In today’s briefing:
- Alibaba (9988 HK) Pre-Earnings: Will See Growth Again, At Least 43% Upside
- Hangzhou GreatStar Industrial GDR Listing – Wider Discount Here and Momentum Has Been Strong
- Keepers Holdings: Stellar Q3 2022/ More to Follow in Management Call on 16th November
- PPIH: Combating Cost Inflation Through Personal Brands Growth
- An Interview with Flashlight Capital Patners CEO Lee Sanghyun on KT&G
- Disney 4Q2022: Cord Cutting Exacerbating DTC Losses
- Wynn Resorts Ltd: Possible Macau Openings, Las Vegas Recovery,big Investor Takes 6.1% Position
Alibaba (9988 HK) Pre-Earnings: Will See Growth Again, At Least 43% Upside
- We believe the revenue growth will recover from zero in 1Q23 to 4% YoY in 2Q23.
- We believe the operating margin will improve in the following two years because the company is cutting unprofitable businesses.
- We set an upside of 43% according to other retailing giants’ price / sales ratios.
Hangzhou GreatStar Industrial GDR Listing – Wider Discount Here and Momentum Has Been Strong
- Hangzhou Great Star Industrial Co., (002444 CH) is looking to raise around US$150m in its Swiss GDR listing. Huatai is the sole bookrunner in the deal.
- The firm is offering 11.5m GDRs (1 GDR to 5 A-shares) for sale at a 16.1-18.7% discount to last close.
- The deal would represent just 2.3 days of three month ADV and 4.3% of the firm’s current mcap.
Keepers Holdings: Stellar Q3 2022/ More to Follow in Management Call on 16th November
- The Keepers Holdings, Inc. (KEEPR PM) reported strong Q3 2022 revenue growth of 48.6% YoY and profit growth of 47.8%, led by strong growth in all categories of spirits.
- The stock trades at 8.2x FY22e/6.7x FY23e (numbers exclude the incremental earnings from its 50% stake in W&H, which we estimate could at least add 7-8% to our numbers).
- We will get more color from the post-results call on the 16th of November 2022 (aftermarket).
PPIH: Combating Cost Inflation Through Personal Brands Growth
- Pan Pacific International Holdings (7532 JP)’s 1QFY23 was broadly in line with consensus estimates with revenue and OP of ¥473.7bn (consensus: ¥473.8bn) and ¥23.9bn (consensus: ¥23.8bn) respectively.
- Personal brands growth and Asia expansion are driving up PPIH’s margins while most companies in the consumer sphere are failing to pass down cost inflation.
- With signs of OP moving to the pre-UNY acquisition level, we think that there’s an upside to the company’s medium-term guidance and consensus.
An Interview with Flashlight Capital Patners CEO Lee Sanghyun on KT&G
- This past week, I had an interview with Lee Sanghyun, the founder and CEO of Flashlight Capital Partners (FCP) which is currently an activist investor on KT&G Corporation (033780 KS).
- Our interview focused on five key issues including valuation, buyback & dividends, ginseng business spin-off, investment horizon, and aligning management’s interests with those of its shareholders.
- FCP’s shareholder return plan is to 3x higher than the one currently proposed by the company. For further details, see FCP’s website https://flashlightcap.com/.
Disney 4Q2022: Cord Cutting Exacerbating DTC Losses
- Across the board miss as DTC losses peak, park margins weaken, and linear likely to fall off a cliff.
- Big FY2023 guide down on revenues (HSD vs. LDD previously) and OI growth (HSD vs. ~25% consensus previously).
- Disney profitability lower for longer as macro headwinds on parks, accelerating cord cutting, and pushed out D+ profitability means OI likely down $2B in both FY23-24.
Wynn Resorts Ltd: Possible Macau Openings, Las Vegas Recovery,big Investor Takes 6.1% Position
- Billionaire US investor Tillman Fertitta has bought into what he believes is an undervalued stock as the Las Vegas market recovery speeds up.
- Stock could now be in play as Fertitta, Wynn’s ex-wife and Macau giant Galaxy now control a al of 20% the outstanding shares.
- Stock is up 18% since Fertitta’s buy last week. It could well be in play.
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