of desktops, laptops, and tablets are expected to reach the level of 300 million shipments, the first time after its peak in 2008. This made all the PC manufacturers like Dell Technologies Inc. (NYSE: DELL), HP Inc. (NYSE: HPQ), and Lenovo Group Ltd. (OTC: LNVGY) very happy.

Lenovo CDR story

China’s Lenovo Group is listed at the Hong Kong stock exchange, with about 12.04 billion shares outstanding in total as of January 12th. The company decided to issue Chinese Depository receipts (CDRs) which will be up to 10% of the total number of shares to be listed on the Star Market of the Shanghai Stock Exchange. The proceeds from the issuing of CDRs is planned to help the company’s research and development of new technologies, development of new products and solutions, and overall strategic investments in core segments. On Wednesday, the news caused to stock to drove the stock to its highest level since 2015.

The Star Market

The Star Market was launched in 2019 aiming for innovative technology companies that need more relaxed listing rules. In December, the Star Market counted 200 companies. A CDR or Chinese Depositary Receipt is a way for non-Chinese companies to list their shares in China. This is the equivalent to American depositary receipts (ADRs) which allow non-U.S. companies’ shares to trade on American exchange markets. Technically, CDRs and ADRs are not companies’ shares, but they represent an equity interest in a company. Besides Lenovo, an AI startup that specializes in facial recognition called Megvii Technology Ltd will also be among the first companies to benefit from this new structure.

Conclusion

Lenovo’s listing should be a breakthrough for Shanghai’s Science Technology and Innovation Board. Lenovo, a flagship of the Star Market, should attract much more followers and clear a path for many Chinese start-ups to raise capital in their home country. The company’s strong and growing global presence should continue to demonstrate the boom of China’s capital market and attract more investors to invest.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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