In today’s briefing:
- Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion
- Life Opens Supermarket 4.0: A Hybrid Online-Offline Store
- Takashimaya to Close Tachikawa
- Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush
- V-Mart Retail – Macro Challenges Cut Footfall and SSSG
- Bata India – FY25 Revenue Goal Implies Significant Acceleration
- Target Vs. Walmart: Which One Is Better Buy?
- Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints
- Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth
- Page Industries – Strong Set of Numbers; Long-Term Growth Visible
Korea Stub Trades: F&F Holdings Pair in a Substantial Diversion with F&F’s KOSPI 200 Inclusion
- F&F Holdings is a single-subsidiary PURE STUB PLAY with no operating assets. It currently trades at a 54.30% discount to its NAV, and its 20-day MA sigma sits below -2.0.
- The pair is currently in a substantial diversion. The passive inflow caused by F&F’s KOSPI 200 inclusion appears to have caused a flow imbalance.
- F&F is becoming a primary target for KOSPI 200’s post-rebalancing shorting events. Then, we can consider using F&F Holdings as a long hedge, in addition to outright shorting for F&F.
Life Opens Supermarket 4.0: A Hybrid Online-Offline Store
- Life opened a new, upscale supermarket last month in central Tokyo that is designed to process online orders as easily as serving in-store customers.
- The new store, replacing Mitsukoshi in Ebisu Garden Place, includes a backroom that acts as a dark store for online orders.
- This frees up space in the store for higher margin items like deli foods and is a sign of the supermarket’s intentions going forward.
Takashimaya to Close Tachikawa
- Takashimaya will close its store in Tachikawa early next year.
- This can be seen as a further sign of an improving outlook for a smaller department store sector.
- More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.
Shiseido (4911 JP) | Q2 Results Will Make Analysts Blush
- Chinese lockdowns are taking their toll on Q2 sales. We expect the upcoming report to be much worse than the last
- Estee Lauder’s recent results suggest that travel retail will be a negative shock too
- We believe there is one large downgrade to full-year guidance and consensus numbers. Too early turn bullish
V-Mart Retail – Macro Challenges Cut Footfall and SSSG
- Competition to impact footfalls: With major conglomerates penetrating into organized retail territory, footfalls are expected to get impacted in the near term.
- Why we like V-Mart Retail: VRL is among the few pure play value apparel retailers that are catering to Tier- 2/Tier-3/Tier-4 cities of India.
- We see a huge runway for growth as it is currently concentrated only in the states of Uttar Pradesh and Bihar.
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.
Bata India – FY25 Revenue Goal Implies Significant Acceleration
- 4QFY22 performance: Gross margin, EBITDA and PAT outperformed our estimates significantly though revenue came in short due to higher-than-expected impact of Omicron in the initial part of the quarter (see table below)
- Sales were up 7% over 4QFY20 and could have been 11-12% had it not been for the third covid wave in January 2022. The EBTIDA margin surprise could have been a lot larger had the lost sales come through.
- Bata being recognized as a sneaker destination: BIL’s sneaker portfolio continues to outperform all other products.
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.
Target Vs. Walmart: Which One Is Better Buy?
- In the past couple of weeks, big box retail stocks got hammered. The largest retailer Walmart missed EPS expectations by a large margin
- The results certainly caught investors and analysts by surprise, and it seemed like their management was surprised too
- Some item sales (grills, plants, and pool chemicals) were impacted by weather, and high inflation was causing consumers to buy cheaper goods
Colgate-Palmolive (India) – Margin Surprises but Growth Disappoints
- 4QFY22 headline performance: CLGT’s 4QFY22 revenue (including other operating income) grew by 1.4% YoY to Rs13bn (vs est. Rs13.6bn).
- FY22 performance: Sales, EBITDA and APAT grew by 5.3%, 3.7% and 4.1% YoY, respectively.
- Other highlights: (1) India is identified as the key emerging market to contribute to the overall growth of the parent, so the focus on growth will remain.
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.
Johnson Controls-Hitachi Air Conditioning India – Margin Pressure Offsets Topline Growth
- Strong performance expected in 1QFY23: JCH-IN has grown by 60.4% over the 4QFY20 base.
- Expect margins to improve going forward: EBITDA margin contracted by 770bps YoY to 5.7% in 4QFY22 mainly due to commodity cost pressures (raw material costs were up 40.7% YoY).
- Capital employed increased: Capital employed for Cooling Products rose to Rs5.53bn in 4QFY22 from Rs4.39bn in 4QFY21.
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.
Page Industries – Strong Set of Numbers; Long-Term Growth Visible
- Healthy demand outlook: Demand for consumer discretionary remains intact for PAGE even though it is tepid for others – due to value for money products with reasonable prices to hold on to consumers.
- Margins: The management undertook price hikes by ~8% during Dec ’21 in response to input cost increases, the effect of which can be attributed to this quarter.
- Distribution reach expansion: PAGE will continue to maintain the pace of outlet expansion both across EBOs and MBOs and is looking to reach ~1,50,000 MBO outlets in the next couple of years and double the EBO count from 1,000 EBOs in the next 4 years.
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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