Podcast by Dom Cooke to explore big businesses, Business Breakdowns

Business Breakdowns

Podcast by Dom Cooke to explore big businesses

Learn how companies work from the people who know them best. We do deep research and interview industry veterans, investment professionals, and corporate executives to explain the inner workings of public stocks and private businesses. For each company, we break down their history, business model, financial statements, secret sauce, and bull/bear case. We believe every business has lessons to teach us and Breakdowns is here to highlight them. Learn more and stay up to date at www.joincolossus.com.

Equity Bottom-Up

<ul><li>Kering is a luxury house similar to LVMH, with brands like Gucci, YSL, Bottega Veneta, and Balenciaga</li><li>Gucci represents nearly 50% of Kering's revenues and over 50% of profits, with its popularity tied to fashion trends</li><li>Kering traces its history back to a diverse set of regional businesses before focusing on luxury under the leadership of Francois Henry Pinault</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>

Kering is a luxury house similar to LVMH, with brands like Gucci, YSL, Bottega Veneta, and BalenciagaGucci represents nearly 50% of Kering's revenues and over 50% of profits, with its popularity tied to fashion trendsKering traces its history back to a diverse set of regional businesses before focusing on luxury under the leadership of Francois Henry PinaultThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Kering: It’s Gucci - [Business Breakdowns, EP.199]

US-EU Index Rebalances / Quantitative Researcher, ORTEX

Dimitris Ioannidis

US-EU Index Rebalances / Quantitative Researcher

Global Financial Data and Analytics Platform

ORTEX

ORTEX is a global financial data and analytics platform providing real-time securities lending and short interest data, index rebalance data, holdings and insider transactions, trading signals, corporate actions and news,  stock machine learning and factor scores and other analytics. The majority of the data are downloadable and accessible through APIs.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kering" target="_blank" data-smartkarma-citation="entities:21492:1" rel="noopener">Kering (KER FP)</a> is the main candidate for direct deletion as it is the only constituent below the exit threshold. Forecasted supply is $750m and 9.7 ADV.</li>
<li>
<a href="https://www.smartkarma.com/entities/dsm-firmenich-ag" target="_blank" data-smartkarma-citation="entities:43730:1" rel="noopener">DSM-Firmenich (DSFIR NA)</a> is the main candidate for addition replacing <a href="https://www.smartkarma.com/entities/kering" target="_blank" data-smartkarma-citation="entities:21492:1" rel="noopener">Kering (KER FP)</a> as it is the highest ranked non-constituent. Forecasted demand is $1.3bn and 22.5 ADV.</li>
<li>
<a href="https://www.smartkarma.com/entities/nokia-oyj" target="_blank" data-smartkarma-citation="entities:21754:1" rel="noopener">Nokia OYJ (NOKIA FH)</a> and <a href="https://www.smartkarma.com/entities/volkswagen-ag-2754ab9c-fd60-43d7-a087-b4ce4465a0eb" target="_blank" data-smartkarma-citation="entities:734:1" rel="noopener">Volkswagen (Pref) (VOW3 GR)</a> are only 2% above the exit threshold. Potential replacements are <a href="https://www.smartkarma.com/entities/engie-sa" target="_blank" data-smartkarma-citation="entities:21449:1" rel="noopener">Engie SA (ENGI FP)</a> and <a href="https://www.smartkarma.com/entities/argenx-se" target="_blank" data-smartkarma-citation="entities:28604:1" rel="noopener">Argenx SE (ARGX US)</a>.</li>
</ul>



Kering (KER FP) is the main candidate for direct deletion as it is the only constituent below the exit threshold. Forecasted supply is $750m and 9.7 ADV.

DSM-Firmenich (DSFIR NA) is the main candidate for addition replacing Kering (KER FP) as it is the highest ranked non-constituent. Forecasted demand is $1.3bn and 22.5 ADV.

Nokia OYJ (NOKIA FH) and Volkswagen (Pref) (VOW3 GR) are only 2% above the exit threshold. Potential replacements are Engie SA (ENGI FP) and Argenx SE (ARGX US).


EURO STOXX 50: Kering Out of Fashion with $750M Deletion. DSM-Firmenich In with $1.3B Addition.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Mandarin Oriental International / Equity Bottom-Up

<ul>
<li>While traditional luxury brands may encounter challenges as affluent Chinese consumers shift to local high-end brands, there are still opportunities within small niches in the luxury sector.</li>
<li>Luxury travel, driven by trends like micro trips and the increasing number of High-Net-Worth Individuals, represents a potential area of growth in the luxury sector.</li>
<li>The thriving luxury travel market opens up investment potential in sectors such as luxury hotels and premium cosmetics.</li>
</ul>


While traditional luxury brands may encounter challenges as affluent Chinese consumers shift to local high-end brands, there are still opportunities within small niches in the luxury sector.
Luxury travel, driven by trends like micro trips and the increasing number of High-Net-Worth Individuals, represents a potential area of growth in the luxury sector.
The thriving luxury travel market opens up investment potential in sectors such as luxury hotels and premium cosmetics.


APAC Luxury Industry Series: Luxury Travel Shines Amid Challenges for Traditional Luxury Goods

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rheinmetall-ag" target="_blank" data-smartkarma-citation="entities:21700:1" rel="noopener">Rheinmetall AG (RHM GR)</a> surged ~65% over the last month and is now passing the sector coverage threshold resulting in its selection list qualification and rank of ~26.</li>
<li>Fast-Entry inclusion to Euro STOXX50 can be triggered at the June 2025 quarterly review if RHM's price increases by ~4% to reach the fast-entry rank of 25. </li>
<li>RHM's inclusion at the September 2025 annual review has a high probability given a failed fast-entry in June. <a href="https://www.smartkarma.com/entities/kering" target="_blank" data-smartkarma-citation="entities:21492:1" rel="noopener">Kering (KER FP)</a> is the main deletion candidate.</li>
</ul>



Rheinmetall AG (RHM GR) surged ~65% over the last month and is now passing the sector coverage threshold resulting in its selection list qualification and rank of ~26.
Fast-Entry inclusion to Euro STOXX50 can be triggered at the June 2025 quarterly review if RHM's price increases by ~4% to reach the fast-entry rank of 25. 
RHM's inclusion at the September 2025 annual review has a high probability given a failed fast-entry in June. Kering (KER FP) is the main deletion candidate.


EURO STOXX50: Fast-Entry In June Or Inclusion In September 2025 For Rheinmetall AG (RHM GR)

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The ES50 Index is one of the most highly-tracked indices in Europe and the annual index review takes place in September every year.</li>
<li>In this insight, we take a look at Quiddity's estimation of the latest ranks of potential ADDs and DELs for the upcoming index rebal event in September 2024.</li>
<li>The rankings will be finalized at the end of this week. Currently, we see one expected ADD/DEL but the expectations can change since there are three more trading days left.</li>
</ul>


The ES50 Index is one of the most highly-tracked indices in Europe and the annual index review takes place in September every year.
In this insight, we take a look at Quiddity's estimation of the latest ranks of potential ADDs and DELs for the upcoming index rebal event in September 2024.
The rankings will be finalized at the end of this week. Currently, we see one expected ADD/DEL but the expectations can change since there are three more trading days left.


Quiddity Leaderboard ES50 Sep 24: DSM Addition Unlikely; Engie Could Replace Kering (US$1bn+ Flows)

France

Kering SA designs, manufactures and markets luxury and sport & lifestyle goods. The Company's brands include Gucci, Bottega Veneta, Alexander McQueen, Puma and Volcom. Kering operates globally and is headquartered in Paris, France.

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Kering (KER FP)

Kering: It’s Gucci - [Business Breakdowns, EP.199]

Kering, a luxury house with brands like YSL and Gucci, has faced challenges in recent years but has potential for growth in beauty products and a...

Business Breakdowns

EURO STOXX 50: Kering Out of Fashion with $750M Deletion. DSM-Firmenich In with $1.3B Addition.

DSM-Firmenich (DSFIR NA) is forecasted to be added to SX5E with a demand of $1.3B as a replacement of Kering (KER FP) with a forecasted supply of...

Dimitris Ioannidis

APAC Luxury Industry Series: Luxury Travel Shines Amid Challenges for Traditional Luxury Goods

Luxury travel, driven by trends like micro trips and the increasing number of High-Net-Worth Individuals, represents a potential area of growth in...

Oshadhi Kumarasiri

EURO STOXX50: Fast-Entry In June Or Inclusion In September 2025 For Rheinmetall AG (RHM GR)

Rheinmetall AG (RHM) is now ranked 26th in Euro STOXX50, after surpassing the Industrial sector coverage threshold and is ~4% away from fast-entry...

Dimitris Ioannidis

Quiddity Leaderboard ES50 Sep 24: DSM Addition Unlikely; Engie Could Replace Kering (US$1bn+ Flows)

The ES50 Sep 24 index review results will be announced later today. We see Kering (KER FP) as an expected DEL and Engie (ENGI FP) as an expected...

Janaghan Jeyakumar, CFA

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