Consumer

• 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

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.

• 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.

• Murakami Group now owns 10.13% of Exedy Corp (7278 JP). Interestingly, NOMURA Aya sold 6.79% off-market to Minami Aoyama Fudosan. Has the Murakami Group made a “mistake” in its planning?
• A big win for EOFlow (294090 KS) as the U.S. Federal Appeals Court issued its decision on overturning Insulet Corp (PODD US)‘s provisional injunction
• L’Occitane (973 HK) finally announces the share alternative.  And  Pleasant Lake (3.25% of shares out) will accept the share offer (either cash or scrip). This is a done deal

• Webtoon Entertainment, a South Korean global storytelling platform and the world’s largest digital comics platform, filed for an IPO in the United States.
• The company offers 15M shares at a price range between $18.00 and $21.00, implying a market cap of roughly $2.5B at the midpoint based on 129.3M outstanding shares.
• I have a positive view of the upcoming Webtoon Entertainment IPO and I think risk/reward is more favorable for IPO investors given the company’s improving profitability and strong cash position.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: MMG (1208 HK) US$1.2 billion rights issue. Shift Up (462870 KS) and Webtoon Entertainment (WBTN US) IPOs.
• Event-Driven developments: L’Occitane (973 HK), Exedy Corp (7278 JP), Infocom Corp (4348 JP), Mimasu Semiconductor Industry (8155 JP), Tatsuta Electric Wire & Cable (5809 JP), Mma Offshore (MRM AU). 

• Growth of outbound Chinese travel demand strong in May as HK, Macau slow
• Domestic travel demand also showed solid growth in May and early June
• Trip.com appears reasonably cheap now that it’s dipped below US$50, BUY

• Allied Blenders & Distillers (9844250Z IN) is looking to raise about US$180m in its upcoming India IPO.
• ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY22.
• In our previous notes, we talked about various aspects of the company. In this note, we talk about its RHP updates and our thoughts on valuation.

Games Workshop Group’s FY24 trading update provided a nice surprise on the revenue side, broadly equally split between core and licensing, and an even nicer surprise for PBT, suggesting an improvement in gross margin. We have upgraded our FY24 estimates to be consistent with the indicated figures and marginally increase our estimates for FY25, which reverts to a 52-week period accounting period.

• Companies with higher foreign shareholdings have superior board practices, suggesting that overseas investor engagement played an important role in improving management that resulted in return on capital.
• Clues to changes in management reform can be found in the percentage of independent board members, the percentage of female board members, and policy shareholdings/total assets.
• While the substance of the goals is important, the focus has shifted to management’s strong will to achieve the goals to raise valuations and return on capital.

• Volkswagen’s US ADRs (VWAPY) have underperformed in the past 5 years, despite a 3% increase with dividends
• Company’s growth guidance and margins are weaker compared to peers, leading to undervaluation of stock
• Trading at low multiples of forward earnings and free cash flow, recent free cash flow guidance for 2024 was unimpressive; preferred shares receive extra dividends but no voting rights

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.

Key points

• United Parks & Resorts (PRKS) is proposing a $500 million share repurchase authorization to decrease share count and float significantly at current prices.
• The buyback, if approved, could be completed by the end of 2024 and potentially drive double-digit EBITDA growth, leading to an 80% increase in stock price to $100.
• With a leverage of 2.5x EBITDA, the company may also be a candidate for sale or privatization, with Hill Path ownership increasing to 49% and potential for significant premium buyouts.

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.

• Manchester United is a well-known football club with a large fan base and diverse revenue sources
• The club is controlled by the Glazer family through Class B shares but Sir Jim Ratcliffe acquired a 25% stake in MANU
• Ratcliffe’s investment could signal a shift in control to SJR, making the stock appealing to investors

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• Taste Gourmet (8371 HK) reported revenues up 37% YoY and profits up 29% YoY (lower than our expectation of 39% profit growth) due to a slightly weaker-than-expected Q4.
• Dividends for H2 were 7.4 cents/share (overall FY24:12.9 cents), implying an 8.1% dividend yield. Net cash on the balance sheet was 143 mn HKD (23% of market cap).
• Trading at 6.7x PE FY24 (March end) and with an excellent execution track record, we believe that the company will be able to post more robust numbers in FY25. 

• The Sep 2024 Nikkei 225 Review base date is six weeks away. One can no extrapolate results quite accurately. It still gives us one ADD, one DELETE, and capping fun.
• Recently, Yanai-san sold more Fast Retailing (9983 JP). More active holders own more stock (which may mean less interest to buy later), and only 1% to go to avoid capping.
• There should be one DELETE, one ADD. There is a low-probability Dark Horse ADD but I expect Kokusai Electric (6525) to be added in March 2025. 

• After watch accessory play Hengdeli Holdings (3389 HK) was suspended on the 17th June pursuant to the Takeovers Code, I didn’t hold out high hopes of a knock-out Offer.
• And on cue, CEO Tony Cheung (16%), son of founder Zhang Yuping (holding 17%), has made a Partial Offer (for 15% of shares outstanding) at HK$0.16/share, towards gaining majority control.
• That’s a 18.5% premium to last close … and a 80% discount to NAV, and a 47% discount to Hengdeli’s net cash as at 31 December 2023.

• Despite missing market consensus, Sa Sa International Hldgs (178 HK)‘s FY24 result still have silver linings. Its resumption of dividends with a 70% payout ratio is welcoming.
• Tax credit in 2H23 has distorted comparison. At pre-tax level, 2H24 profit has gone up by 29.5%. Cost management is solid, generating a 0.9pp FY24 operating margin expansion. 
• While overall 1Q25 sales have dropped, mainland China sales surged 83.9%. The macro environment should have bottomed and government efforts to attract tourists will pay off.  

• India’s passenger vehicle industry is shifting towards alternative fuels and facing intense competition, amidst changing customer preferences.
• Despite a growing vehicle market, Hyundai Motor India (HMIL) faces a tough battle to defend its market share given changing industry dynamics.
• With more competitors in the fray, including its parent group company Kia and EV leader BYD, Hyundai Motor India is in for a challenging ride.

• The first quarter earnings of J&J Snack Foods Corporation (J&J) highlights several aspects of the company’s financial health and operational performance.
• The company’s Q1 2024 results were influenced by a challenging consumer environment, with many customers witnessing yearly declines in consumer traffic and consumption.
• To counteract these trends, J&J leveraged its popular brands to optimize sales opportunities, resulting in less than a 1% sales decline.

• This is our first report on Adient, a global leader in automotive seating.
• The company has continued to focus on business performance, launch execution, and continuous improvement in FY 2024.
• Some highlights in the first fiscal quarter of 2024 include a total revenue of $3.7 billion, a slight decrease compared to the previous year’s first quarter, and an adjusted EBITDA totalling $216 million, reflecting an increase of 2%.

• This is our first report on apparel major, Kontoor Brands Inc. The company released its financial results for the fourth quarter and fiscal year 2023 in its recent earnings conference call.
• The company’s Vice President, President, Chief Executive Officer, Co-Chief Operating Officer, and Chief Financial Officer were on the call to provide insights on Kontoor’s business accomplishments and forecasts.
• One crucial undertaking announced in the conference call was Project Jeanius.

• We are reiterating our Buy rating and $3 price target for Vince Holding Corp. after the company reported slightly better-than expected 1QFY24 (April) results and reiterated FY24 guidance.
• We believe, as the Vince operating model continues to normalize in FY24, it will become increasingly clear to investors the material positives at Vince, from a focus on full price selling, strong wholesale order book, continuing emphasis on higher overall returns and a strengthening balance sheet, which we believe will drive a higher valuation for VNCE, especially with momentum ramping even higher from a “normalized” 2HFY24.
• As such, we reiterate our Buy rating and $3 price target for VNCE.

• We are reiterating our Buy rating, $25 price target and projections of a.k.a. Brands after touring the company’s Culture Kings store in Las Vegas and Princess Polly unit in Los Angeles.
• We believe both locations represent impressive retail units which will allow for continued growth (and high returns) going forward, as a.k.a. expands their retail footprint, with three new Princess Polly stores on track for a 2H24 opening.
• As such, we remain excited by the potential for the ongoing turn at the company, which we believe will be even further driven by continued retail expansion, and reiterate our Buy rating and $25 price target for AKA.

• In 2021 the JPX established new Listing Rules, and in April 2022 introduced new market segments (Prime/Standard/Growth) to much fanfare. Today, the TSE basically said those changes were meaningless.
• Today, the TSE announced proposed new rules for TOPIX constituent selection. There is a 2-month consultation period, then rules come out end-Sep 2024. Expect few changes from the Proposal.
• NextGen TOPIX will be created October 2026. 3-4 dozen ADDs, 500-600 DELETEs to create an index of 1,100-1,200 names. Some obvious large impacts 2+yrs from now, but this changes IPOs.

• Guzman Y Gomez (0817833D AU) has raised A$335.1m in a primary + secondary offering, valuing the company at A$2.23bn. The stock starts trading on the ASX Ltd (ASX AU) today.
• Just over 54% of the shares are escrowed which means there is a lot of stock that will be available for sale on listing day.
• Guzman Y Gomez (0817833D AU) could be added to the S&P/ASX 300 Index in September and there could be global index inclusions in November and December.

• Hyundai’s IR team appears to have communicated that a new shareholder return policy would be unveiled at the rescheduled CEO Investor Day in August.
• Hyundai aims to boost shareholder returns above 30% by canceling ₩800B to ₩1T in shares annually. The new dividend strategy won’t debut in August; last year’s three-year plan stands.
• Equal cancellation ratios apply to common and three types of preferred shares. August’s timing, with ISA tax reforms potentially favoring preferred shares, may enhance prefs’ price impact relative to ords.

• Understanding the audience is the number one rule in content creation and building relationships is important globally
• Min Yong Kim started her career in food and nutrition but transitioned to the entertainment industry, eventually joining Netflix
• Lessons learned include the importance of knowing your audience and the shift in thinking about content from traditional media to digital platforms

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Webtoon Entertainment (WBTN US) is looking to raise up to US$315m in its US IPO, down from an earlier reported float of US$500m.
• 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 share additional thoughts on valuation.

• Guzman Y Gomez  raised around US$221m in its upsized Australian IPO. 
• GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
• We have looked at the company’s performance  and valuation in our past notes. In this note, we talk about the trading dynamics.

• Bloks Group, a fast-growing toy company and leader of assembly character toys, filed for a Hong Kong IPO. The company is headquartered in Shanghai, PRC, and has 410 full-time employees.
• Bloks Group has raised $200M+ to date from investors, including YF Capital, Legend Capital, Source Code Capital, Gaorong Capital and SinoMedia Asia Pacific.
• The Chinese toy maker has delivered an exceptional revenue hyper-growth of 169% y/y in 2023. Elite operating metrics and impressive financial profile make IPO attractive for investors.

• The premium fashion market in Japan is growing again and it is not just department stores.
• One of the leader is United Arrows, whose main urban chains are on a roll, up double digits, but is being held back by lower priced suburban chains.
• It will now focus more  on the premium market through aggressive category expansion, new brands and M&A.

• Even companies with high valuations and return on capital have room to further raise their return on capital and valuations because of cash allocation challenges.
• Companies whose valuations have not changed over the past year have low ROE and ROA, yet have high policy shareholdings. They have not taken steps to improve return on capital.
• As for whether many companies without high foreign ownership can raise their return on capital and valuations, strong will of management to achieve their goals is necessary.

• Market leader with growth potential – GEO HOLDINGS operates second-hand store chains 2nd STREET, GEO, OKURA, and off-price chain store Luck Rack.
• Its 2,027 domestic stores give it the leading market share in Japan.
• The company is making significant investments to extend its home advantage and build on its 2018 expansion overseas where it has 81 stores.