>>> Uber says it losing $1 bln a year to compete in China - RTRS

Uber says it losing $1 bln a year to compete in China - RTRS

18-FEB-2016 10:28:19
SHANGHAI, Feb 18 (Reuters) - The chief executive of Uber Technologies Inc UBER.UL said the company is burning through more than a billion dollars a year in China, where it is locked in a fierce battle with larger local rival Didi Kuaidi to lure consumers with cut-price deals.

Uber's China unit boosted its valuation last month to more than $8 billion after it raised over $1 billion in its latest funding round, although the U.S. ride-hailing app is not yet profitable in the mainland due to intense competition. (Full Story)

"We're profitable in the USA, but we're losing over $1 billion a year in China," Uber's CEO Travis Kalanick told Canadian technology platform Betakit. Uber officials in China confirmed the comments in an email to Reuters on Thursday.

"We have a fierce competitor that's unprofitable in every city they exist in, but they're buying up market share. I wish the world wasn't that way."

Uber and China's Didi Kuaidi, backed by Chinese technology giants Tencent Holdings Ltd 0700.HK and Alibaba Group Holding Ltd BABA.N, have both spent heavily to subsidise rides to gain market share, betting on China's Internet-linked transport market becoming the world's biggest.

Uber China said in an emailed statement that Didi Kuaidi was having to spend "many multiples" more than the U.S. firm to increase its share of the market, adding that Uber's China operation was backed up by profitable ones outside the region.

A spokesman for Didi Kuaidi, which has the biggest market share of China's car-hailing app market, did not provide an immediate comment when contacted by email.

In January, Kalanick said spending on subsidies is "how you win" in China, adding that Uber aimed to beat Didi Kuaidi by spending subsidies more efficiently. Uber currently operates in over 40 Chinese cities and plans to be in 100 by the end of the year.

"I prefer building rather than fundraising," Kalanick added in the interview with Betakit. "But if I don't participate in the fundraising bonanza, I'll get squeezed out by others buying market share."

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(GS) Europe : Utilities : Further structural gas price downside; EDP onto Convic

Further structural gas price downside; EDP onto Conviction Sell List

* Significant further downside to gas/power prices creates risks
We believe the recent decline in European gas prices (down 26% over the
past three months) is structural and likely to persist owing to an
oversupplied global gas market (see our Commodities team’s report
Overpowered: Too much fuel is competing for the same fleet of power
plants, February 15, 2016). We cut our gas price assumptions and see 18%
further potential downside to market prices. Lower gas prices have several
negative implications for European utilities, namely: (1) lower power
generation profits; (2) lower E&P earnings; and (3) losses in gas/LNG trading.
* EDP added to Conviction Sell List: Unsustainable dividend, balance
sheet and valuation, as well as political intervention risks
We believe the expiry of fixed-price power generation contracts in Portugal
in July 2017 will lead to lower (7% negative EBITDA impact) and more
volatile earnings for EDP. We expect high leverage (2016E net debt/EBITDA
of 4.7x, well above management’s target) to compound these risks and
undermine the stock’s premium valuation (EDP currently trades at a 30%
EV/EBITDA premium to our coverage over 2016-18E). We expect the likely
extension of the energy tax in Portugal beyond 2016 to highlight dividend
risks (we estimate a payout ratio above 100% from 2017).
* Fortum, Verbund and EDPR valuations stretched: Down to Sell
We downgrade Fortum and Verbund to Sell from Neutral as we see their
premium valuations as unjustified following large cuts in our estimates and
price targets as a result of lower power prices. We also downgrade EDPR to
Sell as we see headwinds to its growth outlook from lower energy
commodities prices and from the need to carry out potentially dilutive
disposals to help its parent company EDP’s stretched balance sheet.
* Value in Gas Natural and A2A: Up to Buy from Neutral
While Gas Natural and A2A are negatively affected by lower gas prices, their
recent underperformance leaves both stocks offering deep value in our view
and we upgrade them to Buy. We believe the current valuation discount for
Gas Natural is excessive as we expect the earnings decline from the gas
supply/liberalised electricity business in Spain to be offset by growth from
regulated activities. We expect A2A to generate FCF equal to 38% of market
cap over the next four years and see material catalysts (increased cost cutting,
higher dividends, M&A). We remove Hera and Acciona from the Conviction
List (both remain Buys) and upgrade to Neutral from Sell Enel, CEZ (both
post underperformance) and Terna (on limited sector-relative downside).

>>> Street Pre-Market Indications

CS:
Air France +5% FY EBITDA 10% beat, sales 2% beat, Op profit 29% beat
Accor +1-2% EBIT inline, 2 small acquisitions, no guidance
Adecco +1-2% Read across from Randtad numbers
Anglos +2-3% S32 Would Be Buyer of Anglo Manganese Stake at Right Price
Arcadis +1-2% Revenues inline and net profit slightly light
BAE Systems M/P 2015 numbers inline with market estimates
BCV M/P Revs 3% beat, operating profit inline
BMW M/P Buoyed U.S. Sales Numbers by Paying Dealers to Buy Loaners
Capgemini +1-2% 2015 revs EU11.9b vs est. EU11.9b, strong cash flow
Centrica +1-2% FY Adj. EPS Beats Est., Posts Impairments in E&P, Power
Deut Boerse +2% 2015 adjusted EPS inline, dividend slightly ahead
Fres Med +1% Reaches pact on Granuflo litigation
Go-Ahead +1-2% H1 numbers inline, FY guidance unchanged
IHG +1-2% US peer MARRIOTT (MAR US) guided to 2016 comp RevPar +3-5%
KBC -1% PBT 1% light, CET1 14.9% cons 14.6%)
Kudelski +3-4% FY Revs 2% beat, Net income 7% beat, divi inline
Lancashire -1% FY look more or less in line, Chairman to step down
Miners +1% Copper +0.50%, Brent +1.90%, Iron Ore +1.40%, China +0.26%
Oils +1% U.S. API crude oil inventories dropped 3.26m barrels
Nexans +5% 2015 sales 1.5% miss, won't propose divi, confident on 2017
Nestle -1-2% No buyback, organic growth slightly disappointing
Oriflame +1-2% Q4 sales slightly light but EBITDA inline
Randstad +3-4% 4Q sales EU4.96b vs est. EU4.96b, dividend better
Richemont -1% Swiss watch - shipments falling 8% y/y, vs -3.8% in Dec
Swatch -1% Swiss watch - shipments falling 8% y/y, vs -3.8% in Dec
Tullow -10% Potential issue with turret bearing in Jubilee FPSO
TF1 -3-4% Revs inline but outlook disappointing
Vodafone -1-2% To raise GBP 2.9bln via Mandatory conv bond issue


Numis:
* AUE (+5%) +ve update on progress at Liberty
* BABCOCK (+1%) BUY, declines hard to understand; Times
* BAE SYSTEMS (+3%) Beat on all lines, large backlog, upbeat statement
* CENTRICA (+1-2%) EPS ahead, DPS in line despite weak price environment
* COUNTRYSIDE (-1%) AVOID, Hybrid nature means hard to value; Times
* GLENCORE (mkt) SELL in the Questor column: Telegraph
* GO-AHEAD (+1%) H1 in-line, Div increased 6.5%, outlook unch
* INTERSERVE (+3%) BUY, in the Tempus column; Times
* LANCASHIRE (+2%) Q4 Profit beat, CR strong & lower reserve release
* PURECIRCLE (+1%) new CFO appointed
* REXAM (mkt) #'s in line, expects tough 2016, Ball to complete late H2
* SEGRO (+1%) JV with Roxhill big box logistics, cost £800m over 10 yrs.
* TULLOW (-2-3%) Issue identified with turret bearing on Jubilee FPSO
* VICTORIA O&G (+5%) Secures 75% interest in Matanda Block in Cameroon


MS:
AC FP RESTR FY EBIT INLINE WITH CO GUIDANCE RANGE AND CONSENSUS. NOT MUCH ON OUTLOOK
AF FP -1% Q4 BEAT DRIVEN BY BETTER REVS - FOCUS ON 2016 GUIDANCE WHICH REMAINS UNCERTAIN
BA/ LN UNCH FY15 NUMBERS TOUCH AHEAD, FCF GUIDANCE A SMALL CONCERN, STOCK +10% SINCE FRI
CAP FP +2% FY RESULTS BETTER, GUIDE IN LINE, SBB SHOULD HELP
CNA LN +3% FY 15 NO.S BEAT - REIT 3-5% CASH FLOW GROWTH - CONFIRM DIV POLICY
GEN DC -5-10% THE FY NUMBERS WERE FINE, BUT LOOKS LIKE A BIG GUIDANCE MISS
GET FP -1-0% FY15 NUMBERS OK BUT GUIDANCE SLIGHTLY LOWER. MAY CLAIM DAMAGES BACK FROM GOVT.
GOG LN UNCH FY IN LINE,GUIDANCE UNCHANGED
INDV LN UNCH REVS IN LINE,2016 FORECAST MAINTAINED
KBC BB -2% P&L LIGHT IMPACTED BY COSTS & PROVISIONS OFFSET BY STRONG CAPITAL BUILD (+90BPS QOQ) - TRAVELLED WELL INTO NO.S
LRE LN -1-2% DECENT UPDATE ,NO SPEC DIV AND CHAIRMAN RESIGNING OFFSETS
MRW LN +2% BID SPEC IN DAILY MAIL-TESCO/PVT EQUITY, 275P MENTIONED
MTX GY +1.5% DEUTSCHE RAISED MYU TO BUY FROM HOLD
NESN VX -2-3% Q4 ORG IN LINE AT 4.2%, MGNS 30bps LIGHT. FY GUIDANCE IS BELOW CONSENSUS (4.2% VS 4.7%).
NEX FP +2-3% OK SALES. CO CONFIDENT TO MEET 2017 STRATEGIC OBJECTIVES. SI 5%.
RAND NA +1-2% NUMBERS ALL INLINE WITH CONS; Q1 TRENDS LOOK OK, BUT LIMITED VIZ AND TOUGHER COMPS
TFI FP +1-2% HEADLINE NUMBERS GOOD BEAT BUT OUTLOOK CAUTIOUS.
TLW LN -2% CAUTIOUS GHANA OPERATIONAL UPDATE,POTENTIAL ISSUE WITH TURRET BEARING
TTK GY +2% TAKKT PROPOSES 0.5 EUROS DIV

Baader helvea
* ADEN VX +1.5% peer Rantstad (indic +2%) solid 4Q, rev matches est, divi beats
* ADS GY unch hires former Lululemon CEO as adviser - good strategic move
* ALV GY +1.1% cuts US risk in $1.1b trasfer deal with Enstar
* BAYN GY +0.9% GOP lawmaker wants thorough FDA review of Bayer birth control device
* BCVN SW +0.8% Fy net better Chf336m (c324), divi inc to £33 (prev 32), CET1 ratio 17.6% solid
* BMW GY +1.0% buoyed US ales no by paying dealers to buy laoners - Bbrg
* CFR VX -1.0% Jan Swiss watch exports -7.9% YoY, 7th consecutive decline. HK -33.1%, USA -13.7%, China -1.9%, Japan +35.8%
* CSGN VX +2.0% investor Herro backs Thiam on overhaul plans
* DB1 GY +2.5% FY earning in line, focus is on outlook, sees strong profit gwth of +10-15%, encouraging start into 2016. Org net rev gwth seen at +5-10%.
* FME GY +1.1% reaches pact on GranuFlo/NaturaLyte litigation
* IFX GY +0.6% TSMC sales f/cast, ex FX lower than previous view. Cust 1Q g.margin f/cast
* KUD SW +1.5% FY above and renewed +ve gwth momentum to sustain in 2016
* NESN VX -1.8% FY uninspiring, Rev Chf 88.79b (c89.42), org sales gwth 4.2% (c4.2), divi Chf2.25 (c2.25). Trading op profit Chf3.38b (c13.78). No SBB
* NOVN VX +1.0% Alcon to regain foothold in glaucoma through acq'n of Transcend Medical
* TTK GY +6.0% FY sales €1.06b (c1.05), Ebitda 157.3m (c152.9).plans 35-45% divi payout ratio (prev 30%)
* UHR VX -1.0% Jan Swiss watch exports -7.9% YoY, 7th consecutive decline. HK -33.1%, USA -13.7%, China -1.9%, Japan +35.8%