Category

Consumer

Daily Brief Consumer: PDD Holdings, Hyundai Motor India , Alibaba Group Holding , Nitori Holdings, Vera Bradley, Minerva /Brazil, Minth Group Ltd and more

By | Consumer, Daily Briefs

In today’s briefing:

  • PDD (PDD US): Stock Plunged After Excellent 2Q24 Result – Your Time to Buy
  • Hyundai Motor India IPO Valuation Analysis
  • Technically Speaking, Breakouts and Breakdowns: HONG KONG (AUGUST 24)
  • Nitori (9843.T) – Headwinds to Tailwinds -Cleaning House
  • VRA: Snapping the Store: Shocking the System; Reiterate Buy, PT
  • Minerva: Balancing an Interesting Credit Story with Acquisition Risks
  • Minth (425): Battery Housing as New Growth Driver


PDD (PDD US): Stock Plunged After Excellent 2Q24 Result – Your Time to Buy

By Ming Lu

  • The stock plunged today after the announcement of excellent performance for 2Q24.
  • In 2Q24, revenue grew by 86% YoY and the operating margin improved 10 percentage points YoY.
  • We believe investors should buy, as it is just a tactic from major stock sellers.

Hyundai Motor India IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Hyundai Motor India is market cap of US$18.6 billion, based on P/E of 24.4x our estimated net profit of 64.1 billion INR in FY25. 
  • There have been some increasing concerns about Hyundai Motor India paying out higher royalty to its parent Hyundai Motor and dividend to shareholders, which could lower profit.
  • According to a recent article by livemint, the expected valuation of Hyundai Motor India has fallen to about USD16 billion to USD20 billion.

Technically Speaking, Breakouts and Breakdowns: HONG KONG (AUGUST 24)

By David Mudd

  • Hong Kong’s unusual trading channel pattern may be coming to an end and short selling declines.
  • Alibaba Group Holding (9988 HK) broke a falling triangle pattern and now trades above near term support levels.  The company’s dual listing announcement and large buyback program are near-term positives.
  • GDS Holdings (9698 HK) has broken out of its rounding bottom pattern with a positive earnings announcement.  China Ruyi Holdings (136 HK) has broken out from its triangle pattern.

Nitori (9843.T) – Headwinds to Tailwinds -Cleaning House

By Rikki Malik

  • A Strong JPY beneficiary as the company imports >80% of its products
  • Profits have been rising despite the weakness  of the Japanese Yen 
  • Redesigning product portfolio to be profitable at much weaker yen levels

VRA: Snapping the Store: Shocking the System; Reiterate Buy, PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, $10 price target and projections as we review our mail line store visits for August.
  • August represents the first monthly store tours where the main line stores have their full compliment of fixtures and products to represent the launch of their New Day (which was July 11th); further, unlike the outlet stores (which completed their New Day conversion on August 22nd), the change for the main line locations was a complete product reset, a true “shock to the system,” positioning Vera Bradley on a new course with a wider offering of fabrics, a materially easier to shop store, an emphasis on handbags, complete leather collections and even new logos.
  • While we view these changes as longer term positives which position Vera Bradley for a new generation of shoppers, we do acknowledge that, like any shock, the near term impacts can be messy as the prior core shopper adjust and new shoppers slowly shift their views on Vera Bradley.

Minerva: Balancing an Interesting Credit Story with Acquisition Risks

By Leandro Gubler

  • We are initiating coverage on Minerva with an Underperform recommendation.
  • We are cautious about the credit impact of the Marfrig acquisition.
  • We believe a better entry point into the name may emerge in the future based on our expectation of a weakening credit profile. 

Minth (425): Battery Housing as New Growth Driver

By Henry Soediarko

  • Minth Group Ltd (425 HK) revenue went up by 14% (almost 3x of China’s passenger vehicle market, which grew 5%) and net income by 20% on 1H 24
  • It has developed environmentally friendly collision aluminum, with a carbon emission of less than 2.5 kg CO2 /Kg.AL while typically it produces 16 CO2/kg.AL
  • Battery housing business contributed 21% instead of 18% of total revenue with OPM expanded from 18% to 20%. 

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Daily Brief Consumer: Zomato, S&T Motiv, Yamaha Motor, Kering, Prosus NV, Yadea Group Holdings, Alibaba Group Holding , China Resources Beer Holdings, JD.com Inc (ADR), TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Zomato: Index Inclusions & Passive Impact (Once Added to F&O)
  • KRX Sector Indexes’ Rebalancing Event, Often off Traders’ Radar but with Significant Price Impacts
  • Yamaha Motors (7272 JP) – Secondary Offering as Toyota Sells Down – Easy To Digest
  • EURO STOXX 50: Kering Out of Fashion with $750M Deletion. DSM-Firmenich In with $1.3B Addition.
  • Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum
  • Yadea (1585): Ready for New Standard
  • China Consumption Weekly (26Aug2024): 2Q24 Rev Up By – PopMart 62%, Zeekr 58%, Tongcheng 48%, Etc.
  • Consumer Tales Aug Wk#4: Beer in China, Ola’s Path to Profits, Kalyan Jewellers’ Quiet Confidence
  • ECM Weekly (26th Aug 2024) – Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing
  • Issues Related to Outside Director Compensation Are Plentiful


Zomato: Index Inclusions & Passive Impact (Once Added to F&O)

By Brian Freitas


KRX Sector Indexes’ Rebalancing Event, Often off Traders’ Radar but with Significant Price Impacts

By Sanghyun Park

  • Early position buildup has minimal price impact, and even after the announcement, only a few stocks with a larger passive impact see significant movement.
  • Since these KRX sector indices include many small to mid-cap stocks, the price impact of constituent changes on ETF rebalancing day was quite noticeable.
  • Due to potential learning effects, build positions in predictable high-impact stocks before the announcement, then monitor flows and impacts to decide on targeting the ETF rebalancing trading day.

Yamaha Motors (7272 JP) – Secondary Offering as Toyota Sells Down – Easy To Digest

By Travis Lundy

  • On Firday 23 August, Yamaha Motor (7272 JP) announced that three cross-holders would sell about 4.6% of the shares out in a secondary sale. 
  • MS&AD was expected. Toyota was probably expected. Yamaha Corp is a bit of a surprise. But it also frees up Yamaha Motor to sell down cross-holdings (top 2 are Toyota/Yamaha).
  • Given the price/guidance/dividend yield and limited size, this should be quite easy to place.

EURO STOXX 50: Kering Out of Fashion with $750M Deletion. DSM-Firmenich In with $1.3B Addition.

By Dimitris Ioannidis


Naspers X Prosus Discount Update Post Tencent 2Q FY24 Results, Narrowing Gains Momentum

By Charlotte van Tiddens, CFA

  • Tencent reported a softer set of results for Q2 relative to Q1. Revenue for the quarter was up 1% QoQ and 8% YoY.
  • Since our last discount update mid-August, the discounts of both Naspers and Prosus have continued to narrow.
  • Naspers’ discount is trading well off the lows reached at the end of July (~45%). 

Yadea (1585): Ready for New Standard

By Henry Soediarko

  • The 1H result was poor due to the inventory clearance from the new product standards, which rendered older products less desirable. 
  • Management has proven to be able to manage costs carefully during a down cycle. 
  • Yadea Group Holdings (1585 HK) used to trade around 35x PER; now it is only 10x PER. 

China Consumption Weekly (26Aug2024): 2Q24 Rev Up By – PopMart 62%, Zeekr 58%, Tongcheng 48%, Etc.

By Ming Lu

  • Pop Mart’s total revenue increased by 62% YoY due to the promising overseas market.
  • Tongcheng’ revenue grew by 48% YoY in 2Q24, as new businesses are successful.
  • Alibaba’s Freshippo plans to set up frontline warehouses, which is a way back to online.

Consumer Tales Aug Wk#4: Beer in China, Ola’s Path to Profits, Kalyan Jewellers’ Quiet Confidence

By Devi Subhakesan

  • Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
  • With fewer young people and a growing number of older adults, the target market for alcoholic beverages is shrinking in many markets including China.
  • Upsides from vertical integration could give Ola Electric (OLAELEC IN) a significant cost advantage over local competitors. Strong pricing power can allow it to decide whether to prioritize growth or margins.

ECM Weekly (26th Aug 2024) – Zomato, Colowide, Star Asia, Yamaha, 99Speed, Hero Fin, Bajaj Housing

By Sumeet Singh

  • 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 a number of upcoming listings in India.
  • There was a revival in placement flows during the week, after a lull over the past few weeks.

Issues Related to Outside Director Compensation Are Plentiful

By Aki Matsumoto

  • A few companies have stock compensation plans for outside directors, but their common features are a majority of outside directors on the board and a high percentage of foreign ownership.
  • 8 million compensation for an outside director would be too low to devote much of his/her time to that company. Consequently, 17.5% of all outside board members serve multiple companies.
  • The need to raise the ratio of female board members amid the low percentage of women in managerial positions has increased the concurrent positions of female board members.

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Daily Brief Consumer: Vector, Seven & I Holdings, Trent Ltd, Lowe’s Companies Inc, Tapestry Inc, Tencent Music, Walmart, Alibaba Group Holding , Yamaha Motor and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Japan Tobacco/Vector Group: Possible Bump-Up?
  • Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack
  • NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree
  • Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow
  • Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers
  • Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers
  • Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers
  • Walmart Inc.: How Are They Dealing The Challenges of Sustaining e-Commerce Profitability Amid AI Integration! – Major Drivers
  • Alibaba Group: A Blend of Growth
  • Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind


Japan Tobacco/Vector Group: Possible Bump-Up?

By Jesus Rodriguez Aguilar

  • JT plans to acquire 100% of Vector Group at $15.00/share, a 29.9% premium. The offer requires over 50% acceptance, with Board support and completion expected by late 2024, pending approvals.
  • The shares go ex-dividend on August 30, with payment on September 12. Adjusted for the dividend, shares trade at a -0.4% gross spread. My fair value estimated is $15.92/share.
  • Consensus sets a target price of $16/share. JT may consider raising its offer to this level (6.67%), especially if they see Vector as a strong long-term investment.

Weekly Deals Digest (25 Aug) – Seven & I, Iriso, Fancl, Alps Logistics, China TCM, Henlius, GA Pack

By Arun George


NIFTY50 Index Rebalance: Trent, BEL to Replace Divi’s Lab, LTIMindtree

By Brian Freitas


Last Week in Event SPACE: Seven & I Holdings, Webjet, Hanwha Group, Swire Pac/Props, EOFlow

By David Blennerhassett

  • Alimentation Couche-Tard has returned to the well with a NBIO for 7&I (3382 JP). This’ll be anathema to politicians who view 7&i as a local champion AND a lifeline entity.
  • Global travel outfit Webjet Ltd (WEB AU) has announced the separation of its two key divisions. The sum of the part is greater than the whole? I’ll take that bet.
  • The Kim family turn their focus to Hanwha Galleria (452260 KS) in the latest Partial Offer within the Hanwha Group complex. 

Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers

By Baptista Research

  • Lowe’s Companies’ second quarter 2024 earnings outlined a mixed performance amid challenging market conditions, reflecting both the strengths and weaknesses of its current business strategy.
  • The company reported Q2 sales of $23.6 billion, with comparable sales down by 5.1%.
  • This decline was attributed to a decrease in demand for Do-It-Yourself (DIY) projects, partially mitigated by solid performance in the Professional (Pro) segment and a growth in online sales.

Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers

By Baptista Research

  • Tapestry, Inc. reported its fourth quarter earnings where it demonstrated notable strengths internationally with a 6% growth led by significant contributions from various regions including Europe, Other Asia, and Japan.
  • However, modest revenue declines in North America, coupled with more challenging conditions in Greater China, posed challenges in otherwise robust financial outcomes.
  • Revenue in Greater China grew by 3% overall for the year but showcased declines in the latter half.

Tencent Music Entertainment Group: Innovation In Subscription & User Experience & Other Major Drivers

By Baptista Research

  • Tencent Music Entertainment (TME) demonstrated a strong performance in the second quarter of 2024, anchored by significant growth in its online music services and a robust increase in adjusted net profit.
  • The company reported a 28% year-over-year growth in online music services and a 26% increase in adjusted net profit, signaling robust operational health and profitability.
  • The addition of over 10 million music subscribers in the first half of 2024, combined with an increase in average revenue per paying user (ARPPU), underscores the company’s effective market penetration and pricing strategy.

Walmart Inc.: How Are They Dealing The Challenges of Sustaining e-Commerce Profitability Amid AI Integration! – Major Drivers

By Baptista Research

  • Walmart Inc. reported a solid financial performance in its fiscal year 2025 second quarter earnings, displaying robust sales growth and even stronger profit growth which surpassed expectations.
  • The company’s leadership highlighted their dual focus on achieving short-term results and driving significant transformative changes aimed at positioning Walmart for future success.
  • During the quarter, Walmart experienced broad-based strength across multiple divisions.

Alibaba Group: A Blend of Growth

By Baptista Research

  • Alibaba Group’s June Quarter 2024 financial report showcases a blend of growth, challenges, and strategic advancements.
  • The group reported steady growth in its core e-commerce businesses, Taobao and Tmall Group, with an increase in Gross Merchandise Volume (GMV) and order volumes.
  • Particularly, the company’s focus on enhancing user experience and AI-driven strategies appears to be bearing fruit, assuring an upward trajectory in retaining and attracting customers, which is crucial in a competitive e-commerce landscape.

Yamaha Motors Placement – A Relatively Small Cross-Shareholding Unwind

By Sumeet Singh

  • A group of shareholders aims to raise around US$330m via selling around 3.6% of Yamaha Motor (7272 JP).
  • This will be another cross-shareholding unwind and hence, won’t be a huge surprise, although the stock hasn’t been doing particularly well lately.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

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Daily Brief Consumer: Hanwha Galleria , TSE Tokyo Price Index TOPIX, Clorox Company, Philip Morris International, Sadot Group , Vera Bradley and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Examining the Severity of Proration Risk in the Hanwha Galleria Tender Offer
  • Patience Is Often Needed for Small- And Mid-Cap Company Engagements
  • The Clorox Company: A Dive Into Its Market Positioning
  • Philip Morris International’s Smoke-Free Product Growth: IQOS and ZYN Leading the Charge! – Major Drivers
  • SDOT: Sadot Group reports 2nd quarter 2024 financial and operating results and updates investor community on the sale of its restaurant concepts.
  • VRA: Snapping the Store: New Day for the Outlets, Reiterate Buy, $10 PT


Examining the Severity of Proration Risk in the Hanwha Galleria Tender Offer

By Sanghyun Park

  • The Hanwha Galleria tender offer has no cancellation risk but carries proration risk, keeping the spread at around 7%.
  • For Hanwha Galleria, most floating shares are held by retail investors, and the smaller float size compared to Hansol Logistics further reduces proration risk.
  • Even though the actual trading volume might be a concern, it’s still worth thinking about going for an aggressive strategy to take advantage of the spread, which is around 7%.

Patience Is Often Needed for Small- And Mid-Cap Company Engagements

By Aki Matsumoto

  • The speed of management reform in Japanese companies is usually slower than investors and shareholders expect. In case of small- to mid-cap stocks, the speed is much slower.
  • In small-to-mid-cap stocks, foreign ownerships are often lower than the average for listed companies, and older companies are often protected by cross-shareholdings. Therefore, engagement should be prepared for sluggish response.
  • The way to resolve this situation is for the company to break the silent shareholder structure or increase shareholders who can exercise their voting rights based on rational decisions.

The Clorox Company: A Dive Into Its Market Positioning

By Baptista Research

  • The Clorox Company presented its fiscal year 2024 fourth-quarter earnings with a moderate sense of optimism and caution, reflecting a period of recovery and strategic realignment.
  • In a context of considerable operational challenges, including a notable cyberattack which the company has recovered from, Clorox has managed to end the fiscal year on a stable note, achieving flat organic sales year-over-year, marked by a robust recovery in subsequent quarters following an 18% decline in the first quarter due to the cyber incident.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Philip Morris International’s Smoke-Free Product Growth: IQOS and ZYN Leading the Charge! – Major Drivers

By Baptista Research

  • Philip Morris International (PMI) continues to demonstrate strong performance, driven by its ongoing transformation towards a smoke-free future.
  • The company’s recent earnings report highlights its impressive growth, particularly in its smoke-free product segments like IQOS and ZYN, which are gaining significant traction globally.
  • However, PMI faces challenges such as regulatory headwinds, particularly in Europe, and supply chain constraints that could impact its growth trajectory.

SDOT: Sadot Group reports 2nd quarter 2024 financial and operating results and updates investor community on the sale of its restaurant concepts.

By Zacks Small Cap Research

  • In late 2022, the company began its evolution from a consumer-focused, U.S. restaurant business into a global, food-focused organization with two distinct business units.
  • The company’s largest operating unit is Sadot Agri-Foods, which is a vertically integrated international food supply chain company engaged in trading and shipping sustainable food and commodities such as soybeans, wheat and corn.
  • Sadot’s legacy restaurant business is currently in the process of being divested.

VRA: Snapping the Store: New Day for the Outlets, Reiterate Buy, $10 PT

By Small Cap Consumer Research

  • We are reiterating our Buy rating, $10 price target and projections for Vera Bradley after the company completed their New Day relaunch with changes to the outlet store channel yesterday.
  • With outlet locations representing approximately 65% of the company’s stores, the channel is a crucial piece of the company’s business model.
  • Unlike the complete makeover experienced by the company’s main line stores, we view the shifts at the Vera Bradley outlets, which include new signage, launch of faux leather lines, a collection of Disney offerings specifically made for the outlet channel and lesser dependence on apparel, as more evolutionary and, frankly, able to drive stronger results for the outlet channel almost immediately.

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Daily Brief Consumer: Seven & I Holdings, Hanwha Galleria , XPeng , Ola Electric, MSCI ACWI Index, Choice Hotels Intl, Hilton Grand Vacations, Under Armour, Golf Digest Online, Capri Holdings and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Couche-Tard Bid for 7&I (3382) – FEFTA and Economic Security
  • A Tender Offer to Purchase a 17.5% Stake in Hanwha Galleria by Kim Dong-Sun
  • [XPeng Inc. (XPEV US, SELL, TP US$2) Earnings Review]: Delivery Goal for MONA M03 Is Unrealistic
  • Ola Electric’s Path to Profitability: Volumes, Cells and PLI
  • Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact
  • Choice Hotels International Inc. – Major Drivers
  • Hilton Grand Vacations Inc.: Strengthening of Japanese Yen and Impact on Hawaiian Market & Other Major Drivers
  • Under Armour Inc.: An Enhanced Retail Strategy and SKU Optimization To Catalyze Growth! – Major Drivers
  • Golf Digest Online (3319 JP) – 2Q Follow-Up
  • Capri Holdings Limited: Expansion of Direct-to-Consumer Channels and E-Commerce! – Major Drivers


Couche-Tard Bid for 7&I (3382) – FEFTA and Economic Security

By Travis Lundy

  • The largest potential inbound cross-border M&A in years – for a national champion no less – gets a lot of press coverage. 
  • This morning, a Nikkei article noted Alimentation Couche-Tard (ATD CN) was likely to need “prior approval” from Japanese regulatory authorities for its takeover “the Nikkei has learned.”
  • It wasn’t difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&i has been on it for years as Type II Designated Business, requiring prior approval.

A Tender Offer to Purchase a 17.5% Stake in Hanwha Galleria by Kim Dong-Sun

By Douglas Kim

  • It was announced that a tender offer to purchase a 17.54% stake in Hanwha Galleria has been launched by Kim Dong-Sun (Vice President at Hanwha Galleria).
  • Tender offer price is 1,600 won per share, which is 22.8% higher than the closing price on 22 August. Tender offer amount is 54.4 billion won. 
  • On 23 August, Hanwha Galleria’s share price is likely to rise close to the tender offer price as many investors believe the tender offer is likely to be successful. 

[XPeng Inc. (XPEV US, SELL, TP US$2) Earnings Review]: Delivery Goal for MONA M03 Is Unrealistic

By Eric Wen

  • XPeng (XPEV) reported C2Q24 top line, non-GAAP operating loss and GAAP net income in line, 5.4% worse and 7.5% better than our estimate. 
  • We raised our MONA forecast by 13% but still significantly below XPEV’s guidance. We believe management guidance is overly optimistic;
  • We maintain a SELL rating on the stock and TP unchanged.

Ola Electric’s Path to Profitability: Volumes, Cells and PLI

By Devi Subhakesan

  • Investors seem concerned about poor visibility on Ola Electric’s profitability given its aggressive pricing strategy.
  • Expect increasing production volumes and the resulting benefits of operating leverage to lead to operating profits, likely by next quarter.
  • Integrating in-house manufactured Lithium-ion cells into its two-wheeler EVs from FY2026 and higher Government incentive pay out in FY2025 to drive profit margins further.

Shift Now to Defensives; Snap-Back Rally Testing Resistance $ACWI $SPX; Neutral Outlook Intact

By Joe Jasper

  • Snap-Back rallies have continued in the largest global equity markets (U.S., Japan, and Europe).
  • Japan’s TOPIX is still below 2690-2700 and the EURO STOXX 50 is below 4884, and whether they roll over here or from marginally higher levels, lower highs remain likely.
  • It all fits with our ongoing belief (since our July 25, 2024 Int’l Compass) that MSCI ACWI is going through a 1- to 4-month pullback/consolidation (we are one month in).

Choice Hotels International Inc. – Major Drivers

By Baptista Research

  • Choice Hotels International has portrayed a strong growth trajectory in its latest quarterly result, evidenced by a significant increase in adjusted EBITDA and EPS.
  • The company raised its full-year adjusted EPS guidance, reflecting confidence in its financial outlook and operational strategy.
  • Central to its growth strategy is the expansion of its portfolio of revenue-intense hotels.

Hilton Grand Vacations Inc.: Strengthening of Japanese Yen and Impact on Hawaiian Market & Other Major Drivers

By Baptista Research

  • Hilton Grand Vacations reported its second-quarter earnings for 2024, revealing mixed results that indicate both challenges and strategic advancements.
  • The quarter’s financials showcased a slowdown in some areas, notably impacted by global economic pressures and internal execution hurdles, leading to the company adjusting its full year guidance downward.
  • Despite these setbacks, the company’s strategic moves, such as the integration of acquisitions and a restructuring of its sales and marketing operations, suggest forward-thinking adjustments aimed at strengthening its market position.

Under Armour Inc.: An Enhanced Retail Strategy and SKU Optimization To Catalyze Growth! – Major Drivers

By Baptista Research

  • Under Armour’s first quarter fiscal 2025 earnings reflected a blend of strategic advancement and lingering challenges.
  • With Kevin Plank at the helm, the company appears focused on fortifying its branding, signifying a pivot towards a clearer segmentation of their market and a concerted effort to enhance product value rather than volume.
  • Starting with the positive aspects, Under Armour has delineated a path to refine its identity as an athletic brand through its “Protect This House” strategy, aiming to invigorate its connection with athletes and consumers globally.

Golf Digest Online (3319 JP) – 2Q Follow-Up

By Sessa Investment Research

  • GDO announced 1H FY24/12 consolidated financial results at 15:00 on Thursday 8/8, and it held a results briefing at 16:00 via Zoom webinar, hosted by CEO Ishizaka, COO Yoshikawa and CFO Nakamura.
  • Headline figures were net sales +10.2% YoY, EBITDA -26.9%, the operating loss expanding and profit attributable to owners of parent dropping into loss.
  • While headline numbers on the surface appear to indicate an extremely challenging environment, it is worth noting that the trend for 2Q-only profit improved sequentially at all levels (see red circles in the table below), and management is confident that profit will return to profitability in the 2H as measures to improve GPM and control costs contribute going forward.

Capri Holdings Limited: Expansion of Direct-to-Consumer Channels and E-Commerce! – Major Drivers

By Baptista Research

  • Capri Holdings Limited recently reported its earnings for the fourth quarter and full fiscal year of 2023.
  • The company saw a revenue increase in high single digits and a mid-single digit rise in earnings per share on a 52- week constant currency basis.
  • Despite not fully meeting initial expectations, there were significant areas of performance strength.

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Daily Brief Consumer: JD.com , Webjet Ltd, LG Electronics, 99 Speed Mart Retail Holdings, S.M.Entertainment Co, Expedia Group, Inc., China East Education , TSE Tokyo Price Index TOPIX, Dexelance and more

By | Consumer, Daily Briefs

In today’s briefing:

  • JD.com (9618 HK): Index Implications of Walmart Placement
  • Thoughts On Webjet (WEB AU)’s Demerger
  • LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index
  • 99 Speed Mart IPO: The Bear Case
  • 99 Speedmart Holdings IPO – Digestible Valuation
  • SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast
  • Expedia Group Inc.: A Bear’s Perspective! – Major Drivers
  • China East Education (667 HK): Rock Solid Improvements
  • Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
  • Dexelance: An Emerging Serial Acquirer of Luxury Brands


JD.com (9618 HK): Index Implications of Walmart Placement

By Brian Freitas

  • Media reports indicate that Walmart (WMT US) is looking to sell 144.5m shares of JD.com (JD US) to raise up to US$3.74bn. That would be substantially all of its stake.
  • There will be passive buying from global index trackers at the time of settlement of the placement shares and could absorb around 12% of the placement shares.
  • There will be no passive buying from HSI, HSCEI, HSTECH and HSIII trackers in the short-term. An increase in CCASS holdings should result in passive buying in December.

Thoughts On Webjet (WEB AU)’s Demerger

By David Blennerhassett

  • Back on the 22 May, global travel outfit Webjet (WEB AU)  announced it was exploring the separation of its two divisions – Webjet and Webjet B2C – via a demerger. 
  • If the demerger is implemented, shareholders will receive one Webjet B2C share for every Webjet share; plus retain their existing shares in Webjet (to be renamed WEB Travel Group).
  • A demerger booklet has been dispatched, with a 17th September vote on the in-specie distribution. If approved, WEB Travel (ex-entitlement) and Webjet B2C commence trading on the 23rd September.  

LG Electronics’ Value-Up Disclosure Today: Impact on Initial Flow Sizing for the Value-Up Index

By Sanghyun Park

  • LG Electronics aims for 7% growth, a 7x EV/EBITDA multiple, and a ₩1,000 DPS with a 25% payout ratio, likely disclosing details by late October or early November.
  • LG Electronics’ value-up disclosure highlights major non-financial companies’ participation before the value-up index launch, driven by regulatory pressure and concerns about index inclusion.
  • Samsung and Hyundai are likely to disclose value-up plans by early September, prompting an upward revision of flow size predictions for the value-up index launch.

99 Speed Mart IPO: The Bear Case

By Arun George

  • 99 Speed Mart Retail Holdings (99SPD MK), a leading grocery retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.
  • In 99 Speed Mart IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
  • The bear case rests on lacklustre outlet KPIs, indications of margin pressure, significant pre-IPO dividends and a significant secondary offering.

99 Speedmart Holdings IPO – Digestible Valuation

By Clarence Chu

  • 99 Speed Mart Retail Holdings (99SPD MK) is looking to raise US$530m in its Malaysia IPO. The IPO will be a mix of primary and secondary shares.
  • 99 Speed Mart Retail Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia. 
  • In our previous notes, we looked at the firm’s past performance. In this note, we undertake a peer comparison and discuss our thoughts on valuation.

SM Entertainment: Disposal of Non Core Assets – SM C&C and KeyEast

By Douglas Kim

  • On 21 August, SM Entertainment announced that it will sell its non-core assets including its controlling stakes in SK C&C and KeyEast.
  • The combined sales amount could be about 110 billion won or more, representing 7% or more of SM Entertainment’s market cap. 
  • Sale of SM C&C and KeyEast is likely to have a positive impact on SM Entertainment by selling its non-core assets and improving its balance sheet for higher shareholder returns.

Expedia Group Inc.: A Bear’s Perspective! – Major Drivers

By Baptista Research

  • Expedia Group, in its second-quarter 2024 earnings, exhibited a dual-faced performance characterized by significant achievements and emerging challenges that mirror the broader complexities of the travel industry.
  • The management has focused on revitalizing core brands, particular emphasis on enhancing execution within the company’s consumer segment, and fine-tuning their long-term strategic direction.
  • Under her leadership, Expedia Group has seen a robust growth in room nights and gross bookings indicating a strong recovery trajectory from previous downturns.

China East Education (667 HK): Rock Solid Improvements

By Osbert Tang, CFA

  • China East Education (667 HK)‘s 1H24 result is impressive with a 58% YoY increase in adjusted net profit. Good cost control is a key contributing factor. 
  • Profitability has improved in all business segments. Its strategy to focus on higher-value courses has led to further improvement in annualised tuition per student. 
  • The 1H24 result equals 68% of the full-year consensus, implying an upside in market expectations. Its net cash, at 35% of market capitalisation, is unmatched by peers.

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

By Aki Matsumoto

  • The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level. 
  • Since the equity ratio of manufacturing sector is over 40% and there’s little room for debt repayment, there’s room for a considerable increase in dividends in conjunction with share repurchases.
  • If free cash flow isn’t used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.

Dexelance: An Emerging Serial Acquirer of Luxury Brands

By Contrarian Cashflows

I recently spoke with Bogumil Baranowski, a fellow value investor and friend of mine, who shared his approach to finding attractive investments in industries facing temporary challenges but benefiting from long-term positive trends.

The luxury goods industry exemplifies this strategy. While short-term concerns such as potentially weakening consumer demand due to recessionary fears exist, these are outweighed by the long-term rise in global income and wealth levels.

Dexelance, the company I am discussing today, is currently attractively priced and stands to benefit from the enduring growth of the luxury goods sector.


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Daily Brief Consumer: Colowide Co Ltd, Seven & I Holdings, Mercari , Guzman Y Gomez, Symphony Ltd, I-Scream Media, China Resources Beer Holdings, Tongcheng Travel Holdings , Oriental Watch and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Colowide Placement – Needs a Very Large Correction
  • Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line
  • COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
  • Mercari (4385) | Activist to Add Urgency
  • Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion
  • Narrative and Numbers | Household Durables | FY24
  • I-Scream Media IPO Book Building Results Analysis
  • Beer in China: 1H2024 Low Point—What Lies Ahead?
  • Tongcheng Travel (780 HK): Seems like a Cost Issue
  • Oriental Watch (398 HK): Sluggish Sales But Deep Value And Rolex Resilience


Colowide Placement – Needs a Very Large Correction

By Sumeet Singh

  • Colowide Co Ltd (7616 JP) aims to raise around US$230m in order to fund its prospective M&A transactions over the next few years
  • While the company has undertaken a number of M&A transactions in the past, it hasn’t clearly stated its intended targets for this round.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line

By Oshadhi Kumarasiri

  • It was reported yesterday that Alimentation Couche-Tard (ATD CN) has put forward a bold proposal to acquire Seven & I Holdings (3382 JP).
  • The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.
  • However, we believe the offer price could fall short of market expectations, and it is likely that Seven & i will reject the proposal.

COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here

By Travis Lundy

  • Colowide Co Ltd (7616 JP) is an industrial fastish-food operator in Japan. They sell several dozen kinds of cuisine under several dozen brands, owned and franchised in Japan and overseas.
  • The company “philosophy” is “Everything we do is for our customers and employees.” The stock is up 30% in 10yrs. It pays no dividend, but it pays a big yutairimawari.
  • This means Real World Float is 100% owned by retail who want restaurant coupons. This offering will be bought by index, short covers, and another 20-30k coupon holders.

Mercari (4385) | Activist to Add Urgency

By Mark Chadwick

  • Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins
  • Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen
  • Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion 

Guzman Y Gomez (GYG AU): Free Float to Determine Index Inclusion

By Brian Freitas

  • Guzman Y Gomez (GYG AU) listed on 20 June and is eligible for inclusion in the S&P/ASX family of indices at the September rebalance.
  • Whether the stock is included in indices depends on the index providers estimate of free float. We expect index providers to assign floats of between 25-35% for the stock.
  • Inclusion in one global index could come in November and another in December. Inclusion in the S&P/ASX indices will depend on whether float is higher than 30% or lower.

Narrative and Numbers | Household Durables | FY24

By Pranav Bhavsar


I-Scream Media IPO Book Building Results Analysis

By Douglas Kim

  • I-Scream Media reported its IPO book building results. The IPO price has been determined at 32,000 won, which is at the low end of the IPO price range.
  • A total of 561 institutional investors participated in the IPO survey. The final demand ratio was 31.3 to 1.
  • Our valuation analysis suggests an implied price per share of 41,450 won, which represent a 29.5% upside from the IPO price.

Beer in China: 1H2024 Low Point—What Lies Ahead?

By Devi Subhakesan

  • Stock valuations for China’s top beer players are near historical lows, but is a recovery on the horizon? Will it ever return to the heady valuations of 2019-2020?
  • China Resources Beer Holdings (291 HK) and Budweiser Brewing APAC (1876 HK) have reported 1H2024 results showing a decline in sales volumes, attributed to several short term factors.
  • We highlight long-term factors, including an aging population and shifting consumer habits, that could limit sustained growth in China’s alcoholic beverage market.

Tongcheng Travel (780 HK): Seems like a Cost Issue

By Osbert Tang, CFA

  • Tongcheng Travel Holdings (780 HK) is still suffering from cost pressure, with adjusted net profit increased by 10.9% in 2Q24, despite a 48.1% revenue growth.
  • Both GMV and MPU growth rates have slowed in 2Q24 when compared with 1Q24, and revenue may also decelerate in 2H24 given the higher base for comparison.
  • The market will need some time to see if the moderating earnings trend will sustain, negatively affecting investor interests. Potential earnings downgrade is also a challenge.

Oriental Watch (398 HK): Sluggish Sales But Deep Value And Rolex Resilience

By Sameer Taneja

  • Hong Kong’s watch and jewelry sales were weak in Q2 CY24 (-24% YoY) as dampened sentiment continues to plague overall retail sales across regional sectors. 
  • However, Oriental Watch (398 HK), with its Rolex and Patek Phillipe portfolio, is expected to be more resilient than the rest of the watch industry. 
  • The company is still a very good dividend play, trading at 7.6x FY25 PE, with 60% of the market cap in cash and a 13.5% dividend yield. 

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Daily Brief Consumer: Seven & I Holdings, Alibaba Group Holding , 99 Speed Mart Retail Holdings, Zomato, Grab Holdings , Pan Pacific International Holdings, China Resources Beer Holdings, TSE Tokyo Price Index TOPIX, Duolingo and more

By | Consumer, Daily Briefs

In today’s briefing:

  • MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)
  • Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere
  • China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music
  • 99 Speed Mart IPO: The Bull Case
  • Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed
  • Grab Holdings (GRAB US) – Product-Led Sequential Growth Ahead
  • Pan Pacific International Holdings (7532 JP): Full-year FY06/24 flash update
  • China Resources Beer Holdings – Interim Results Show Progress but Macro Headwinds Remain
  • Amidst Changes in Purpose of Policy Shareholdings, We Should Note Whether They Are Really Decreasing
  • Duolingo Inc.: Expansion of Motion Design Capabilities by Acquiring Hobbes & Other Major Drivers


MEGA M&A! 7&I (3382 JP) Gets Non-Binding Bid from Alimentation Couche-Tard (ATD CN)

By Travis Lundy

  • Today, part-way through the day, the Nikkei ran an article saying that Alimentation Couche-Tard (ATD CN) had made a confidential non-binding proposal to buy Seven & I Holdings (3382 JP)
  • 7&i shares obviously went up (limit up in a hurry, staying there, large size traded limit up at close). 
  • Now things get complicated. 7&i has said they received a non-binding proposal for all the shares. There will be a Special Committee of all Independent Directors. All stakeholders will matter. 

Seven & I Holdings (3382 JP): Couche-Tard “friendly” Proposal Likely to Go Nowhere

By Arun George

  • Seven & I Holdings (3382 JP) shares rose 22.7% as it confirmed media reports that it had received a confidential, non-binding preliminary proposal from Alimentation Couche-Tard (ATD CN)
  • The interest is unsurprising due to the weak share price performance. Since ValueAct’s open letter on 25 January 2022, the shares are up 5.2% vs. the Nikkei 225 up 38.0%.
  • Couche-Tard aims for a friendly offer, which is challenging as it requires support from the founder’s family and the Japanese government. Therefore, the probability of a binding proposal is low.  

China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music

By Ming Lu

  • China Literature’s revenue increased by 28% YoY in 1H24, because four novel copyrights for movies brought box office hits.
  • KE revenue increased by 20% YoY in 2Q24 compared with a 19% YoY decrease in 1Q24, as government policies supported existing home transaction.
  • Alibaba announced that it will recruit 1,000 fresh graduates for tech positions in 2025.

99 Speed Mart IPO: The Bull Case

By Arun George

  • 99 Speed Mart Retail Holdings (99SPD MK), a leading groceries retailer in Malaysia, is seeking to raise US$530 million at RM1.65 per share.    
  • 99 Speed Mart is Malaysia’s largest mini-market player and leading grocery retailer, holding a market share of 40.1% and 11.6% in 2023, respectively. 
  • The bull case rests on a large TAM, rising market share, robust revenue growth underpinned by SSSG, a store expansion-driven growth strategy, profitability, cash generation, and modest leverage.   

Zomato Placement – Momentum Is Very Strong, past Ant Related Deals Have Been Mixed

By Sumeet Singh

  • AntFin is looking to raise around US$400m by selling around 2% of Zomato (ZOMATO IN).
  • Ant Group had earlier sold some of its stake in Nov 2023 and Mar 2024, with the deals producing a mixed bag result.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Grab Holdings (GRAB US) – Product-Led Sequential Growth Ahead

By Angus Mackintosh

  • Grab Holdings booked record GMV, revenue, FCF, MTUs, and EBITDA in 2Q2024 and flagged an optimistic outlook for 2H2024, with positive adjusted FCF expected to remain positive for FY2024.  
  • The company continues to focus on its product-led and technology-driven initiatives to drive growth and profitability through mass-market and high-value products such as Grab Unlimited, advance bookings, and group bookings.
  • Concerns over competition from TikTok look overblown, with Grab already active on social media. Management expects positive sequential growth for the next 2Qs and a stronger growth outlook in FY2025,

Pan Pacific International Holdings (7532 JP): Full-year FY06/24 flash update

By Shared Research

  • FY06/24 results: Sales JPY2,095.1bn (+8.2% YoY), operating profit JPY140.2bn (+33.2% YoY), net income JPY88.7bn (+34.1% YoY).
  • FY06/25 forecast: Sales JPY2,220.0bn (+6.0% YoY), operating profit JPY150.0bn (+7.0% YoY), net income JPY86.5bn (-2.5% YoY).
  • Store count end-June 2024: 742 total, 632 domestic, 110 overseas; 24 new stores in Japan, 12 overseas.

China Resources Beer Holdings – Interim Results Show Progress but Macro Headwinds Remain

By Rikki Malik

  • The company’s strategy of premiumisation continues to be executed to plan
  • Despite the derating, investors will wait until seeing concrete signs of a turn in the Chinese consumer
  • Continues to be a liquid proxy for Chinese consumption with no technology regulation risk

Amidst Changes in Purpose of Policy Shareholdings, We Should Note Whether They Are Really Decreasing

By Aki Matsumoto

  • The increase in foreign ownership and the decline in cross-shareholdings have encouraged management reform. In order for engagement to be effective, it is essential to further reduce cross shareholdings.
  • Reasonable explanation of the reasons for such transfers as changes in the purpose of policy shareholding or contributions to retirement benefit trust must be provided in the annual securities report.
  • Rising stock prices increase the value of policy shareholdings. To accelerate the reduction of policy shareholdings, numerical targets should be published, such as by setting milestones.

Duolingo Inc.: Expansion of Motion Design Capabilities by Acquiring Hobbes & Other Major Drivers

By Baptista Research

  • Duolingo Inc., a leader in language learning platforms, demonstrated robust performance in its second quarter of 2024 financial results, showcasing a balanced mix of high growth, increased user engagement, and strategic milestones that solidifies its market position while highlighting areas for prudence looking ahead.
  • The company reported a significant year-over-year growth in daily active users (DAUs) at 59% and revenues surged by 41%.
  • This robust top-line growth is supported by key product expansions and user engagement strategies.

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Daily Brief Consumer: Alibaba Group Holding , Great Wall Motor, 99 Speed Mart Retail Holdings, Midea Group Co Ltd A, Ola Electric, Ingredion Inc, Inter Parfums, Vf Corp, Cvs Health Corp and more

By | Consumer, Daily Briefs

In today’s briefing:

  • [Alibaba (BABA US, BUY, TP US$100) TP Change]: On Track for the Great Turnaround…Reiterate BUY
  • Time To Buy China/Gold
  • A/H Premium Tracker (To 16 Aug 2024): SB/NB Volumes WAAAAAY Down; AH Premia Down Small
  • 99 Speedmart Holdings IPO – Continued Expanding Its Network. Sales and Earnings Kept Up
  • ECM Weekly (19th Aug 2024) – Midea, China Res, WeRide, FirstCry, ACME, Gadgil, 99 Speed, Hind Zinc
  • Consumer Tales Aug Wk#3: Ola’s Dream Ride, Shopee’s SE Asia Lead, Jollibee’s Joyful 2Q
  • Ingredion Incorporated: Will They Survive The Risk of Market Saturation in Texturizing and Healthful Solutions? – Major Drivers
  • Inter Parfums Inc.: Will The Management’s Enhanced E-commerce & Digital Strategy Yield Dividends? – Major Drivers
  • V.F. Corporation: Direct-to-Consumer (DTC) Growth & Omnichannel Enhancement As A Critical Growth Lever! – Major Drivers
  • CVS Health Corporation: Strategic Leverage in Pharmacy Benefit Management (PBM) and Insurance Operations! – Major Drivers


[Alibaba (BABA US, BUY, TP US$100) TP Change]: On Track for the Great Turnaround…Reiterate BUY

By Ying Pan

  • BABA reported C1Q24 top line, adjusted EBITA and non-GAAP net profit (2.7%), 5.5% and in-line vs. consensus. 
  • E-Commerce GMV recovery is the most positive of all. TTG ad-revenues (CMR) trailed GMV growth but we see the two closing the gap in C2H24
  • Besides stabilizing e-commerce, BABA is on track of transforming itself from China’s eBay to China’s Microsoft. AI-related cloud revenue grew 100% YoY. 

Time To Buy China/Gold

By Douglas Busch

  • Gold breaks above MONTHLY bull flag suggesting possible move to 3000.
  • Is China ready to duplicate prior move we witnessed in Nikkei?
  • BABA looks technically attractive and could reach par by year-end.

A/H Premium Tracker (To 16 Aug 2024): SB/NB Volumes WAAAAAY Down; AH Premia Down Small

By Travis Lundy

  • Miserable economic data, minimal other data. It was a VERY quiet week in terms of gross volumes as per the SOUTHBOUND and NORTHBOUND monitors.
  • SOUTHBOUND net buyer for 28th week in a row. ETFs and Tencent strong (14 of 15 days net bought). NORTHBOUND outflows small. Record foreign capital flight extends.
  • As expected (with AH 20d Premia returns at multi-year highs 2wks ago), AH Premia fell slightly, narrow premia falling more than wide premia. I continue to expect more H-vs-A gains.

99 Speedmart Holdings IPO – Continued Expanding Its Network. Sales and Earnings Kept Up

By Clarence Chu

  • 99 Speed Mart Retail Holdings (99SPD MK) is looking to raise US$530m in its Malaysia IPO. The IPO will be a mix of primary and secondary shares.
  • 99 Speed Mart Retail Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
  • In our previous note, we looked at the firm’s past performance. In this note, we look at the updates since.

ECM Weekly (19th Aug 2024) – Midea, China Res, WeRide, FirstCry, ACME, Gadgil, 99 Speed, Hind Zinc

By Sumeet Singh

  • 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, BrainBees contiued along Ola Electric‘s path, ensuring that India’s ECM wave will continue, for now.
  • Once again there was only one placement this week, that too in India, just like the week before.

Consumer Tales Aug Wk#3: Ola’s Dream Ride, Shopee’s SE Asia Lead, Jollibee’s Joyful 2Q

By Devi Subhakesan

  • Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
  • Ola Electric (OLAELEC IN)  has surged 75% from its IPO issue price. For investors wondering about potential upside, we present our base-to-bullish case valuation range for Ola Electric’s stock price.
  • Sea (SE US) revised Shopee’s 2024 GMV growth outlook to the mid-20% range. Jollibee Foods(JFC PM)‘s  impressive June quarter results stand out against broader trend of weaker sales in QSR sector.

Ingredion Incorporated: Will They Survive The Risk of Market Saturation in Texturizing and Healthful Solutions? – Major Drivers

By Baptista Research

  • Ingredion Incorporated reported second-quarter 2024 earnings that surpassed expectations, highlighting a robust recovery in volumes and significant growth in profitability.
  • Adjusted operating income saw an 8% increase while gross margins expanded by 240 basis points, despite a 9% reduction in sales mainly attributable to lower raw material costs and a previous divestiture in South Korea.
  • 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.

Inter Parfums Inc.: Will The Management’s Enhanced E-commerce & Digital Strategy Yield Dividends? – Major Drivers

By Baptista Research

  • Inter Parfums’ second quarter earnings for 2024 provides a comprehensive update on the company’s performance and strategic direction in the fragrance market.
  • CEO Jean Madar discussed the strategic product launches and collaborations with notable brand ambassadors such as John Legend, Victoria Song, and Jayson Tatum, aimed at leveraging celebrity influence to enhance brand value and appeal, particularly among younger demographics.
  • The introduction of John Legend as the face of Montblanc Legend and the continuation of partnerships like those with Victoria Song for Jimmy Choo highlight the company’s effort to marry traditional and modern advertising tactics.

V.F. Corporation: Direct-to-Consumer (DTC) Growth & Omnichannel Enhancement As A Critical Growth Lever! – Major Drivers

By Baptista Research

  • VF Corporation’s first quarter earnings for fiscal year 2025 highlighted both achievements and challenges the company faces as it continues its transformation.
  • In its execution of the Reinvent transformation program, VF Corporation is focused on improving profitability and operational efficiency.
  • The company reported $50 million in cost savings during the quarter, contributing to its target of $300 million in savings, which it anticipates will be fully realized in the profit and loss statement by the end of the fiscal year.

CVS Health Corporation: Strategic Leverage in Pharmacy Benefit Management (PBM) and Insurance Operations! – Major Drivers

By Baptista Research

  • In the second quarter of 2024, CVS Health reported mixed financial results, underscored by significant achievements and notable challenges.
  • The company delivered an adjusted earnings per share of $1.83 and saw revenues exceeding $91 billion, with an operating cash flow of $8 billion for the first half of the year.
  • This was supported by a strong performance in the Health Services and Pharmacy & Consumer Wellness segments.

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Daily Brief Consumer: Kweichow Moutai, TSE Tokyo Price Index TOPIX, Sony Corp, The Walt Disney Co, Wynn Resorts and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold
  • Foreign Ownership, Which Has Reached a Record High of 31.8%, Will Continue to Play a Major Role
  • Sony Corporation: Enhanced Streaming and Subscription Revenue Growth in Entertainment Driving Our Optimism! – Major Drivers
  • The Walt Disney Company: Enhanced Streaming Services Strategy
  • Wynn Resorts: Enhanced Market Recovery in Macau & Expansion In New Markets! – Major Drivers


Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold

By Travis Lundy

  • 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 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.
  • HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.

Foreign Ownership, Which Has Reached a Record High of 31.8%, Will Continue to Play a Major Role

By Aki Matsumoto

  • The percentage of shares held by individuals and trust banks fell from 17.6% to 16.9% and from 22.6% to 22.1%, respectively. Increasing individual investors’ investment in Japanese equities isn’t easy.
  • The presence of overseas investors will increase, as the percentage of shares held by foreigners, which has reached a record high, is expected to remain high in the future.
  • The percentage of shares held by corporations decreased slightly, and cross-shareholdings are gradually being unwound. The gradual decline is likely to continue in the future.

Sony Corporation: Enhanced Streaming and Subscription Revenue Growth in Entertainment Driving Our Optimism! – Major Drivers

By Baptista Research

  • The Sony Group Corporation’s latest consolidated earnings report for the first quarter of fiscal 2024 demonstrated notable financial growth and strategic advancements across its diversified portfolio, which spans from electronic products and financial services to entertainment and gaming.
  • Despite a complicated global economic climate, marked by exchange rate volatility and potential threats of an economic downturn, particularly in the United States, Sony has reported robust results and optimistic projections for the fiscal year.
  • 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.

The Walt Disney Company: Enhanced Streaming Services Strategy

By Baptista Research

  • The Walt Disney Company reported its third-quarter financial results for 2024, reflecting a mixed performance across its diverse business segments.
  • The company reported a revenue growth of 2% during the quarter, indicating resilience in its theme parks segment despite slight moderation in demand.
  • Attendance at the domestic parks remained flat, with a slight increase in per capita spending, contributing to a steady revenue outlook for the fourth quarter.

Wynn Resorts: Enhanced Market Recovery in Macau & Expansion In New Markets! – Major Drivers

By Baptista Research

  • Wynn Resorts provided a detailed overview of its second quarter 2024 earnings, illustrating mixed financial and operational performance across its various geographies.
  • The company’s earnings call highlighted record earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR), capital expenditures, and strategic developments, particularly with Wynn Las Vegas, Boston, Macau, and ongoing projects in the UAE.
  • Starting with the positives, Wynn Resorts reported a record quarterly EBITDAR of $572 million, marking the company’s strongest second quarter in its history.

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