Consumer

• L’Occitane (973 HK) disclosed a conditional voluntary offer from Reinold Geiger at HK$34.00, a 15.3% premium to the last close and a 30.8% premium to the undisturbed price (5 February).
• The minimum acceptance condition is that the offeror holds at least 90% of the shares held by disinterested shareholders, which enables the offeror to exercise compulsory acquisition rights.
• Irrevocable and letters of support to accept represent 37.96% of disinterested shares. An attractive offer (representing an all-time high) should facilitate the offer being declared unconditional.

• On 28 Feb, the Nikkei reported (an article I missed) Mitsubishi Corp (8058 JP) would seek to unload its 35% stake in Kfc Holdings Japan (9873 JP) 
• The stock popped, then continued to rise further. After the close Friday, the Nikkei reported MitCorp was close to a deal with Carlyle. A deal is apparently expected imminently.
• I expect this could be a “Split Price Deal” (like Hitachi Transport and Pasona).

• The Nikkei reports that Carlyle is in the final stages of buying Mitsubishi Corp (8058 JP)’s 35% stake in Kfc Holdings Japan (9873 JP), which will result in a tender offer. 
• The structure will likely be similar to the KDDI Corp (9433 JP)/ Lawson Inc (2651 JP) tender, where MitCorp provides an irrevocable NOT to accept but vote for share consolidation.
• The shares have been up 33.6% since Nikkei flagged the sale on 28 February. KFC Japan will trade in line with peers’ multiples at a JPY5,700 offer.  

• After nearly six years of conjecture, rumour – plus the key shareholder (holding 72.63% of shares out) contemplating a takeover – we finally have an Offer for L’Occitane (973 HK).
• The price? $34/share, a 30.77% premium to undisturbed, and a figure a shade below the  HK$35/share flagged by Reuters last August deemed “false and without basis“. The price is final. 
• This takeover is a Voluntary General Offer. The key condition is securing 90% of disinterested shareholders holding 27.36%. 9.6% of that number have provided irrevocable undertakings or letters of support.  

• Although Shein has yet to formally announce the listing destination, there is a growing anticipation that the listing venue could be London, rather than New York. 
• It has been reported that the company has more than doubled its net profit to more than US$2 billion in 2023. 
• The company is currently seeking a corporate value of nearly US$70 billion to US$90 billion in the Shein IPO which would be one of the biggest IPOs globally in 2024. 

• Japanese instant noodle manufacturer Toyo Suisan Kaisha (2875 JP) has become the newest target for activist investors in Japan.
• Nihon Global Growth Partners Management, Inc argues that Toyo Suisan’s investments are overly concentrated in its legacy businesses, despite these ventures yielding low returns.
• Therefore, they are recommending that Toyo Suisan exit its legacy businesses, increase the payout ratio to 40%, and use some of its excess cash for a share buyback of ¥20bn.

• Last week Monday, Tencent confirmed the early release of Dungeon and Fighter Mobile, a highly anticipated mobile adaptation of the computer game developed by Nexon.
• The game is expected to be released in China on the 21st of May following positive test results.
• Tencent was the 11th best performing constituent in the HSTECH index for the week (out of 30), returning 14.7%. The index ended the week up 13.4%.

• Fuyao Glass Industry Group (3606 HK) is the largest auto glass producer in the world, with an estimated 40% market share globally, and a dominant 65% market share in China.
• The investment case for Fuyao include:  ASP increase from product mix upgrade; increasing sales volume due to more auto glasses needed per car; and improving margins.
• The company has production bases in China with annual production volume of around 32.5 million units, and in US with annual production volume of around 5.5 million units.

• 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 providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
• Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-April 2024.

• Spanning the globe for current best-in-breed auto players shows diverging action.
• New pair suggestion: Long Tesla/Short Rivian. Bottom could be in on TSLA
• Updated JD.com general status from last week’s China/Japan Note encouraging.

• Companies in India have disclosed their shareholding pattern as of end-March in April. There are companies with significant float changes from end-September and/or end-December.
• The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
• Depending on the date that the shareholding was published, there could be 14 stocks with passive inflows from global trackers while 7 could see passive outflows in May.

• China Education Group (839 HK) has turned more attractive after a valuation retreat and the return of reported and adjusted net profit to a positive trend in its 1H24 result.
• Increase in the proportion of undergraduate studies, a better subject specialisation mix, higher accommodation revenue, and a rise in international education will drive unit student revenue.
• More capacity upgrades will allow for a steady increase in student enrollment. Management expects adjusted EBITDA margin to stay stable in the next few years.

Key points

• Jumbo Interactive Ltd (ASX: JIN) operates in the online lottery industry in Australia, with a 20% market share and offering digital Australian lottery tickets through its mobile app and website.
• The company, founded in 1995 by CEO Mike Veverka, is highly cash generative and has a favorable duopolistic market structure, positioning it for potential stock value growth and expansion as more customers shift to online channels.
• JIN is viewed as a defensive investment option with strong margins and cash generation potential, particularly through its SaaS/Managed Services offering, making it an appealing choice for investors looking for long-term growth.

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.

• Decline in TPR’s stock price after acquisition announcement
• Author believes acquisition will benefit Tapestry Inc financially and strategically
• Author sees dip in stock price as buying opportunity and remains bullish on TPR’s long-term prospects

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.

• Asset Turnover and ROA deteriorated as a result of accumulating cash on hand rather than investing. There was also insufficient R&D to create products that could have stronger pricing power.
• Conditions are ripe for investment expansion, as demand for equipment replacement is rising due to long-standing CapEx restraints, and there is no need to accumulate more cash.
• Companies are now in the stage of raising return on capital to increase reinvested cash flow from the stage of temporarily increasing earnings through price pass-through.

• Eagle Nice International Holdings’ dividend yield averaged 9.2% from FY 2019 to FY 2023. Its annual dividend payout averaged 72.2% in the same period.
• Eagle Nice (Intl) Hldgs is mainly engaged in the design and manufacture of sportswear for adults and children on an OEM basis. Yue Yuen Industrial Holdings is the largest shareholder.
• Eagle Nice Holdings also has attractive valuations and consistent growth in sales and profits. 

• We are reiterating our Buy rating and $22.50 price target for Betterware after the company reported an impressive 1Q, with better than expected top line results.
• Further, management reiterated 2024 revenue and EBITDA guidance.
• There was also material progress at Betterware, which enjoyed double-digit increases in average ticket and revenue and is nearing the shift to positive growth in Associates.

• We are reiterating our Buy rating and $22.50 price target for Betterware after the company reported an impressive 1Q, with better than expected top line results.
• Further, management reiterated 2024 EBITDA guidance and increased the upper end of the revenue range.
• There was also material progress at Betterware, which enjoyed double-digit increases in average ticket and revenue and is nearing the shift to positive growth in Associates.

• GTX reported first quarter results exhibiting the sales decline management had been warning could appear in the first half of the year
• GTX managed to generate positive free cash flow to repurchase $109 million worth of the stock in the quarter. GTX has been routinely buying back stock with free cash flow.
• GTX maintained its annual guidance on all metrics with management asserting much of the growth would come in the second half of the year

• Yamaha releases new guidance on May 8 for its fiscal year ending March 2025. The  previous Mid-term plan for OP was ¥68bn, while the consensus is looking for just ¥40.9bn.  
• We expect ¥50bn, and think the shares are as much as 30% undervalued.
• Analysts have responded to multiple downward revisions to current year guidance, driven by collapsing Piano sales to China, but haven’t responded to cost cutting or growth in other product lines.

• With the rise in Coupang’s market cap, it’s imperative to evaluate if the Korea Index can attain eligibility to include foreign-listed companies.
• Coupang’s 45% YTD surge nears a $41B market cap, with a 65% free-float rate equating to $27B. Yet, to meet Korea Index eligibility, an additional $23B is needed.
• Aside from Coupang, more companies are preparing for overseas listings. Also, potential stock price increases for Coupang should be considered. The combined market cap approaches the US$50B threshold.

• China Resources Beverage (Holdings) Company Limited is looking to raise US$1bn in its upcoming Hong Kong IPO. The bookrunners on the deal are BofA, BOCI, Citic, and UBS.
• China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages  in China.
• According CIC, it was the second largest company in the packaged drinking water market in China and the largest company in the purified drinking water market in 2023.

• CyberAgent Inc (4751 JP) reported 2QFY09/2024 results yesterday which shows further improvement across all three segments. Both 2Q revenue and OP beat consensus estimates, with OP by a huge margin.
• Newly released game titles have helped further recovery in Gaming business while Media segment reported its first-ever OP since the company began investing on AbemaTV.
• As we continue to reiterate, the worst is over for CyberAgent (CA) and we remain positive over the company’s growth prospects.

• The two groups with the highest percentages of female board members (companies with over 30% and 20%-30%) are consistent with the characteristics of companies in which overseas investors primarily invest.
• Companies with over 30% female board members show superior values in many of Board Practices and Key Actions evaluation items. This may be due to improved engagement by overseas investors.
• Companies with no female board members have the lowest values in most Corporate Governance Practices items. Therefore, percentage of female board members indicates the seriousness of improving corporate governance practices.

• LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall, according to Chief Financial Officer Jean-Jacques Guiony.
• The world’s largest luxury goods group is looking to attract more Chinese shoppers amid a broader slowdown in demand for expensive bags, jewelry, and perfume.
• Many consumers have been making their purchases outside of China, especially in Japan, where the yen is weak, the French conglomerate disclosed in its 2024 first-quarter earnings released last week.

• Yesterday, post-close, Bloomberg reported a headline “*SILCHESTER REPORTS NIKON STAKE; MAY SEEK CAPITAL POLICY CHANGES“
• That was exciting. It was in all caps. It was activist-ish-y. Today the stock rose 10.3% and we got another article saying it was up because of Silchester’s filing.
• Beware the Bloomberg headline. Nuance is sometimes lost. They aren’t always designed to help investors invest. Often, the main purpose is clickbait.

• In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the June 2024 index rebal event.
• I currently see no changes for the DAX index but there could be one change for the MDAX index.
• M&A candidate MorphoSys AG (MOR GR) could be deleted in the run up to the June 2024 review.

• 99 Speed Mart Retail Holdings (99SPD MK) is looking to raise US$300m in its upcoming Malaysia IPO.
• 99 Speed Mart Retail Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
• In this note, we look at the firm’s past performance.

• March Same-Store sales in China disappoint mainly due to diamond jewellery demand
• Overall, gold demand in China continues to rise both in the retail and the official sector
• Visitor arrivals to Hong Kong pick up but are still ~40% below pre-Covid levels.

• The Grocery Outlet management reported its full-year 2023 earnings results, which were slightly ahead of expectations.
• The company demonstrated strong customer acquisition and traffic, driven by competitive pricing and its treasure hunt shopping experience.
• The acquisition of United Grocery Outlet is one of the major highlights of the company’s performance, as it added 40 stores to the network.

• Mister Car Wash unveiled its financial performance for the fourth quarter and full fiscal year ending December 31, 2023.
• The annual results demonstrated solid progress driven by the company’s efforts to enhance its services, physical operations, and team.
• During Q4, sales rose 7% to $230 million, and adjusted EBITDA grew by 5% to $69.5 million.

• In the fourth quarter of 2023, Murphy USA reported solid performance which supports their enduring commitment to drive sustainable value for its stakeholders.
• The company has been successful at achieving more from the same loyal customers, with statistics showing these customers spend 50% more than they did in 2019.
• Furthermore, the company’s new loyalty members showed similar behavior as their most loyal customers in 2019, making about 5 transactions per month and spending at higher levels.

• The fourth quarter and full fiscal year 2023 earnings offered insights into Frontdoor’s financial performance, key initiatives, and strategic moves being executed by the company.
• From the CEO, Bill Cobb’s comments, it is evident that 2023 was a record year in which the company exceeded Expectations and delivered exceptional financial performance.
• 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.

Intralot enjoyed good underlying trends in performance in FY23 with encouraging trends in its main countries of focus and further progress on profitability. The much-improved balance sheet and extension of debt maturities mean management can focus on the significant business development opportunities available in FY24 and beyond. The share price looks attractive in the absence of potential new contract wins, which could be materially enhancing to the valuation.

• We are reiterating our Buy rating, $37 price target and projections for Guess?
• after visiting stores in the Metro New Your City area and Long Island.
• Management continues to materially upgrade the Guess?

• Anta Sports Products (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in post conference calls. 
• Anta: Retail sales started to accelerate in mid-March, and March were better than January and February. 
• Li Ning:  offline retail sales down low-single-digit in 1Q24, driven by wholesale down mid-single-digit, while retail grew mid-single-digit.  E-commerce grew 20-30% yoy.  

• At the end of 2023, Chokwang Leather owned 190.3 billion won worth of Berkshire Hathaway shares, which represents 56% of Chokwang Leather’s market cap. 
• Chokwang Leather also has 3.1 million treasury shares (46.6% of outstanding shares). It has the highest levels of treasury shares as a percentage of outstanding shares among Korean stocks.
• Chokwang Leather is likely to be one of the key companies to be targeted to improve its corporate governance as part of the Corporate Value Up program. 

• Plunging sales & growing losses, severe price cuts & layoffs, failed FSD, M2 dropped for Robotaxi, and more, confirm that Elon Musk won’t fix Tesla’s most serious problems—which he created.
• He still demands his “unfathomable” pay package be restored, and his feckless, captured Tesla Board is doing exactly what he wants.
• But what Tesla’s Board should do, what it should have done years ago, is fire Elon Musk, the single greatest risk to Tesla’s future.

• Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid
• 1Q operating profit beat the analyst consensus, but the upward revision to full year is minor and falls short of street estimates
• The stock has priced in an improving outlook. However, valuations are now looking full compared to historical levels. 

• On March 21st, Lululemon reported FY23 results. All things considered, the results were good. Guidance, however, caused some upset. Lululemon shares are down ~29% this year; after being down just 6% before the report, and is currently the 8th worst-performing stock in the S&P 500.
• Lululemon’s implied 11.5% revenue growth for 2024 is a notable deceleration from years prior; having averaged an annual revenue growth rate of 24.4% over the last 5 years.
• This year’s revenue guidance is closer to, but still behind, the 5 years before that; where Lululemon averaged 15.7% annual revenue growth.

• ZEEKR, a Chinese EV maker, plans to raise up to $500M in US IPO. The company put its offering on hold in 2023 due to a mismatch in valuation expectations.
• A fast-growing company will offer ADSs, and the size of the company’s potential IPO is down from their initial target of up to $1B, a negative sign for ZEEKR shares.
• EV stocks have significantly underperformed the broader market this year amid price wars, slow growth ahead and intense competition, especially in China.  

• Fosun Tourism (1992 HK) saw a healthy 15.8% overall business volume growth in 1Q24, with net profit sustaining improvement. This should justify a catch-up in share price.
• The cumulative bookings for Club Med for 1H24 have increased 13% YoY, while those for 2H24 have increased 10%. Positive forward bookings indicate an encouraging outlook.
• Four new Club Med resorts to be opened in 2024 and the increase in attractiveness of Hainan after it turns into a duty-free island by 2025 are both drivers.   

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-term average EV/sales multiple for FY24.

• Meituan has navigated through its most challenging period since IPO as competition moderates and reorg comes close to completion. 
• 1Q results should kick off an upward earnings cycle through to the end of 2024 when the company’s efforts to revamp loss-making new initiative businesses gather pace. 
• That said, lack of clear topline driver remains the key reason for our cautious view about the sustainability of re-rating. Maintain neutral.

• We are reiterating our Buy rating, projections and $41 price target for Build-A-Bear Workshop after visiting stores in Long Island and Connecticut.
• Post-Easter, Build-A-Bear has expanded the product mix both large and small, adding giant versions of key “furry friends” and rolling out new Mini Beans to drive incremental add-on purchases.
• Further, with graduation season just starting (from pre-K to college), Build-A-Bear is ready with fun and unique items for every grad.

• A week after the State Council issued “Several Opinions” (关于加强监管防范风险推动资本市场高质量发展的若干意见》), the CSRC announced Friday five capital market cooperation measures with HK Connect. The goals are to increase cross-border investor flows.
• They include: a broader range of ETFs in Connect, including REITs in both directions, include RMB counters in Southbound, improve mutual recognition of funds, increasing China IPOs in Hong Kong.
• RMB Dual Counters Southbound-eligible will take time. They have some homework, but it is on the “To Do” list “as soon as possible and smoothly.” Watch impact on H/A Pairs.

• Jardine Cycle & Carriage (JCNC SP)‘s current implied stub value is around its highest-ever level.
• The simple ratio of JCNC/Astra International (ASII IJ) is at its highest level outside the 2008 GFC.
• A weak Indonesian rupiah is likely a factor. Still, JCNC is trading rich to its NAV. A takeover from parent Jardine Matheson Holdings (JM SP) is idealistic.

• Value Act’s recent statement might suggest that they have prevailed and Seven & I Holdings (3382 JP) has yielded to their demands. However, the reality might be less straightforward.
• Value Act sought new market expansion, but Seven & I is focused on reinforcing its presence in existing, well-established markets.
• Given Value Act’s impatience, their acceptance of Seven & I’s plan for a 2026 Super Stores IPO, contingent on a business transformation, is unexpected.

• We believe the revenue growth will be slow in 1Q24, but it will still be rapid for the full year 2024.
• We also believe the operating margin will hit the historical high in 1Q24, but it will be just stable for the year 2024.
• We conclude the stock has an upside of 60% for the year end 2024. Buy.

• In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the June 2024 index rebal event.
• Since my last insight, my index change expectations and flow expectations have changed significantly.
• My latest estimate for one-way flow in June 2024 is US$1.06bn (down from US$1.22bn a month ago).

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND’s consecutive buying streak ended on Monday 25-March, then started again. NORTHBOUND has been selling recently (this week and last buying semi tech, selling renewables)
• Hs fell sharply vs As. AH Premia very wide. Alpha on portfolio vs straight H vs A but a bad week as liquid Hs underperformed liquid As by 2.5+%.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net SELL RMB 6.7bn of A-shares on decent volume. A-shares out-performed H-shares quite dramatically, taking back H-share gains from the week before, which reversed prior weeks.
• This week saw net buying of semiconductor/chip names, and net selling of the EV/Solar/Battery space and buying of the Ping Ans, but most notable was liquid A vs H performance.

• The story of Hero is the story of persistence, collaboration and achieving goals that many would have regarded as impossible.
• From its humble roots of selling bicycles in 1956 Ludhiana Punjab, to becoming the world’s largest two wheeler company is an extraordinary feat.

• Maintaining the momentum, protecting its market share and setting sights towards ‘Future of Mobility’ is something special.

• Sichuan Baicha Baidao Industrial (2555 HK) (SBBI) raised around US$330m in its HK IPO.
• SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
• We have looked at the company’s performance and valuations in our past note. In this note, we talk about the trading dynamics.

Key points

• VFC is a large apparel company with iconic brands such as The North Face and Vans
• Shares are currently undervalued following a disappointing FY23, with estimated fair value of $40/share
• Strong brands and opportunities for portfolio rationalization and margin improvement make VFC a potential growth opportunity with new management in place.

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.

• JD.com (9618 HK) announced this week that it has repurchased 2.8% of the outstanding shares of the company in the first quarter of 2024. 
• Improved shareholder returns is a key thesis for the stock, given that there is little market expectation on such given limited track record.
• A positive catalyst on full year performance could be the government’s announced stimulus policy for home appliance in April this year (trading old for new).

• Stricter voting standards for domestic investment managers seem aimed at increasing value through engagement for companies that show little improvement in efforts to improve stock price and return on capital.
• Stricter voting standards for policy shareholding ratios of domestic investment management companies are expected to push companies to consider reducing cross-shareholdings. Reference to deemed shareholdings is also commendable.
• Since engagement of overseas investors has been effective in increasing value of companies, engagement by Japanese investment managers more seriously than before will contribute to enhancing the value of companies.

• Since my previous insight on China Tourism Group Duty Free (1880 HK) in October 2023, the stock has declined 33%, and year-to-date, the stock has declined 13%.
• The company faces headwinds from continued overall weakness in Hainan duty free sales and potentially increased competition in Hainan.
• The company already announced preliminary 1Q24 results, with sales down 9% yoy and net profit flat.  The company is trading at 18x 2024 earnings.

• Vinfast (VFS US) released 1Q2023 results, with its revenues increasing three-fold YoY but falling QoQ due to the seasonal impact of Lunar New Year on both EVs and EV motorbikes.
• The company saw a significant pick up in its sales to the US and continued to increase its dealer network which should drive future sales along with new models.
• More than half of Vinfast sales were to related parties, which is an overhang in terms of the sustainability of its business models, whilst valuations remain above peers.

• In the Q3 2024 earnings, NIKE, Inc. outlined how it is driving growth despite not performing to its potential.
• The company is focusing on four key areas: a sharpened focus on sport, continuous product innovation, bolder and more distinctive brand marketing, and collaboration with wholesale partners to expand the marketplace.
• A significant measure of progress is the alignment of the organization to focus on the consumer and sport.

• A pullback in global equities is underway following steep uptrend violations on MSCI ACWI (ACWI-US) and EURO STOXX 50. Both are 4-5% off their highs; further downside may be limited.
• Several 5%-10% pullbacks are to be expected in any given year, particularly after the historic 5-month rallies, so we view this as healthy and normal within the ongoing bull market.
• ACWI-US is currently testing important support at $105; if this area were to break, next major supports are $102 and $99; this is where we would be buying.

• The problem lies in the fact that even with a 10% increase in net profit, ROE only grew by 0.5%. This is due to having too much cash on hand.
• TSE has provided an opportunity for companies to develop measures to increase their corporate value. However, not many companies can derive concrete ways to effectively use cash.
• Since many companies are expected to take time to find concrete solution to this problem, an increasing number of companies are expected to go private once they have done so.

• ADEA announced it has licensed its intellectual property to Austrian service provider Magenta Telekom in what could be of bigger significance than what ADEA’s stock price portrays
• The license is the first for ADEA with a European service provider. This is also the first major customer win ADEA has announced since becoming a standalone IP company
• The size of the deal with Magenta is most likely small, but our focus is on what it could mean for ADEA. Magenta is owned by T-Mobile parent Deutsche Telekom.

• During the latest earnings, W.K. Kellogg Co demonstrated its strategic plans for the future and reported strong financial results for the fourth quarter and fiscal year 2023.
• The CEO, Gary Pilnick, emphasized the company’s commitment to delivering on its promises and its focus on execution and engaging its team.
• The company achieved net sales at the high end of their guidance range and EBITDA margin above their guidance range indicating effective business planning.

• We are reiterating our Buy rating, projections and $22.50 price target for Betterware de Mexico with the company announcing 1Q24 (March) results after the close on Thursday.
• We believe, with momentum returning at the Betterware division, JAFRA remaining on a new product and marketing focus, the United States market becoming a larger emphasis and BWMX continuing to offer a compelling (and secure) dividend yield of 8.5%, BWMX remains well positioned to reward investors on multiple levels, and we reiterate our Buy rating and $22.50 price target.

• We are initiating coverage of a.k.a. Brands Holding Corp.
• (“a.k.a. Brands” or the “company”), a leading owner of primarily online apparel-based brands focused on Generation Z and Millennial consumers, with a Buy rating and $14.00 price target, or 10.9X our 2025 EBITDA projection of $20.2 million.
• The company’s brands include: 1) Princess Polly, focusing on 15 to 25 year-old women; 2) Petal & Pup, which offers feminine styles for 25 to 34 year-old women; 3) Culture Kings, a street wear destination; and 4) mnml, a high-quality street wear designer focused on bottoms.