In today’s briefing:
- Alibaba Group: A Story Of Cross-Border E-commerce Scale-up! – Major Drivers
- Best World (BEST SP): Best and Final S$2.56 Offer
- Asian Dividend Gems: Grape King Bio
- Sony Corporation: How It Is Implementing A Multi-Faceted Strategy In A Maturing Consumer Electronics Market! – Major Drivers
- Honda Motor Co.: What Is The Positioning of Hybrid in Electrification Strategy? – Major Drivers
- The Home Depot Inc.: The Influence of Housing Turnover and Interest Rate Environment! – Major Drivers
- Improved Profitability to Attract Overseas Investors Key to Raise Valuation Even After TSE’s Request
- U.S. Foods: A Story Of Increasing Core Customer Business! – Major Drivers
- Tapestry Inc.: Synergies From Capri
- Skechers U.S.A.: Increased Innovation and Messaging around Comfort Technologies & Other Major Drivers
Alibaba Group: A Story Of Cross-Border E-commerce Scale-up! – Major Drivers
- Alibaba Group’s March Quarter and Full Fiscal Year 2024 results show that major segments such as the Taobao and Tmall Group, Alibaba International Digital Commerce, and core public cloud offerings are experiencing growth.
- The Taobao and Tmall Group achieved double-digit year-over year growth, while Alibaba International Digital Commerce revenue increased by 45%.
- Moreover, AI related revenue increased triple digit year-over-year, demonstrating the potential of AI technology in fueling the company’s growth.
Best World (BEST SP): Best and Final S$2.56 Offer
- Best World International (BEST SP) has disclosed a revised exit offer which has been declared final. The S$2.56 offer is a modest 2.4% premium to the previous S$2.50 offer.
- The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
- The revised offer remains underwhelming. However, the headcount test risk is lowering as retail seems resigned to accepting it. At the last close, the gross spread was 2.4%.
Asian Dividend Gems: Grape King Bio
- Grape King Bio has one of the most remarkable consistency in profit margins among all Asian F&B companies. Its net margins ranged from 13% to 15% in the past decade.
- The company’s dividend yield increased from 3.8% in 2021 to 4.1% in 2022, and 4.4% in 2023. Its annual dividend payout averaged 69.6% from 2019 to 2023.
- Established in 1969, Grape King Bio is one of the leading health food, drink, and supplement products manufacturers in Taiwan.
Sony Corporation: How It Is Implementing A Multi-Faceted Strategy In A Maturing Consumer Electronics Market! – Major Drivers
- Sony Group Corporation recently reported its FY 2023 results and offered insights into its FY 2024 forecast as well as its fifth mid-range plan.
- The corporation experienced a record high in consolidated sales at JPY 13,020.8 billion while consolidated operating income was JPY 1,208.8 billion.
- Net income stood at JPY 970.6 billion, and consolidated adjusted EBITDA was JPY 1,880 billion.
Honda Motor Co.: What Is The Positioning of Hybrid in Electrification Strategy? – Major Drivers
- Honda Motor’s earnings of FY ’24 reveals that the mobility company has been posting a historic high operating profit of JPY 1,381.9 billion, with an operating profit margin of 6.8%.
- Underpinning this growth has been the company’s core strategy of focusing on environmental sustainability and safety, which is resonating well with the consumers.
- For FY ’25, Honda has set a higher target for operating profit at JPY 1.42 billion, aiming to achieve an operating profit margin of 7%, a year ahead of their original plan.
The Home Depot Inc.: The Influence of Housing Turnover and Interest Rate Environment! – Major Drivers
- In the first quarter of 2024, The Home Depot’s total sales amounted to $36.4 billion, marking a decrease of 2.3% from the same period last year.
- The company’s comp sales declined by 2.8% and US stores also reported negative comps of 3.2%.
- The diluted earnings per share were noted to be $3.63 for the first quarter, a dip from $3.82 during the first quarter of the previous year.
Improved Profitability to Attract Overseas Investors Key to Raise Valuation Even After TSE’s Request
- Companies that increased Tobin’sQ have further increased Tobin’sQ due to continued growth in ROE and ROA. They have room to further improve return on capital by reducing cash on hand.
- Companies with lower Tobin’s Q may include small-cap stocks that are increasingly undervalued because they have relatively high ROE and ROA but are not covered by overseas investors.
- Over the past year, few companies raised their valuations based solely on expectations of P/B bottoming-out without improving profitability, and IR activities alone have had limited effect in boosting valuations.
U.S. Foods: A Story Of Increasing Core Customer Business! – Major Drivers
- US Foods, one of the largest foodservice distributors in the United States, delivered its first quarter 2024 earnings, demonstrating adequate progress in executing its long-term strategy, despite adverse weather conditions and labor disruptions.
- Despite these challenges, they still managed to achieve 4.2% total case growth, with independent case volume growing by 4.6%.
- The company’s quarterly success gave them the confidence to maintain their full-year guidance.
Tapestry Inc.: Synergies From Capri
- Tapestry Inc. reported its third quarter earnings results, outpacing expectations primarily due to disciplined brand building and operational excellence.
- CEO, Joanne Crevoiserat, highlighted that total revenue was aligned with the prior year on a constant currency basis, reflecting the initial end of their guidance range.
- The fashion house witnessed a 2% sales decline in Greater China, although it remained confident about long-term prospects and continued investment in the region.
Skechers U.S.A.: Increased Innovation and Messaging around Comfort Technologies & Other Major Drivers
- In Q1 2024, Skechers hit a new quarterly sales record of $2.25 billion, a gain of 12.5% or $250 million, compared to the previous year.
- Also, diluted earnings per share registered a record of $1.33.
- These results were fuelled by growth in both direct-to-consumer and wholesale sectors on a global scale.
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