Consumer

• Today just before the close, Reuters came out with an article saying Japan’s four major insurers and some financial institutions would offer ¥500bn of shares in a secondary offering.
• That implies about 275-280mm shares (insurers hold ~195mm). In May, Honda announced a ¥300bn buyback with earnings, with nothing done so far. 
• The supply/demand dynamics here are key. There are a lot of moving parts over time. Honda is cheaper than it looks but there are moving parts there too.

• We see 37 potential adds (including plenty of new listings) and 25 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in September.
• We expect 32 stocks to be added to Southbound Stock Connect following the rebalance while 24 stocks could be deleted from the trading link and become Sell-only.
• There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

• Domestic Uniqlo SSS (including e-commerce) were +14.9% in June. Positive
• Impressive +8.1% increase in customer traffic and +6.3% gain in per-customer spend
• I have a bearish view on Fast Retailing due to rich valuations (25x EV/EBIT). However, the share price may perform well in the run up to the Q3 report.

• Tripadvisor’s fourth quarter and full year 2023 financial results exceeded expectations with the company reporting revenue growth of 10% year-on-year amounting to $390 million in Q4.
• In the same period, the adjusted EBITDA was $84 million attributed to exceptional brand performance and marketing efficiencies.
• For the full year, the company reported a consolidated revenue growth of 20%, recording an all-time high of $1.8 billion, with adjusted EBITDA experiencing a 13% growth to $334 million.

• The problem with cross-shareholdings is not simply that they weigh heavily on ROE and ROA improvement, but also that they do not create tension in management.
• The degree of seriousness of the company’s efforts to reduce policy shareholdings is a measure of the improvement in return on capital. The level of seriousness must be monitored.
• The fact that there are inappropriate entries in the items required of prime market listed companies indicates that many companies are not suitable for prime market listed companies.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Casino Guichard-Perrachon’s ESG as “Adequate”, in line with its Environmental score, while the Social pillar is “Strong”. We assess Governance as “Weak” due to a lack of data following the company’s recent debt restructuring, which led to a change of control. Controversies are “Material”, while Disclosure is “Strong”. 

• We are reiterating our Buy rating, $37 price target and projections for Guess?
• after visiting stores in London.
• We believe the company has continued to raise their fashion game worldwide, increasing overall elevation levels and remaining focused on creating a global fashion powerhouse.

• Investment analysis and result summary for Freshpet’s first quarter of 2024 show a mixed yet optimistic outlook for the company’s financial and operational progress.
• The company reported a robust 34% increase in net sales amounting to $223.8 million, mainly driven by substantial volume growth of 31%.
• This positive development suggests a successful adaptation to significant pricing changes, highlighting effective management and resilient operational frameworks.

• Lancaster Colony Corporation recently reported its fiscal year 2024 third quarter results, highlighting a mixed performance with significant strategic adjustments.
• The company achieved record net sales and gross profit, with consolidated net sales increasing by 1.4% to $471.4 million and gross profit growing by 10.9% to $104.5 million.
• Notably, operating income saw a substantial rise of 19.5% to $35.1 million, reflecting robust underlying business performance despite some challenges.

• RaaS Research Group has published an update on cloud-based digital twin solution provider Pointerra (ASX:3DP) following the announcement it has been awarded a US$1.63m contract for a US Department of Energy programme to model a range of electric grid resilience investment scenarios by electric utilities.
• We see the contract as validation of Pointerra’s digital twin solution for managing large-scale physical inventory with the potential to provide the company with invaluable exposure to new and existing US clients in the US electric utility sector.
• We have not made any changes to our forecasts as a result of this announcement, although note that we have already factored in substantial revenue growth in FY25f.

• The L’Occitane (973 HK) IFA opines that Reinold Geiger’s conditional voluntary cash (HK$34.00) or scrip offer (10 rollover shares for each share, subject to a cap) is fair and reasonable.
• Irrevocable/Letters of support have nudged lower from 49.83% (17 June) to 47.66% of disinterested shares due to Southeastern Asset Management selling its shares. 
• Nevertheless, the scrip option, an attractive offer and no vocal opposition should facilitate achieving the minimum acceptance condition. At the last close, the gross spread was 2.4%.

• Nine months have passed since Aisin announced a transformative MTP. Investors remain sceptical that it will deliver higher returns. 
• Improving margins on hybrid transmissions, new products for BEVs and better capital allocation could deliver 70% upside for investors.
• The key risk is the assumption that operating margins can rise above 8% versus the historical average of 5%. 

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
• A periodic review is conducted by the Index provider in August every year. The reference period for the August 2024 index rebal event is now complete.
• In this insight, we take a look at our final expectations for ADDs and DELs.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
• Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
• These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).

• Niche Player in Cotton yarn spinning and Technical Textile with decadal experience.
• Expansion in Technical Textile during FY24 will significantly improve the margin profile and revenue for the company.
• Peer Comparison and assessment at multiple metrics to assess the suitability of investment.

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 3Q 2024.
• The recent push for Korea Value Up program has helped to push up prices of numerous Korean preferred stocks including Hyundai Motor (005385 KS). 
• On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• Despite weak data, HK stock earnings and dividend payouts in the results have been resilient, resulting in solid dividend yields of over 10%.

• Exactly two weeks after the scrip alternative was announced, L’Occitane (973 HK)‘s Composite Document has been issued. The Offer is now open for acceptances.
• The IFA (Somerley) considers terms to be fair & reasonable. A lifetime high coupled with a scrip option – yes, this is fair. 
• Keep an eye on CCASS moves prior to the first closing date, the 23rd July. I have a call with the FA tomorrow. Hit me up with any questions.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Health And Happiness (H&H)

Edison Investment Research is terminating coverage on Oxford Cannabinoid Technologies (OCTP), Britvic (BVIC), Ultimovacs (ULTI), DFR Gold (DFR), The Merchants Trust (MRCH), PB Holding (PBH) and Biodexa Pharmaceuticals (BDRX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

• For the month of June 2024, 8 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn.
• The average premium for the new transactions announced (or first discussed) in June was ~52%. The average premium YTD is ~47%. 
• This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

• Selamat Sempurna is one of the most interesting industrial companies in Indonesia, with a leading market share in filters for auto and heavy equipment markets in Indonesia and overseas.
• 1Q2024 was impacted by a seasonal slowdow ahead of Lebaran and a decline in sales to Russia, offset by strong US sales. Management remains confident in the outlook for FY2024.
• Selamat Sempurna will continue to benefit from growth in the filter replacement market for both auto and heavy equipment markets and already has exposure to EVs. Valuations are attractive. 

• While it’s commendable that more companies are publishing their skills matrices, it’s not enough to verify that the skill items are useful in expanding the value of the company.
• Since management strategies vary from company to company, the skills required to formulate and execute a company’s strategy are not likely to be the same as those of other companies.
• Director candidates should be selected based on the skills needed to expand the value of the company in future and skills that complement the skills lacking in the current directors.

• Perfect Medical Health (1830 HK) reported flat revenue/profit growth for FY24 due to a weak Q4 that plagued the entire HK consumer space. H2FY24  revenue/profit growth was -6.3%/-12.5%
• The company paid a generous dividend of 31.5 cents for FY24 (vs. 30.0 cents), resulting in a 12.5% dividend yield.
• We will follow up with more details after the earnings call and presentation. 

Key points

• Delfi, the leading chocolate company in Indonesia, is experiencing challenges due to rising cocoa prices
• Despite a decrease in share price, analysts remain optimistic about Delfi’s future prospects
• The company’s management team is implementing strategic measures to protect profit margins and improve financial performance, with initiatives planned for 2024 expected to mitigate the impact of cocoa price increases

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.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, we looked at the upcoming mega-listing for Hyundai Motor India.
• On the placement front, the week was dominated by the cross-shareholding unwinds in Aisin (7259 JP) and Mitsui & Co Ltd (8031 JP). 

• Pilgrim’s Pride Corporation reported positive financial results for the first quarter of 2024, demonstrating significant growth and operational efficiency despite challenging market conditions.
• The company recorded net revenues of $4.4 billion, marking a 4.7% increase from the previous year.
• Moreover, the adjusted EBITDA reached $372 million, which is a 145% rise compared to Q1 2023, and the adjusted EBITDA margin expanded from 3.6% to 8.5%.

• Post Holdings delivered robust performance in the second quarter of 2024, anchored by strong execution across core segments such as Consumer Brands and Foodservices, despite notable challenges including volume declines in several categories.
• The company’s proactive management, highlighted by strategic price adjustments and rigorous cost control, have enabled Post to navigate a complex economic landscape defined by shifting consumer behaviors.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Luxury sector experiencing challenges after period of record-high growth
• Key players like LVMH, Hermes, and Richemont facing corrections in share prices
• Burberry facing short thesis due to concerns about navigating changing market dynamics

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.

• Life Time Group Holdings, Inc. showcased a strong financial performance in the first quarter of 2024, although there were some mixed aspects within the results.
• The company reported a notable increase in total revenue, which rose by 16.8% to $596.7 million from the year earlier.
• This rise was predominantly fueled by a 19% growth in membership dues and enrollment fees and a 10.5% uptick in in-center revenue.

• PT Metrodata Electronics (MTDL IJ) saw a strong rebound in 1Q2024 for its distribution business, especially for telco products, which partially offset the slower growth in solutions & consulting. 
• Solutions&consulting saw slow growth due to some delays over projects due to political uncertainty ahead of the election but it did have the support of recurrent income from software.
• PT Metrodata Electronics should see a recovery in solutions & consulting in 2H2024, with increasing demand from AI-related projects, which will further drive future growth. Valuations remain attractive.

• Tencent Music Entertainment Group, a leading player in China’s music streaming industry, started the year 2024 with some substantial financial and operational achievements, reflecting its continued emphasis on a dual-engine strategy of content richness and platform optimization.
• However, not all indicators were uniformly positive, revealing certain challenges and strategic pivots.
• On the upside, Tencent Music reported a marked increase in its subscriber base, adding a record 6.8 million net subscribers during the quarter, which pushes the total count to 113.5 million music-paying users.

• Polestar presented a mixed but broadly positive financial picture in the third quarter of 2023.
• The company, known for its focus on electric vehicles, reported record third-quarter deliveries of 13,976 units, marking a significant 51% increase from the previous year.
• This robust performance can be attributed to a positive product and channel mix and the initial rollout of the Polestar 2’s model year ’24, illustrating a strong consumer demand for Polestar’s offerings.

• Papa John’s International, Inc. recently reported a mixed first quarter of 2024, demonstrating resilience in some areas of its operations while facing pressures in others.
• The company has introduced a series of initiatives under its “Back to Better 2.0” strategy aimed at revitalizing the brand and enhancing profitability, yet it is still navigating through several challenges.
• On the positive side, Papa John’s has launched several strategic measures to improve its marketing effectiveness and brand visibility.

• CAVA’s first quarter of 2024 financial results depict a mixed yet optimistic scenario for the Mediterranean cuisine leader.
• The company reported solid revenue growth of 30.3% year-over-year reaching $256.3 million and a notable addition of 14 new restaurants, indicating aggressive expansion strategies into both existing and new markets.
• The same-restaurant sales experienced a moderate increase of 2.3% or 30.7% on a 2-year basis which, while positive, might suggest a deceleration in same-restaurant sales growth momentum when compared to historical data.

• Visteon Corporation demonstrated robust performance in the first quarter of 2024, navigating a challenging and varied market environment with strategic finesse.
• The company reported a solid kickoff to the year with $933 million in sales, attributed to heightened demand for its Digital Clusters and cockpit domain controllers, which both saw a 20% year-over-year increase.
• The noteworthy expansion in Battery Management Systems (BMS) sales, which more than doubled compared to the prior year, was another highlight, significantly contributing to a positive growth-over-market rate at 2%.

• Ollie’s Bargain Outlet recently discussed its financial results for the first quarter of fiscal year 2024, presenting a detailed analysis of its operational performance and outlook.
• During the presentation, the company highlighted several positives including a notable 49% increase in adjusted earnings per share, underpinned by better-than expected performances in comparable store sales, total revenue, gross margin, and expenses.
• This robust performance underscores the company’s effective execution despite the ongoing economic pressures influencing consumer spending.

• Group 1 Automotive recently held a comprehensive review of its first quarter 2024 financial results, reflecting significant developments and strategic advancements.
• Notable was the acquisition of Inchcape Retail, a move positioned as the largest dealership transaction in the company’s history, signaling Group 1 Automotive’s strategic growth through mergers and acquisitions (M&A).
• This acquisition was highlighted as immediately accretive, enhancing the company’s footprint in both new and existing markets without necessitating substantial facility investment, further emphasizing prudent capital allocation.

• RH reported results for the first quarter of fiscal 2023 that showed both positive elements and areas for concern, which hold implications for investors considering a position in the company.
• Starting with the positives, RH noted an uptick in demand trends within the quarter.
• The company has engaged in a significant product overhaul and platform expansion, which has begun showing promising results despite a heavily challenged housing market.

• Carter’s Inc. unveiled its financial results for the first quarter of fiscal 2024, showcasing a blend of positive trends and ongoing challenges across its various operational segments.
• The analysis of these results provides insight into the company’s financial health and strategic maneuvers, emphasizing both commendable achievements and hurdles encountered.
• Carter’s surpassed its sales and earnings targets for the quarter, a testament to its adeptness in navigating market complexities.

• Mattel Inc.’s first quarter 2024 financial results reflected a mixed performance, demonstrating resilience in some areas while facing challenges in others.
• The company reported a slight decline in net sales, down 1% both as reported and in constant currency, totaling $810 million for the quarter.
• Despite the dip in sales, Mattel showed considerable strength in profitability metrics.

• Madison Square Garden Sports Corp. has recently shared its fiscal 2024 second quarter results, offering a mix of solid strengths and areas for cautious observation.
• The company reported revenues of approximately $327 million and an adjusted operating income of $37 million for the quarter.
• This reflects a dynamic scenario where, despite 9 fewer Knicks and Rangers home games comparative to the prior year, per game revenues across the majority of categories including tickets, suites, food, beverage, and merchandise increased, indicating robust per unit profitability and consumer spending resilienc Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• GameStop has exhibited a transformative rebound in the challenging retail sector environment over the recent years.
• The efforts to reshape its operational and financial structures have manifested into some noticeable improvements in its financial health and operational strategy, as detailed in recent company reviews.
• GameStop management has successfully navigated through burdensome debt, strained vendor relationships, and a dwindling cash position that marked the beginning of 2021.

• Casey’s General Stores recently reported results for the fiscal fourth quarter and full year of 2024, showcasing robust performance with a range of strategic expansions and operational enhancements that underscore the company’s resilience and proactivity in a volatile retail environment.
• Positive outcomes were plentiful in the report.
• Casey’s notably achieved a record diluted earnings per share at $13.43, a 13% increase year-over-year, with net income also hitting a new high at $502 million.

• Dutch Bros Inc. showcased robust financial performance and operational growth in its first quarter of fiscal 2024 results.
• The company reported a significant 39% year-over-year increase in revenue, totaling $275 million.
• This growth was driven by an impressive 10% same-shop sales growth, representing the strongest single-quarter performance since the fourth quarter of 2021.

• Gildan Activewear showcased a mixed performance in the first quarter of 2024, reflecting a combination of strengths in certain product categories and challenges in others, alongside strategic refinements under new leadership.
• The company reported a slight decline in total revenue, with sales of $696 million, down 1% year-on-year, in line with forecast expectations.
• This top-line result was primarily due to an offset between a 1% growth in Activewear and a 10% decrease in the hosiery and underwear segment.

• Light & Wonder, during its 2024 first-quarter performance presentation, revealed strong financial and operational progress, underlining its vigorous posture within the gaming industry.
• The company reported substantial revenue growth and provided a detailed update on its performance across various segments including gaming, SciPlay, and iGaming.
• Recognizing the positives from the report, Light & Wonder marked its twelfth consecutive quarter of year-over-year revenue growth and highlighted robust performance across all business lines.

• Lucid Group’s Q1 2024 financial update presents a company in the thick of navigating the complexities of expanding the electric vehicle (EV) market footprint while managing production efficiency and scaling operations.
• On the bright side, Lucid Group reported better-than-expected production and delivery figures during the quarter, with a 39.9% year-over-year increase in deliveries, totaling 1,967 Lucid Air models.
• This performance marks Lucid’s best quarter to date for deliveries, reflecting a robust demand trajectory for its premium EV offerings.

• Planet Fitness has provided a detailed update on its performance and strategic plans during the first quarter of 2024.
• The company reported a growth in its membership base, ending the quarter with approximately 19.6 million members.
• This represents an increase from the prior period but fell short of the company’s expectations for what is typically a robust quarter for new memberships.

• Polaris Inc. recently discussed its financial performance for the first quarter of 2024, presenting a mixed outcome influenced by various factors including seasonal trends and strategic inventory management.
• Here, we lay out an investment thesis and concise result summary that centers around the firm’s operational strategies, product launches, and market conditions.
• Beginning with revenue, Polaris reported a 20% decline to $1.7 billion, a figure that aligned with expectations.

• Today (27 June 2024) after the close, Aisin (7259 JP) announced three Toyota Group companies (Toyota, Toyota Industries, and Denso) would sell shares in Aisin in a ¥180bn offering.
• This is ALL of Denso’s holdings, 63% of Toyota Industries stake, and ~12% of Toyota’s stake. Separately, Aisin announced a 17mm share (6.3%) ¥100bn buyback and a 3:1 split Oct1.
• The recent yuho shows us the progress of Aisin’s promised selldown of crossholdings. There are three large chunks left. One is easy. The climb to capital allocation credibility easier too.

• Denso Corp (6902 JP), Toyota Motor (7203 JP) and Toyota Industries (6201 JP) are looking to raise US$1.1bn from selling some of their stakes in Aisin (7259 JP).
• While the deal appears well-flagged, given that it is part of the cross-shareholding unwind theme in Japan, the timing of such a selldown isn’t always certain.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Aisin (7259 JP) has announced a secondary offering of up to 38.9 million shares (including overallotment) and a buyback worth a maximum of JPY100 billion or 17 million shares.
• Denso Corp (6902 JP), Toyota Industries (6201 JP), and Toyota Motor (7203 JP) are the selling shareholders. The offering aims to reconfigure the company’s shareholder mix and reduce cross-shareholdings.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 8 and 10 July (likely 8 July).

• Brilliance China Automotive (1114 HK) is up 220% on a total return basis since we first published our insight in August 2023.
• The company paid a special dividend in April this year and will pay a large special dividend of HK$4.3/share going ex-div on 3 July.
• The resultant drop in market cap will result in deletion of the stock from large global passive portfolios at the close on 3 July.

• LG Electronics’ Indian subsidiary, fully owned, saw 2023 sales grow 17% to ₩3.3T and net profit rise 14% to ₩231.3B, driven by strong appliance demand.
• LG Electronics aims for a ₩5T-₩6T valuation, planning to sell 15-20% of their Indian subsidiary to raise at least $500M.
• LG Electronics plans to invest the $500M raised into their EV components business, moving quickly with the IPO due to urgent funding needs in the downturn-hit sector.

• According to local media, LG Electronics is reviewing for a potential IPO of LG Electronics India. LG Electronics has approached JP Morgan and Morgan Stanley to be potential IPO underwriters.
• If LG Electronics’ Indian subsidiary is listed, it is expected to be able to raise at least $500 million from the stock market.
• Post IPO, the market value of LG Electronics India is estimated to be between $2.1 billion (3 trillion won) and $4.3 billion (6 trillion won).

• Webtoon Entertainment (WBTN US) raised around US$315m in its US IPO, after pricing the deal at the top of the range at US$21/share.
• Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
• In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics.

• On 26 June, Kolmar Holdings announced it plans to cancel 2.5 million treasury shares (6.7% of outstanding shares) as part of its participation in the corporate value-up program.
• Previously, Kolmar Holdings announced that it would return more than 50% of its net profit to shareholders in accordance with the shareholder return policy announced in July 2023. 
• According to our NAV analysis, it suggests an implied NAV of 555 billion won or NAV per share of 15,088 won, which represents a 39% upside from current price.

• Oriental Watch (398 HK) reported revenue/profits down 2%/15% YoY for the full year (vs our expectation of 10%). H2 revenue/profitability fell 12%/22% YoY due to a weak Q4. 
• Cash and investments fell from 1.1 bn to 920 mn HKD, owing to dividend payments, increased inventories, and reduced payables.  Cash represents 55% of market capitalization. 
• The company maintains a 100% dividend payout, but dividends declined in line with earnings to 51.5 cents (FY23: 60 cents), representing a 15% dividend yield. 

• Sariguna Primatirta (CLEO IJ) is Indonesia’s fastest growing bottled water players with an edge over competition is that it sells “pure” water, which is filtered using nanotechnology from the US. 
• The company sell both gallon and bottled water in sustainable innovative packaging and has a well-developed distribution coverage. It continues to build new factories to drive future growth across Indonesia. 
• Sariguna Primatirta (CLEO IJ) is a rising star in the consumer staples space in Indonesia, with a strong track record in executing its expansion. Valuations are attractive versus growth.

• Shankara Building Products L (SHANKARA IN) is seeing a healthy topline growth in the last three years but this is accompanied with margin contractions.  
• As far as the forensics are concerned, the company does not have grave auditor red flags like earlier but there are still some eye-catching checks.
• Caution must be given to the finance costs of the company which look on a higher side vis-a-vis the borrowings. Moreover, inadequate provisioning might also expose out some receivables.

• Coupang has commenced 2024 with a notable performance that underscores both strengths and areas in need of meticulous attention.
• During the first quarter, Coupang reported a robust 28% year-over-year growth in revenues in constant currency terms, attributed primarily to increased spending across customer cohorts, including its longest-standing customers.
• This points to successful customer retention and the appealing nature of its offerings.

• Coursera reported mixed financial results for the first quarter of 2024, reflecting progress on strategic initiatives but facing challenges in revenue growth, particularly within their consumer segment.
• The company reported a 15% year-over-year increase in revenue, which, despite aligning with progression in its product offerings and user base growth, fell short of internal expectations primarily due to softness in North American paid learners.
• On the positive side, Coursera continues to strengthen its platform with enhanced educational content and broader partnerships, evidenced by the addition of new professional certificates and degrees, and significant emphasis on integrating generative AI technologies into its offerings.

• Naspers and Prosus released results for FY24 yesterday morning. The initial market reaction was positive, both discounts closed narrower for the day.
• Since the appointment of Fabricio Bloisi was announced in May, both discounts have widened.
• JSE indices were rebalanced in the closing auction on Friday. Turnover for the day on the JSE was R58bn, R38bn traded in the closing auction (66%).

• Two years of suspension, an “okay” Offer (following the bump), family members selling prior to and after the Offer – Best World International (BEST SP) is anything but dull. 
• The Circular is now out for the $2.56/share Exit Offer from Best World’s founders Dora Hoan and Doreen Tan. The Offer Price will not be increased. 
• Independent shareholders go to the vote on the 19th July. The IFA says fair & reasonable. Payment is possible late-July. But the vote is by no means a sure thing.

• The FMCG business has been now sustaining an annualized revenue run-rate of INR 500cr+. Q4FY24 FMCG revenue was INR 135cr+, similar to Q3FY24 and a growth of 30%+ YoY.
• Firstsource Solutions (“Firstsource”) , the BPO business, has been sustaining its recovery after a lull period for two years. Its revenue grew 4.2% QoQ and 4.5% YoY in constant currency.
• The Sports business revenue continue to be dominated by IPL. Having played three seasons now, RPSGV’s IPL franchise, Lucknow Super Giants (LSG), has made its place and holds significant value.

• ZJLD Group (6979 HK) held its annual general meeting last Friday (June 21). 
• The share price is down 21% in the last 30 days, mainly due to a major sector pullback.
• I continue to expect 20% net profit growth for the company in 2024E.  The company is trading at 13x 2024E PE which I believe is attractive. 

• Unilever has presented its full-year results, reflecting a mix of positive advancements and areas requiring improvement.
• Among the highlights, Unilever reported an underlying sales growth of 7%, driven by a significant contribution from price increases at 6.8% and a marginal recovery in volume at 0.2%.
• Notably, the 30 Power Brands demonstrated robust performance, accruing an 8.6% growth in underlying sales and contributing notably to the company’s volume growth.

• For companies facing challenges in maximizing sustainable shareholder returns, it is not a bad idea to rethink management strategies for corporate value growth in the quiet environment of going private.
• MBOs began to attract attention as managers became more aware of the listing costs. TSE’s request last March was the product of making companies even more aware of the costs.
• It is not easy for a company that has not been recognized in the marketplace for many years to increase its stock valuation in a short period of time.

• J.M. Smucker Company, in its Fiscal 2024 Fourth Quarter, presented a mixed picture of its operational and financial stances, balancing strategic growth initiatives against persistent challenges.
• The management outlined a cautious yet structured approach towards scaling its operations, emphasizing investment in key growth areas while navigating through ongoing market volatilities, particularly in the coffee segment.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• LKQ Corporation reported its first quarter of 2024 earnings, revealing a mixed bag of results under a challenging economic atmosphere.
• While the top-line revenue grew considerably, other key performance indicators softened compared to previous quarters, reflecting the impact of several external and operational headwinds.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Philip Morris International has presented its 2024 first-quarter results, revealing significant strides in revenue and operating income facilitated by robust volume growth and effective operational execution.
• The company has demonstrated a marked improvement in its performance across various sectors, including both its traditional combustible products and newer, smoke-free alternatives.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Domino’s Pizza, Inc. recently presented its first quarter 2024 results, underpinned by a robust performance reportedly driven by strong U.S. sales, reflecting bullish growth in the carryout and lower-income cohort segments.
• The company experienced a notable 5.6% increase in U.S. same-store sales, driven predominantly by transaction growth, which the management attributes to the enhancements in its loyalty program and promotional strategies.
• Despite a strong domestic performance, international sales showed relatively softer growth at a rate of 0.9%.

• Trading comfortably through the Partial Offer terms, Sun Corp (6736 JP) may still do nothing with its Cellebrite DI (CLBT US) holding towards narrowing the NAV discount.
• Preceding my comments on Sun Corp 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%.

• I kind of hate this, but I also can’t ignore it. Apparently, an expensive media service Reporting on Deals or about the Market for Mergers, had an article today.
• Bloomberg carried a small blurb saying there was “speculation on a tender offer…. according to traders”. The stock is untraded, limit up.  
• The most informative comment comes from Japanese stock market portal ‘kabutan‘ which suggests “overseas media” thinks Sumitomo Corp will sell its shares. I look at the possibilities below.

• The Best World International (BEST SP) IFA considers the S$2.56 exit offer fair and reasonable as it is towards the upper end of its S$1.36-2.69 per share valuation range. 
• The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
• The lack of activists, IFA supporting recommendations, and no competing offer suggest a done deal. At the last close, the gross spread was 2.8%.

• Asics has demonstrated impressive growth in gross profit margins, as evidenced by 4.3ppt YoY improvement in Q1 to 54.5%
• Asics has been successful in growing market share and enhancing its brand strength
• For FY2024, we now forecast a 10% YoY increase in sales to ¥628 billion and a 46% rise in OP to ¥79 billion (prev: ¥ 71b)

• The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• We see seven change for the ChiNext index and five changes for the ChiNext 50 index.

• Hyundai Motor (005387 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
• HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
• In this note, we talk about the positive aspects of the deal.

• Nu Ride is a SPAC with $2.5 per share in cash and $1 billion in net operating losses
• Company has $2.9 per share of net cash and $2.0 per share of perpetual preferred held by Foxconn
• Ongoing litigation actions against Foxconn and former executives could result in potential increase in net cash value to $4.5 per share

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• On June 24, Carlsberg announced that Pepsico had agreed to waive a change of control clause in its bottling deals with Britvic. The current proposal is 1250p (+9.5p interim).
• The offer represents an undemanding 12x EV/fwd NTM EBITDA. My standalone base case fair-value estimate is 1,056p/share. An improved offer could come >1,300p, although 1,420p (13.3x wouldn’t  be unreasonable).
• Gross spread to the revised offer is 6.2% (6.9% including interim). Shares are pricing a 72% probability of deal success. I believe Carlsberg will come with an improved offer. Long.

• We are reiterating our Buy rating.
• $10 price target and projections for Vera Bradley after visiting stores in Long Island and Connecticut.
• With the soft launch of “New Day” set for July 11th (and formal premier on July 15th, June is, with one major exception, a month for the stores to clear goods and prepare for the new offerings; replenishment has been placed on hold and the end-of-season sales have been moved up to drive lower inventories and reduce the stresses from rolling out new looks at the main line stores and shifting older goods to the outlets.

• Kuaishou and Bilibili’s GMV surged YoY during “June 18” sales.
• World of Warcraft: Wrath of the Lich King, will formally start on June 27.
• GAC Honda Automobile Ltd planned to dismiss 1700 employees, about 14% of total.

• Many Japanese managers have little idea that what belongs to shareholders is net profit and not free cash flow. This has created two problems.
• If Japanese companies, mostly manufacturers, use dividend payout ratios as a criterion for shareholder returns, cash on hand will not decline even if shareholder returns are increased to some extent.
• The inability to move beyond the concept of allocating investment and shareholder returns based on increases or decreases in cash may be the reason for the unclear cash allocation policy.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, Guzman provided some hope to the Australian market, while Webtoon Entertainment (WBTN US) and Allied Blenders & Distillers will soon test their respective markets.
• There was no dearth of placement this week, with large deals in Hong Kong, New Zealand and India.