Smartkarma Daily Briefs

• NPS’s May net selling of ₩700B likely stems from retrieving outsourced management funds to allocate to the newly selected three value-up outsider managers.
• These value-up managers will start investing in Q3. NPS’s May net selling matches their allocations. We should design a setup targeting the likely inflow into value-up targets starting early July.
• In particular, we should watch non-financial value-up stocks like Kia Corp and Hyundai Motor, which had more significant May price impacts likely due to NPS outflow.

• Prosus (PRX NA)‘s discount to NAV and implied stub widened after Fabricio Bloisi’s CEO appointment late last week. But the sell-down of Tencent (700 HK) to buy-back Prosus will  continue. 
• Preceding my comments on Naspers (NPN SJ)/Prosus/Tencent are the current setup/unwind tables for Asia-Pacific Holdcos
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• In 1Q24, Trip’s revenue grew strongly by 29% YoY with all business booming.
• China and Trip achieved a lot overseas travelers in March and the Labor Day Holidays.
• However, the stock price has risen 37% in the past three months.

• VBL has a history of commanding high growth through acquisitions, product portfolio and geographical expansions and operating leverage
• Varun is now focusing on interesting geographies and products which will aid its next level of growth
• There could be more than bigger success stories like Sting for Varun Beverages if it can repeat history

• Online shopping platform play Hong Kong Television Network (1137 HK) (better known as HKTV) has announced a buy-back of 11.25% of shares out, at $2.15/share, a 20.8% premium to undisturbed.
• If successful, the Offer elevates co-founder Ricky Wong’s stake, together with concert parties, to 51.55% (before exercising options), up from 45.75% currently. 
• HKTV has been in the news lately for all the wrong reasons: claims of non-payments to suppliers; and delaying its 2026 target after a 79% decline in FY23’s net profit.

• Since shareholder proposals related to “TSE requests” are unlikely to be passed at the AGM, many companies are likely to have capital profitability improvement plans that merely indicate effort targets.
• The outperformance of TOPIX by the company that announced the medium-term management plan can be attributed to the short-term outperformance of the company that announced the share repurchase.
• Investors don’t trust the contents of “mid-term management plan” because they are focusing on more reliable shareholder return rather than betting on improving operating margins over the uncertain three-year horizon.

• Dutch Bros has experienced growth during the COVID-19 pandemic but faces challenges in a more competitive market
• Despite improved financial metrics, the company is expected to see weakness in comparable sales and new store economics
• Investors are optimistic about Dutch Bros’ growth potential but there are concerns about its ability to sustain profitability and achieve long-term growth targets amid market challenges.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Until recently, Onward Holdings looked set for a gradual decline into insignificance like its main channel of regional department stores. 
• But Onward has instead become an exemplar of how to make omnichannel retailing work, with growing sales across both online and a burgeoning new store network.
• Like some other old apparel firms, Onward is showing that there is significant upside top and bottom line growth in premium apparel markets.

• We are reiterating our Buy rating, $41 price target and projections for Build-A-Bear Workshop after visiting stores in Long Island and Connecticut.
• We believe, with exciting new “furry friends” for Summer, a strong start to the graduation season, new Mini Beans to drive incremental purchases and the start of potential summer movies, Build-A-Bear remains ideally positioned to leverage its experiential shopping model and continue to gain further market share.
• As such, and with BBW continuing to trade at 8.1X FY25 EPS and a 2.7% dividend yield, we believe the risk/reward remains compelling, and we reiterate our Buy rating and $41 price target.

• Kenvue appears to have had a strong start to 2024 despite facing some challenges.
• Positively, the company’s Q1 results came in ahead of expectations reflecting a robust portfolio and quality of its workforce.
• Leveraging value realization, investing in brands and notably, expanding gross margin by 290 basis points in Q1 to support brand activation were key achievements.