Consumer

• This is our first report on Wendy’s Company.
• In Q4, Wendy’s global systemwide sales grew over 3%, supported by global same-restaurant sales growth and the benefit of global net unit growth.
• U.S. company-operated restaurant sales grew due to higher average check figures driven by cumulative pricing of around 4.5%.

• Mitra Adiperkasa (MAPI IJ) finished the year with strong sales growth of +17.4% YoY in 4Q2023 with solid growth across all segments and improving margins. 
• The company continues to add to its 150-strong brand portfolio in Indonesia, as well as extending its reach further in Southeast Asia and growing its omnichannel capabilities. 
• MAPI remains our top retail pick in Indonesia with its focus on the resilient upper-middle segment in Indonesia and increasing regional exposure. Valuations remain attractive at 12.5x FY2024E PER.

• Overseas investors tend to invest in companies with large market capitalization and high profitability, resulting in higher stock price valuations. They also tend to avoid investing in listed subsidiaries.
• Since companies with over 20% foreign ownership show superior board practices, it’s reasonable to assume that board practices improve as foreign ownership increases and the influence of overseas investors increases.
• Companies with more than 30% foreign ownership have many items that generally show excellent values in Key Actions. However, all companies still face challenges in cash allocation.

• Pinduoduo Holdings, Inc. closed its fiscal year of 2023 in a positive trajectory.
• The company reported sustained growth in consumer engagement on its platform in its fourth quarter results.
• High-quality development remains a key strategy for the company.

• This is our first report on golf distributor, Acushnet Holdings Corp.
• The company’s 2023 performance has been buoyed by the growth of its Titleist golf balls, increased 13%, led by strong demand for its new Pro V1 models; golf ball sales increased in all regions with the U.S. and EMEA markets leading the way.
• Despite concerns about the EMEA region, golf balls and clubs were vibrant, affirming golfers’ trust in the quality, consistency, and game performance of the Titleist brand.

• This is our first report on M.D.C Holdings, a major American construction company specialising in property development and mortgage services.
• The company reported strong profitability for its third quarter earnings call in 2023, with a net income of $107 million ($1.40 per diluted share).
• Despite the rise in mortgage rates, M.D.C. witnessed a robust demand trend, mainly attributable to the company’s financial incentives and lack of existing homes supply that drew more buyers to the new home market.

• The Q4 2023 earnings of Lululemon Athletica Inc. highlighted positive operational results with revenue increases across most regions.
• Total revenue was reported to have increased by 16% for the quarter.
• In the Americas, the increase was 9%, while Mainland China saw a rather prominent rise of 78%.

• General Mills reported encouraging third quarter results, especially with the underlying performance improvement in North America retail and the pet segment.
• CEO Jeff Harmening forecasts that the fourth quarter sales would look similar to the third quarter in terms of annual performance.
• However, there is uncertainty due to innumerable external variables that could influence the outcome.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.

• Restoration Hardware (RH) has consistently demonstrated its resilience in the face of various market challenges.
• RH’s Q3 2023 earnings call reiterated this persistence as the company navigated through higher-than anticipated expenses and a challenging housing market, reflecting on both the areas of strength and weakness in the company’s financial performance.
• One of the highlights was that the company’s net revenues for the quarter stood at $751 million, which was at the midpoint of its guidance.

• Despite being impacted by unfavorable weather during January, Five Below’s sales ended within the guidance and comparable sales were slightly more than their expected figures.
• The company’s growth was mainly driven by the increasing popularity of Five Beyond format stores and the upward trend of customers embracing the value-for-money concept.
• The total fourth quarter sales were $1.34 billion, witnessing a growth of over 19%, and the comparable sales increased by 3.1%.

• Koito Manufacturing (7276 JP) is a $4bn marketcap (~$6bn sales) Toyota Group auto parts manufacturer specialising in lighting parts, famous for being a T.Boone Pickens target in the 1980s.
• As Toyota Group’s leaders restructure their cross-holdings and try to get to 1.0x PBR and a high enough ROE to sustain it, capital efficiency is on the block. 
• Koito today announced a revised Mid-Term Management Plan, a change in KPIs (higher), a large shareholder return plan, and a large buyback. As always, the fun is in the details.

• Multi Bintang Indonesia (MLBI IJ) reported its FY23 earnings with revenues/profits up 6.7%/15% YoY.  Q4 FY23 revenues and profits were up 5.6%/17% YoY. 
• OPM (%) expanded 180 bps from 40.6% to 42.4%, and NPAT margins 240 bps to 32.1%. We believe that trends will continue to improve in 2024.
• At its board meeting, we expect the company to declare a full-year FY23 dividend of 500 Rph/share ( implying a 7% yield). The H123 dividend was 110 Rph/share.

• PT Nippon Indosari Corpindo (ROTI IJ) saw a relatively slow finish to the year with a slight decline in sales but the key drag came from a higher return rate.
• 4Q2023 did not see the usual seasonal spike but 2024 has started well and the return rate has come down, which will boost profitability as new products gain traction. 
• ROTI has launched several more affordable products to help drive its push into general trade whilst raw material prices remain under control. Valuations are attractive with recovery ahead.

Gym Group has accompanied confirmation of FY23 profit resilience and continued buoyancy (like-for-like revenue up 12% in the first two months of 2024) with a clear commitment ‘to accelerate, not reinvent the wheel.’ The latter is telling with new senior management endorsing Gym Group’s sweet spot as a low-cost operator in the long-term growth market of health and fitness. Its confidence in material scope for enhanced pricing and member acquisition and retention is complemented by expansion targeted at sites with perceived 30% return on invested capital (ROIC) potential (10 to 12 openings in 2024 with c 50 over three years), although the typical two-year profit maturation profile means no quick earnings fix. Improving finances (1.7x leverage) should allow this as well as increasingly important technology investment.

• We are reiterating our Buy rating, $37 price target and projections after visiting Guess?
• stores in the Metro NYC area and Long Island.
• We believe, with Spring now beginning to fully flow into stores, Guess?

Dalata’s FY23 deployment of €156m in high-profile hotel opportunities in London, Amsterdam and Edinburgh as well as the newly announced proposed redevelopment at Manchester Airport show the scale and nature of its accelerating growth strategy, enabled by ‘considerable firepower’ (FY23 net debt to EBITDA after rent of just 1.3x). While the focus on cities in the UK and Continental Europe with favourable dynamics, for example London, is self-evidently appealing, there is reassurance in the success of 2022 openings in the UK and a capital-light approach on the Continent. Dalata’s trading agility (like-for-like FY23 EBITDAR margin in line with 2019 despite high cost inflation) and maturing estate (H223 adjusted EBITDA up 20%) bode well for 2024 after a market-led slow start in Dublin.

S4 Capital had a difficult FY23, as flagged, with reduced client confidence and spend, particularly from those clients in the tech sector, and on larger transformation projects. Management is cautious in the short term, with no substantive changes likely in H124, but sees conditions likely to improve in H224 as economic pressures ease. The group’s longer-term prospects should be buoyed by its positioning across data and digital marketing and, in particular, in incorporating AI into hyper-personalisation at scale. The share price is down 77% y-o-y, -22% year-to-date, reflecting the history and short-term prospects rather than a medium-term view.

• KDDI has announced the launch tomorrow of its Tender Offer to buy out the minorities in Lawson Inc (2651 JP). 
• It’s still too cheap. It is still a somewhat non-transparent and unfair process as far as I can tell. And it does not adhere to the METI Fair M&A Guidelines. 
• There SHOULD BE some activist interest to get KDDI to bump but it is not clear that will show up. 

• Lawson Inc (2651 JP) has announced that the pre-condition for the KDDI Corp (9433 JP) tender offer is satisfied. The offer terms are unchanged at JPY10,360 per share. 
• The offer is arguably light due to the market re-rating, does not reflect significant synergies and is below the midpoint of the IFA DCF valuation range. 
• Nevertheless, the offer will likely succeed as it represents an all-time high, with no vocal opposition, an achievable 30.2% minority acceptance rate, and the shares never trading through terms. 

• While domestic revenues may have slowed, Uniqlo’s domestic OP shows upside potential driven by upside to GM and a gradual reduction in SG&A expenditure.
• Simultaneously, Uniqlo International is exhibiting strong performance, with anticipated revenue and OP growth of 21% and 30% YoY respectively.
• Despite expecting a strong earnings beat, concerns over high valuations and index issues make us cautious about trading Fast Retailing (9983 JP) in the current earnings cycle.

• Shenzhou Intl Group Holdings (2313 HK) reported 2023 results yesterday.  2H23 continued to be weak, with sales down 6% yoy.  Net profit grew 10% yoy in 2H23.
• Most importantly, the company sounded quite bullish on 2024 during the results briefing, which greatly improves the visibility in the order recovery thesis of the company.
• I continue to believe that Shenzhou is the best proxy for gaining exposure to the global sportswear sector, especially given the improved visibility now. 

• Full -year 2023 results  and 2024 forecasts indicate business going to plan
• The Baijiu division, key to a rerating, grew sales 50% y/y in the first two months of the year
• The beer division continues to reap the benefits of its premiumisation strategy

• Lotte Tour Development announced that it will conduct a major asset revaluation which could positively impact its share price. 
• The company’s assets will increase to 2.39 trillion won and equity will increase to 569.3 billion won (up more than 8x) at end of 1Q 2024 due to asset revaluation.
• As a result of the asset revaluation, the company’s balance sheet will improve significantly and this likely result in many investors taking another look at the company for potential investments. 

• With around 3.4% QoQ CC revenue growth in Q3FY24, the BPO business, Firstsource Solutions (“Firstsource”), is recovering back to normal, after seeing cyclical dip over the past couple of years.
• The FMCG business is scaling up well. Q3FY24 revenues came in at INR 135cr, a growth of around 12% QoQ, led by festive season demand. YoY growth was 17%+.
• The Sports business reported muted revenues in Q3FY24 as currently the revenue stream is dominated by the IPL event which typically happens in the March to June period.

• Abercrombie & Fitch Co.
• emerged from 2023 with significant achievements, marking it as a defining year for the company.
• The brand witnessed a 15.8% increase in sales, reaching $4.28 billion, which not only represents its second highest annual sales level in history but also a testament to its robust growth strategy.

• This is our first report on sports products major, Academy Sports and Outdoors.
• In the Q4 and 2023 fiscal year call of Academy Sports and Outdoors, the management reported impressive sales improvement during the quarter and significant progress in their long-term strategic objectives.
• Sales came in at $1.8 billion, which was a 2.8% increase in total and adjusted earnings per share increased by 8%.

• Although unavoidable under the provisions of Broadcasting Act, the fact that the right to receive dividends as interest-bearing securities was inhibited was problematic in terms of fairness with other shareholders.
• NTV Holdings, which has ignored this issue, changes its policy, which is a positive impact of “TSE’s request,” but NTV’s seriousness can be measured by whether it raises its ROE.
• If the intention is to leave cross-shareholdings intact and attract overseas investor purchases through some share repurchases, there would be little prospect of a serious increase in ROE.

• Total revenue increase by 42% and automobile revenue increased by 49% in 2023.
• The gross margin improved significantly in 2023, especially in 4Q23.
• We believe BYD will move its focus from ‘low price for sales volume’ to ‘development of new vehicle models’.

• HanaTour seeks new ownership after 4 years under IMM PE. Despite COVID-19 setbacks, successful restructuring attracts attention from online travel and investment giants.
• Market rumors hint at Yanolja and Hotels.com interest, possibly intensifying acquisition competition, leading to a higher price premium. IMM’s 16.68% stake may value at ₩250B, a 35% premium.
• Last year’s mandatory tender offer for 50%+1 share awaits legislation. Unlikely to affect HanaTour sale. Nonetheless, potential acquirers may buy additional shares, suggesting further premium formation in share price.

• At noon time today, Anta Sports Products (2020 HK) released strong 2023 results which beat expectations. 
• Anta currently trades at a forward PE of 18x based on estimated 2024 earnings (assuming a conservative 15% yoy growth in 2024 earnings). 
• I expect the company’s net profit to grow 15-20% CAGR in 2024-2026.  Anta’s historical forward PE is around 24x since 2017. 

• Bukalapak.com (BUKA IJ) booked a slightly weaker finish to the year than expected with a slowdown in revenue growth in 4Q2023 and a miss on adjusted EBITDA breakeven.
• The key reason was a thinning out of non-performing specialty businesses which impacted short-term revenues but will improve revenues and adjusted EBITDA. as the focus shifts to higher take-rate businesses.
• Bukalapak.com PT Tbk (BUKA IJ) is guiding for +15-20% revenue growth and positive adjusted EBITDA in 2024 with execution on this being paramount. Valuations remain attractive.

• The pace of share repurchases in 2023 (+1.4%, YoY) is not sufficient compared to the increase in corporate profits, and there is much room for reconsideration of cash allocations.
• In Japan, where many manufacturers keep CapEx within the depreciation, it’s more important to verify whether shareholder return is appropriate on a cash basis rather than a net income basis.
• Companies that fail to formulate measures to generate ROE that exceeds the cost of capital in accordance with TSE requests are not able to achieve an appropriate cash allocation.

• Alibaba Pictures (1060 HK) is expanding rapidly into complimentary areas such as online ticketing of cinema and live events with the recent acquisition of  Damai.cn from parent Alibaba.
• Alibaba Group Holding (9988 HK) is considering injecting other media platform assets like Youku  to realize synergies among its portfolio of companies.
• Ali Pictures (Alipics) legacy film production business continues to expand globally with its American film production company, Amblin which is a partnership with Steven Spielberg.

• Meituan reported C4Q23 revenue beat our estimate/consensus by 0.7%/1.4%; operating profit beat our estimate/consensus by 37.3%/48.6%, mainly due to order volume surprise, which is unsustainable in our view.
• However, we think Meituan’s near term pressures did not change: (1) core biz OPM drop due to rising low-price orders and subsidies; (2) resuming competition from Eleme/Douyin/PDD
• We maintain the stock as SELL rating but raise TP by HK$13 to HK$70 to factor in the loss cutting commitment in the community group buying biz.

• Hana Tour Service (039130 KS), the number one travel platform in Korea,  announced that IMM PE (controlling shareholder of the company) is planning to sell its controlling stake. 
• The total stake in the company that is up for sale could rise to 27.78%, including stakes held by Hana Tour founder Park Sang-hwan and co-founder Kwon Hee-seok. 
• Potential buyers of the controlling stake in Hana Tour include Yanolja, Hotels.com, Booking.com, and Trip.com.

• Net debt improved by around €1 billion to c. €5.8 billion. Prioritising deleveraging and allocations to new venture investments over dividends seem to have a negative impact on valuation.
• Porsche SE is viewed as a holding company of Volkswagen Group, which should warrant a discount of 15%-25% on the stock, instead of the massive 44.6% discount to NAV.
• Assuming a typical company holding discount of 15-25% range, the current share price indicates Porsche SE is liable for the whole c. €6.5 billion legal claims.

• This is our first report on recreation products manufacturer, Brunswick Corporation.
• Despite market headwinds, the company reports another successful year, claiming to have accomplished the second highest sales and adjusted earnings per share in its existence.
• In particular, Brunswick stresses the progress of its strategic initiatives, continued market share increases, cost control, the launch of new products, and an enhancement in operational efficiency.

• It seems like every week, Bloomberg reports a HK-listed company weighing privatisation options. HKBN (1310 HK), ESR (1821 HK), and Samsonite (1910 HK) have all been rumoured of late.
• Last Friday, Samsonite announced it was focused on pursuing the listing of its shares on a second exchange.
• No preferred exchange was mentioned. Nor whether the goal is to secure a dual primary listing, or a secondary listing. A buyout, for now, appears to be on the backburner.

• It’s time to revisit the network of Alibaba’s ( Alibaba Group Holding (9988 HK) ) affiliated listed companies for near term investment opportunities
• After investing in an ecosystem of online and offline companies over the last 10 years, Alibaba is rapidly restructuring its businesses to refocus on its most profitable opportunities
• Sun Art Retail (6808 HK) will benefit from the synergies of Baba’s restructuring

• Total revenue grew by 22.6% YoY in 4Q23, three percentage points higher than we expected.
• MT’s operating profit broke even for the fiscal year 2023.
• We conclude an upside of 113% and a price target of HK$188. 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.
• I currently see 5 ADDs and 5 DELs but there are several names close to the border and expectations could change before the base date as prices move around.
• The estimate for one-way flow in June 2024 is US$1.22bn.

• You know it’s bad when Tesla’s delivery trends blow through even my lowest estimates, which already had trailed market projections.
• With no help from the hapless CyberTruck which, not surprisingly, continues to shoot Tesla in the foot.
• See my latest Q1 and full-year estimates—which still prove to be too high.

• Fund Manager Positioning In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.
• Investors have been underweight commodities now for the past 4 months (longest underweight streak since Aug’19) Compared to the past 20-year z-score, fund managers remain heavily underweight in commodities and even more in energy.
• In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.

• United Arrows (7606 JP) is an industry leader in operating clothing select shops in Japan, and is the eighth largest apparel company in the country in terms of sales value.
• In FY03/23, United Arrows reported revenue of JPY130.1bn, operating profit of JPY6.4bn, recurring profit of JPY6.9bn, and net income attributable to owners of the parent of JPY4.3bn
• In May 2023, the company announced its long-term vision ending in FY03/33 and medium-term management plan ending in FY03/26 as the first step.

Meituan has released FY 2023 numbers that were excellent in our view, with significantly improved profitability and solid cash generation. The financial risk profile has strengthened further, with a large and growing net cash position coupled with robust leverage and coverage ratios. Liquidity is sound. We expect FY 2024 to be a better year for the company.

We revise our Credit Bias on Meituan to “Positive” from “Stable”, given the material increase in profitability and strong cash-flow generation following the pandemic. That said, we do not expect ratings upgrades in the near future.

• We are reiterating our Buy rating, $10 price target and projections for Vera Bradley after visiting stores in Connecticut and Long Island.
• We believe, as we near the launch of management’s full vision for Vera Bradley in July, both the outlets and main line locations increasingly reflect what is being added and what will be discarded in the shift.
• As such, we are seeing less inventory, especially in the outlet stores, flow in; further, there is an increasing emphasis on core categories, especially handbags, totes and luggage.

• We are reiterating our Buy rating and $0.25 price target for Starco Brands with the company announcing 4Q23 (December) results after the close on Monday.
• We believe 2024, with a full compliment of unique, value-added brands which leverage Starco’s aerosol and marketing infrastructure in hand, and a laser focus on adding key categories and new relationships, is shaping up as another year of material progress for Starco.
• We believe there are also continued margin expansion opportunities from both economies of scale and the company’s manufacturing expertise.

• ZOZO Inc (3092 JP) is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.
• All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. 
• Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.

• Concerns around slowdown in growth are behind the disconnect between PDD’s stellar 4Q23 results and lackluster share performance, in our view.
• We have seen this before. If history is a guide, its valuation will improve after growth hits bottom in 1Q24.
• We expect PDD to deliver 50% plus growth for 2024 and generate US$14 billion adjusted net profit. Reiterate US$240 billion target market cap or 50% upside.

• Fu Shou Yuan (1448 HK)‘s net profit grew 20.1% in FY23; and if not a withholding tax of Rmb87.4m, its net profit would have increased by over 30%.  
• Including a special DPS of HK$0.2139, full-year payout ratio reached 98.5%. Still, it has net cash of Rmb2.7bn or 24% of its market capitalisation.
• Profitability outlook is encouraging – structural demand increase, higher ASP, and well-contained costs. Its land reserve is enough to be consumed for 82 years.

• PDD reported C4Q23 top-line, non-GAAP EBIT, and non-GAAP net income (2.4%), 12.4%, and 24% vs. our est., and 11.6%, 37.0%, and 50.3% vs. cons., respectively;
• We estimate the beat was driven by (1) improved take rate on the China platform following ad tool adjustments, and (2) Temu margin expansion;
• We remove Temu US from our model from 2025+, as restrictions seem more than likely following the TikTok ban and cut TP to US$ 159 to reflect this;

• The trade of being short Fast Retailing (9983 JP) vs Nikkei 225 or Sector Basket is fundamentally slightly short Nikkei 225 froth.
• Giordano (709 HK)‘s SGM will likely pivot off how the shareholders under Halcyon Securities vote. Digging a little deeper as to who these shareholders are, provides some (not-altogether) surprising results.
• AZ-Com Maruwa Holdings (9090 JP) intends to launch a Tender Offer on Chilled & Frozen Logistics Holdings (9099 JP) without having contacted C&F first. A HOSTILE deal. Yum!

• Companies with the highest Disclosure in English scores have the highest ROE, Tobin’s Q, Market Capitalization, and Foreign Shareholder Ratio, while companies with the lowest scores have the lowest values.
• Companies with the highest Disclosure in English scores also show generally higher Board Practices and Key Actions. Both Disclosure in English and these practices are the result of engagement efforts.
• If Disclosure in English and corporate governance efforts are advanced through engagement, it can be hypothesized that profitability will also increase through engagement with overseas investors.

• GoTo Gojek Tokopedia (GOTO IJ) 4Q2023 results revealed another sequential increase in GTV and positive adjusted EBITDA for both ODS and e-commerce, despite reduced incentive and marketing spending.
• GoTo achieved positive top-line growth by expanding its total addressable market through more affordable products and a strong performance from consumer lending in fintech, coupled with great cash cost efficiencies.
• 2024 will be a transformational year for GoTo without the yoke of Tokopedia promotional spending but with significant cash coming in every quarter that can be used to drive growth.

• Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world’s largest auto market.
• The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31.
• Tesla previously announced a price increase of $1,000 for the Model Y in the United States and 2,000 euros ($2,542) in Europe.

• BLD offers comprehensive services for roofing, including material selection, expert installation, and post-installation service.
• They are known for their focus on high-quality materials, professional installation, and exceptional customer service.
• BLD has established itself as a leader in the industry, serving both residential and commercial markets with a commitment to meeting the evolving needs of the construction industry.

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 22 March, the Korea Exchange announced special changes to KOSDAQ 150. CanariaBio will be excluded from KOSDAQ 150 and it will be replaced by C&C International.
• Canaria Bio was designated as “administrative issue” and “investment attention issue” on 22 March 2024, which resulted in KRX deciding to remove this stock from KOSDAQ 150 on 26 March.
• We believe that this inclusion of C&C International in KOSDAQ 150 is likely to further positively impact its share price.

Games Workshop Group has reported that trading for the three months to the end of February 2024 is in line with expectations. The fourth dividend of the year has been declared at 105p/share, which takes the year-to-date total to 420p/share, marginally ahead of the 415p/share declared in FY23 at a similar stage. The declared dividend compares with our prior estimate of 425p/share, and we have therefore nudged our estimate down to be consistent with the amounts declared.

• This is our first report on automotive retailer, Lithia Motors.
• The company had a strong Q4 2023, with revenues growing by 11% from last year to reach $7.7 billion.
• The company’s revenue increase was primarily driven by robust new vehicle sales, with same-store units increasing by 10% and aftersales revenues growing by 3%.

• This is our first report on dining restaurant chain, Texas Roadhouse Inc.
• The year 2023 proved to be a successful year for the company.
• Texas Roadhouse generated over $4.6 billion in revenue and saw an increase in average unit volumes to more than $7.6 million.

• According to the Q4 2023 earnings of Archer-Daniels-Midland Company (ADM), the company reported adjusted earnings per share (EPS) of $1.36 for the quarter.
• For the fiscal year, the company reported adjusted EPS of $6.98.
• The firm had an adjusted Return on Invested Capital (ROIC) of 12.2%.

• In its latest earnings, Williams-Sonoma, Inc.
• recorded a performance marked by both successes and challenges.
• In Q4, the company saw a -6.8% comp, -7.4% in the 2-year comp, and a +29.1% in the 4-year comp.

• This is our first report on DICK’S Sporting Goods.
• The leading sports goods and outdoor retailer is significant in its sales growth, paired with its impressive development project, House of Sport.
• Full year sales reached $13 billion, marking a notable increase in market share.

• The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
• This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
• The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 

• PepsiCo is a global company with significant presence in both snacks and beverages, generating around $80 billion in revenue
• Despite the impact of COVID-19 on its business, PepsiCo has maintained strong performance
• The company’s Beverages North America segment contributes a third of sales but only 22% of EBIT, while Frito Lay North America accounts for 25% of sales but 50% of EBIT

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.

• In the past, value traps were macro environment that couldn’t generate profits in deflationary economy, and micro problem of managers who didn’t listen to constructive management improvement proposals from investors.
• The introduction of Stewardship Code and Corporate Governance Code, and TSE’s request for change in awareness of companies, has reduced the risk of activist investors’ investment strategies flailing around in vain.
• Management awareness has just begun to change, and few companies generate intrinsic value, as evidenced by the fact that ROE hasn’t begun to improve. Activist investors will continue taking interest.

• Nippon Suisan Kaisha (1332 JP) reported 8% YoY revenue growth in 9MFY23, driven by 17% YoY growth in food products business on higher commercial volume and prices.
• However, marine products profits tumbled 39% YoY on weakening fish prices and accounting adjustments.
• The company raised FY23 sales and operating profit guidance to ¥825B (up 7% YoY) and ¥29B (up 18% YoY), respectively.

• Xponential Fitness has shown strong financial performance post IPO, with adjusted EBITDA increasing significantly
• The company faced a coordinated short attack leading to a major drop in share price in 2023
• Shares are currently undervalued with strong growth potential and valuable assets, making it an attractive investment opportunity

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.

• We are reiterating our Buy rating on GES, raising our price target to $37 (from $32.50) and rolling out FY26 projections after Guess?
• ended FY24 with a strong 4Q which easily beat both top and bottom line Street expectations and announced a $2.25 per share special dividend.
• Further, initial FY25 projections, which incorporate the acquisition of Rag & Bone, handily beat Street top line projections and bracket bottom line expectations, even as Guess?

• WK Kellogg is a consumer staple company with low risk and attractive valuation
• Recent spin-off has unlocked self-help opportunities for potential upside for patient shareholders
• Projections show EBITDA margin growth, significant upside in sales growth and free cash flow, with focus on cereal brands and achieving mid-teens EBITDA margins by end of 2026, projected 100-250% total upside over three years.

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.

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.

• Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
• But there may be ¥1.0-1.2trln+ to buy on one day into the close later this month, then ad hoc buys of ¥630bn and index sells of ~¥600bn  2 days later.
• Over the past ten years, the two day return on the March trade is great. This year the Nikkei funding trade makes things more complicated. 

• Last month, a Cheng family vehicle with 24.06% of Giordano (709 HK), requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus three other NEDs/INEDs.
• That SGM will be held on the 3rd April. The director resolutions – both the removal and appointments – are “ordinary”, requiring a simple majority vote. 
• The outcome will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these shareholders are, with some surprising results.  

• Trial Holdings (5882 JP) priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.
• We previously discussed the IPO in Trial Holdings IPO: The Investment Case and Trial Holdings IPO: Valuation Thoughts. 
• The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive. 

• Xtep International (1368 HK) announced in-line 2023 results, with net profit up 12% yoy and sales up 11% yoy.  2024 outlook was also satisfactory. 
• The company paid out 50% of its earnings in dividend, which amounted to a 5% dividend yield at current share price of HKD5.04.
• The company is currently trading at 10x 2024 PE (assuming a conservative 10% net profit growth in 2024).

• Both advertising revenue and commission revenue grew dramatically in 4Q23.
• Chinese consumers are seeking low price goods, after the economy went weak.
• PDD’s overseas brand, TEMU, is expanding rapidly in the U.S.

• Carote Ltd (CARO HK) is looking to raise around US$150m in its upcoming Hong Kong IPO. The bookrunners on the deal are BNP Paribas, and CMB International.
• Carote is a distributor of kitchenware products. Expanding its lineup of products, the firm aims to meet its customers’ varied kitchen scenarios and enhance their culinary experience.
• Initially engaged to provide original equipment manufacturing (OEM) overseas, the firm has since ventured into the online retail sector, introducing kitchenware products under its own brand name “CAROTE”.

• In Q3FY24, Maruti Suzuki India (MSIL IN) reported revenue of INR 335Bn, a growth of 14.6% YoY on the back of higher realization and volume.
• EBITDA margin expanded 210bps YoY to 12.3% as higher volume, favorable commodity price played a role in tandem.
• The company is planning 2x increase in its annual production capacity to about 4Mn by 2030-31. Capacity expansion plans augur well for the company in medium to long term.

• GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 4Q2023 results yesterday which shows that the company’s profitability has significantly improved.
• The improvement in profitability has come at the cost of growth which has continued to decline suggesting profits may not be sustained.
• GoTo announced that it has completed the Tokopedia partnership deal with TikTok and also a plan to buyback shares, subject to regulatory/shareholder approval.

• Mixue Group is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
• In our earlier notes, we have looked at the past performance and undertaken a peer comparison. In this note, we provide our initial thoughts on valuation.

• This is our first report on Tempur Sealy International Inc., a global bedding company.
• The company released its Q4 2023 earnings recently.
• The company emphasized its strong business model, highlighting significant cash flow and a robust balance sheet.