Consumer

• Since the US$1.1 billion secondary placement announcement, Aisin (7259 JP)’s shares are up 2.5% from the undisturbed price of JPY5,243 per share (27 June).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Aisin’s shares have deviated from the pattern of previous large placements.
• The offering will likely be priced on 8 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• SHEIN’s fast-fashion apparel is set to hit India through Reliance Retail’s platforms, marking a major comeback after the 2020 ban.
• This partnership could be a win-win, tapping into India’s booming fashion demand and offering Shein access to the world’s largest youth market, ahead of its proposed IPO.
• With Shein’s affordable styles and Reliance’s extensive network, this alliance targets the youth market, challenging brands like Tata Group’s Trent Ltd (TRENT IN) owned Zudio.

• Tesla delivered 443,956 vehicles in Q2 with production of 410,831 vehicles. It deployed a quarterly record of 9.4 GW hours of battery storage, its best quarter ever.
• Tesla delivered 443,956 vehicles in Q2 with production of 410,831 vehicles. It deployed a quarterly record of 9.4 GW hours of battery storage, its best quarter ever.
• Future remains uncertain for Tesla and its investors. Tesla shares are pricing in the launch of a lower priced model and Tesla’s Robotaxi on 8/8.

• Sales rose JPY1.5bn YoY (+2.9% YoY) to JPY51.4bn, driven by higher sales in domestic and overseas apparel businesses.
• Operating profit decreased JPY306mn YoY (-5.7% YoY) to JPY5.1bn due to a decline in domestic profit and wider overseas losses.
• Full-year forecasts revised for recurring profit and net income attributable to owners of the parent, reflecting better-than-expected affiliate performance.

• If a company hasn’t improved its return such as ROE, it’s difficult to buy its shares until the plan is more certain that cash flow will expand in the future.
• Since cash flow margin must be raised to increase cash flow, the ultimate goal is to achieve sales growth while raising the profit margin on sales.
• Cutting costs alone isn’t enough; cash must be used for investments that will lead to future growth, so cash must be used for growth investments as well as stock repurchases.

• Signet Jewelers delivered a performance that aligns with its guidance amidst a challenging retail environmen characterized by macroeconomic pressures and heightened discount activities in the jewelry sector.
• The company reported $1.5 billion in sales and $58 million in adjusted operating income, which falls within the upper half of its guidance range.
• The quarter saw a sluggish start but improved significantly with late Valentine’s Day shopping and further momentum through March and April.

• Meritage Homes commenced the year with a remarkable first quarter in 2024, demonstrating both strong execution and a robust demand environment, yet facing challenges due to the unpredictability of interest rates and increased land and material costs.
• On the performance front, Meritage Homes reported substantial gains, with first-quarter sales orders hitting a record 3,991 homes, reflecting a 14% year-over-year increase.
• This noteworthy jump was primarily driven by healthy spring sales, an 8% cancellation rate, and robust demand across all regions, particularly from entry-level homebuyers who make up more than 90% of the order volume.

• J&J Snack Foods recently reported fiscal results for the second quarter of 2024 and showcased a promising outcome, marked by significant sales and profit growth.
• The company’s strategy and operational efficiencies appear to be paying off, with net sales reaching $357 million, an increase of 6.5% compared to the prior year.
• This results from a combination of higher volumes, new business performance, and continued robust sales in major segments like Foodservice and Retail.

• Under Armour, the prominent athletic performance brand, reported their Q4 2024 earnings.
• While the brand maintains a strong foundation and reputation amongst consumers, recent changes in leadership and the COVID 19 pandemic have presented challenges to the company’s operations, including increased competition and changes in consumer shopping behavior.
• The company expressed a commitment to improvement by prioritizing clarity and stability amid rapid executive team changes and industry shifts.

• We are reiterating our Buy rating and $22.50 price target and slightly back-end loading our 2024 projections after reviewing the July catalog and recent foreign exchange swings between the Mexican Peso and USD.
• July continued to demonstrate normalizing trends in the Betterware catalog, with SKU levels up YoY and discounting remaining down, as the division begins to compare against more normalized results from the prior year, as supply chains reset at more historic levels.
• That said, overall pricing power remains somewhat constrained, as YoY pricing dropped 8.4%, the sixth drop, and deepest decline, this year.

• Just pre-close on 2 July, Reuters carried an article suggesting a ¥500bn secondary offering in Honda Motor (7267 JP) as insurers sold. The stock fell 4% in minutes. 
• Honda semi-confirmed but it took two days to get to the details, now out. The stock climbed in the meantime. 
• At launch, this deal is two-thirds covered by buyback + passive demand but the supply is heavily-weighted to retail. Cheaper than it looks, lots of moving parts. Read the details!

• Small cap Japanese manufacturer and purveyor of apparel Daidoh Ltd (3205 JP) has consistently been a target for value investors. In late 2022, Strategic Capital went over 5%.
• They have bought more, and as of end-March, they declared 24.85% of TSO (28% of voting rights), but they have 33%. They made proposals for the AGM. They won one. 
• Now Murakami-san has bought in, going over 5%. This gets interesting. Together they have 39.4% as of last week, and probably more now. That should get them 50+% next AGM/EGM.

• Honda Motor (7267 JP) has announced a secondary offering of up to 298.9 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY535 billion (US$3.3 million).
• The offering is another sign that the unwinding of cross-shareholdings is catching pace as part of Japan’s corporate governance reforms.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 17 and 22 July (likely 17 July).

• A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP) .
• The possibility of such a selldown was flagged earlier in the week by Reuters. Thus, the deal is well flagged.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Dollar has 15% market share in the Indian hosiery space with 2,000 products
• Strategically expanding the Distribution network by targeting specific areas with Lakshya   
• Integrated value chain from Spinning to stitching to marketing and distribution

• 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).
• We have covered the background of the deal in our earlier note, Aisin Corp Placement – US$1.1bn Selldown by Toyota and DENSO.
• In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.

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

• Road King Infrastructure
• Samvardhana Motherson International Ltd
• Vedanta Resources

• Strong candidate for shorting in the short-run, potential to miss revenue consensus by 4-5ppt in Q1 2024
• Recommendation to short LULU US when share price is above USD410, price target of USD300 before next earnings date in May 2024
• Lululemon is a leading brand in women’s indoor training and yoga, overvalued and likely to see a decline in share price

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.

• Arcos Dorados Holdings Inc. recently discussed its financial performance for the first quarter of 2024, highlighting both favorable outcomes and challenges that depict a mixed fiscal environment.
• The company, a major player in the fast-food industry in Latin America and the Caribbean, operates primarily under the McDonald’s brand, holding exclusive rights to own, operate, and grant franchises in 20 countries.
• 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.

• D’Ieteren Group plans to unlock value through an IPO of its majority-controlled subsidiary, Belron
• Belron is a leader in the global auto glass and repair industry with strong market shares and impressive operating margins
• Appointment of Carlos Brito as CEO signals focus on international expansion and recent investments value Belron at €17.5Bn, offering upside potential for D’Ieteren shareholders

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.

• Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
• Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. 
• Of these, they have a combined stake of over US$1bn in 23 companies.

• The reason why investor engagement is effective is in the exercise of voting rights. Engagement is considered to have been effective around 2014, when foreign ownership exceeded 30%.
• Engagement is generally effective in the funds entrusted to GPIF, according to the results of the study. GPIF should raise fees to allow investment managers to engage in fruitful engagement.
• This tends to be a generic question for passive funds. If we expect engagement to be more effective in the future, we need to increase the number of active funds.

• Cirrus Aircraft (0153126D US) seeks to raise up to US$197m in its Hong Kong IPO.
• Cirrus Aircraft designs, develops, manufactures, and sells premium aircrafts. Its two aircraft product lines, the SR2X Series and the Vision Jet, are currently certified and validated in over 60 countries.
• In our previous notes, we talked about the company’s historical performance and PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

• On 2 July, Paradise Co Ltd (034230 KS) announced that it will construct a new high end luxury hotel in Seoul spending about 500 billion won to 550 billion won. 
• We believe that this construction of the new luxury hotel will have a negative impact on shares of Paradise. 
• Rather than investing a large sum of money to build a new hotel, many investors would rather have preferred Paradise to increase share buybacks and dividends. 

• Thai Beverage (THBEV SP) is proposing to take 64.67%-held Sermsuk PCL (SSC TB)  private by way of a voluntary Delisting Offer.
• The Offer price is THB 63/share, a 27.9% premium to last close.
• This Delisting Offer requires a Scheme-like shareholder vote. Payment may occur late 4Q24. This is an illiquid arb.

• Allied Blenders & Distillers‘ recent IPO spotlighted India’s alcoholic beverage sector, which bucks global trends with strong volume and value growth.
• India is the third largest alcoholic beverage market globally, and the second largest for spirits. It is projected to grow at a CAGR of more than 10% over the near-term.
• Incumbent players in this highly regulated sector can benefit from strong market moats and evolving growth opportunities if they can effectively navigate the highly regulated business  environment.

• Newell Brands displayed a strong performance in its first quarter of 2024, reflecting continued progress in its strategic turnaround efforts.
• The company reported improvements across multiple metrics, including gross margin, operational efficiency, and core sales despite a challenging external environment.
• Moreover, Newell Brands maintained its full-year outlook and highlighted ongoing focus on operational excellence and innovation.

• Capri Holdings Limited recently reported its financial performance for the fourth quarter and full fiscal year of 2023.
• Despite facing numerous challenges, including an uncertain macroeconomic environment and specific difficulties in the Americas, the company managed to achieve high single-digit revenue growth and mid-single digit growth in earnings per share on a 52-week constant currency basis.
• However, these figures fell short of the company’s initial expectations.

• The Simply Good Foods Company reported its fiscal third-quarter results for 2024, reflecting a combination of growth and investment strategies aimed at harnessing both immediate gains and longer-term opportunities.
• The company’s results were favorable, with a reported net sales increase of 3.1% to $334.8 million, driven primarily by Quest’s volume growth.
• Notably, retail takeaway across measured and unmeasured channels outpaced net sales growth, reaching approximately 5%.

• Nomad Foods, a prominent player in the frozen foods industry, experienced a mixed first quarter in 2024, balancing resilience in certain metrics with notable challenges typical of the consumer goods sector amidst a complex economic landscape.
• The company reported a slight net sales increase of 1.1% and organic sales growth of 0.3%, aided by favorable foreign exchange rates.
• Impressively, Nomad Foods has maintained positive organic sales growth for seven consecutive quarters.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

• Health And Happiness (H&H)

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

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

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

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

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

Key points

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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