In today’s briefing:
- Asics (7936) | Stepn into the Metaverse
- H&H (1112 HK): Near Term Gloom Not Bad Enough to Lead to Long Term Doom.
- Aisin – Low Margins But Volume Is Key
- Dabur India – Misses Estimates; Near Term Remains Challenging
- Dabur – Weak HPC Show; Expect Resilient Margin in FY23
- Marico Ltd. – Expect near Term Demand to Be Uncertain and Margins to Be Subdued
- MatsukiyoCocokara (3088) | Triple Booster of Merger Synergies, Domestic Recovery, & Tourism
- Tata Consumer Products Ltd. – Operating Performance In-Line
- TVS Motor Company – Margin Beat; Supportive Outlook; EV Strategy Gathers Pace
Asics (7936) | Stepn into the Metaverse
- Asics reports Q1 results on 11 May – we expect a beat to consensus numbers
- We are bullish on Asics for the long term market share opportunity in China and margin expansion driven by digital
- The rather amazing tie-up with STEPN for NFTs highlights potential new ways to monetise Asics brand value
H&H (1112 HK): Near Term Gloom Not Bad Enough to Lead to Long Term Doom.
- Highly leveraged Balance sheet and a USD350 mn bridge loan that needs refinancing, amidst rising interest rates, have alarmed investors, thus driving Health And Happiness (H&H) (1112 HK) stock south.
- With its core Baby nutrition segment sales declining and Adult, Pet nutrition still in ramp up phase, the going has been tough for H&H as operating margins weakened.
- Even as its near term concerns seem daunting, long term prospects are good with a diversified premium-brand portfolio that can moderate long term risk to growth from declining birth rate.
Aisin – Low Margins But Volume Is Key
- Aisin’s 4QFY22 was weak on margins with revenue of ¥1,049bn (+3.9% vs. consensus) and OP of ¥43bn (-33.4% vs. consensus).
- Guidance had a similar tone with the company projecting ¥4,450bn in revenue (+2.4% vs. consensus) but OP of ¥190bn (-29.6% vs. consensus) which we think is too conservative.
- While results were disappointing we expect volume growth to be the key catalyst next year and cheap valuations should support strong upside.
Dabur India – Misses Estimates; Near Term Remains Challenging
- Headline performance: Dabur’s 4QFY22 consolidated revenue grew by 7.7% YoY to Rs25.2bn (our est. of Rs26.2bn). EBITDA grew by just 2.5% YoY to Rs4.5bn (our est. of Rs5.1bn).
- Segmental performance for 4QFY22: Healthcare (33.6% of Domestic FMCG in 4QFY22) grew by 7.4% YoY (2- year CAGR: 14.9%).
- 4QFY22 margin: Gross margin was down 130bps YoY at 47.4% (-90bps QoQ; vs our est. 47.5%)
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Dabur – Weak HPC Show; Expect Resilient Margin in FY23
- Revenue miss, weak HPC: Net revenue grew by 8% YoY (+25% in Q4FY21 and +8% in Q3FY22), a miss on our expectation of 10.6% growth.
- A miss in margin; expect resilient margin in FY23: GM contracted by 130bps YoY (-35bps in Q4FY21 and -205bps in Q3FY22) to 47.4%.
- mployee/other expenses grew by 4/14% YoY (17/17% in Q4FY21). A&P spends were down 3% YoY.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
Marico Ltd. – Expect near Term Demand to Be Uncertain and Margins to Be Subdued
- 4QFY22 headline performance: MRCO’s 4QFY22 consolidated topline grew by 7.4% YoY to Rs21.6bn (our est. of Rs21.5bn).
- 4QFY22 margin performance: Gross margin improved to 44.5% (+30bps YoY and +80bps QoQ; vs our est. of 43.8%).
- FY22 performance: Revenue, EBITDA and APAT grew by 18.2%, 6.4% and 5.9%, respectively.
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
MatsukiyoCocokara (3088) | Triple Booster of Merger Synergies, Domestic Recovery, & Tourism
- Merger synergies such as integrated purchasing will result in higher gross margins. A more efficient cost structure and sales synergies will boost the bottom line
- We expect consumption to normalize in Japan as people get used to “living with covid.” Higher foot traffic will drive a resumption of high margin cosmetics
- Inbound travel should be partially normalized this year and we believe the market will quickly price this in once borders reopen. We see 21% upside
Tata Consumer Products Ltd. – Operating Performance In-Line
- Headline performance: TCPL’s 4QFY22 consolidated revenue grew by 4.5% YoY to Rs31.8bn (vs our est. of Rs31.3bn).
- Business performance: India Branded business was up 6% YoY in 4QFY22.
- Consolidated 4QFY22 margin: Gross margin was up 540bps YoY at 44.6% (+90bps QoQ; vs est. of 43.7%)
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
TVS Motor Company – Margin Beat; Supportive Outlook; EV Strategy Gathers Pace
- Srong results; margin beat driven by tight cost controls: TVS reported revenue of Rs55bn, which was below our estimate (-3%), due to flattish ASP QoQ.
- Encouraging outlook on demand and profitability: TVS expects the demand momentum to hold reasonably well in the export markets.
- Expect premium valuation to sustain on continued volume and earnings outperformance
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
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