Investment idea: Apple and Meta

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PSG Financial Services

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Published on May 16, 2022 5:54:19 AM ● Video Link: https://www.youtube.com/watch?v=t4mmHIVxcV0

Duration: 7:30

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- Meta Platforms, doing business as Meta and formerly known as Facebook, is an American multinational technology conglomerate.
- The group released 1Q22 results on 27 April 2022.
- Revenue increased by 6.6% to $27.9 billion.
- Growing competition (engagement shift towards less monetisable video services) and pricing headwinds (Apple’s iOS changes affected ad targetability) impacted revenue growth.
- Daily and monthly active users grew by 78.8 million and 99.2 million, respectively.
- The operating profit and corresponding operating margin decreases were attributed to higher research and development (R&D) costs; management guided that the benefits from R&D would not be realised in the short term.
- The group saw soft e-commerce growth for the first quarter after acceleration during the pandemic and lacklustre advertising demand in Europe due to uncertainty provided revenue headwinds.
- We have a hold recommendation on Facebook.

- Apple is an American multinational technology company specialising in consumer electronics, software and online services.
- The group released 2Q22 results on 28 April 2022.
- It set another second-quarter revenue record, with total sales of $97.2 billion (+8.6%).
- Supply chain constraints had a substantial negative impact on iPhone sales.
o Management announced that these constraints could lead to $4 to $8 billion headwinds in the next quarter.
- Overall product sales were up 6.6% to $77.5 billion.
- The board announced an additional $90 billion of share repurchases and a record 1.8 billion active connected devices.
- We have an intrinsic value of $163 on Apple.
- Our current recommendation is to hold.

- For more information about this counter, please contact your PSG Wealth adviser.