In today’s briefing:
- WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
- Tesla Cuts Prices of Top Models After Deliveries Fall
- GoTo Gojek Tokopedia (GOTO IJ) – Building Positive Resonance with New Initiatives
- Low Cost Apparel Sales Keep Rising: Shimamura Aims for ¥800 Billion
- Saizeriya (7581 JP): Japanese Company + Fast Casual Italian Food = China Growth Story?
- Levi Strauss & Co.: Defying Odds with Double-Digit Growth in Direct-to-Consumer Business! – Major Drivers
- PDD Holdings Inc.: Breaking the Mold with Tech-Driven Farming Innovations and Skyrocketing Revenues! – Major Drivers
- Sonos Inc.: Does It Have A Sustainable Competitive Advantage? – Major Drivers
WisdomTree Emerging Markets High Dividend Index Rebalance: Huge Turnover & Trade Next Week
- The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of high dividend yield stocks within emerging markets.
- The October rebalance will result in a one-way turnover of ~37% and in a one-way trade of US$926m. There are 92 stocks with over 1 day of ADV to trade.
- In Asia, the largest buy flows are expected on Astra International (ASII IJ) and the largest sell flows on POSCO Holdings (005490 KS).
Fast Retailing (9983) Beats Guidance, Stronger Forecasts, STILL Has a Nikkei 225 Problem
- Fast Retailing (9983 JP) today announced better than guided results, and 10% revenue growth, 18% OP growth to August 2024. NP is light, but still well higher than street consensus.
- At 10.37% Nikkei 225 weight, it is still above the target for 31 July 2024. If it does not underperform Nikkei 225 between now and then, US$2bn to sell end-Sep24.
- If people like the growthiness, that can be absorbed. But if the stock were to go up 10% vs Nikkei, there’d be US$2bn, then maybe another US$2bn to sell.
Zomato Lock-Up – A US$240m+ Softbank Linked Lockup Release
- In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
- Softbank then sold a part of its stake in Aug 2023, the rest of its stake will come out of lockup soon.
- In this note, we will talk about the lock-up dynamics and recent updates.
Tesla Cuts Prices of Top Models After Deliveries Fall
- Tesla Inc. will have to sell a record number of cars in the fourth quarter to reach its goal for the year after third-quarter deliveries declined.
- The electric-car maker produced 430,488 vehicles in the third quarter, down 10% from the second, and delivered 435,059 units, down 6.7%, Tesla said Monday.
- The drop in deliveries resulted from production stoppages at its factory in Fremont, California. Tesla CEO Elon Musk said in July that production facilities would be closed at various times in the third quarter to perform plant upgrades.
GoTo Gojek Tokopedia (GOTO IJ) – Building Positive Resonance with New Initiatives
- GoTo Gojek Tokopedia may see a stabilisation of the declines in GTV that it has experienced over the last 2Qs, with some of the platform’s new initiatives gaining traction.
- The closure of TikTok Shop should be positive at the margin for Tokopedia but it has also rolled back its platform fee, which has had a positive impact on growth.
- New initiatives include GoRide Transit, GoCorp, GoTo PLUS, and the GoPay app, with the latter seeing strong take-up. 3Q2023 results should reveal more details on initiatives. All-time low seems unjustified.
Low Cost Apparel Sales Keep Rising: Shimamura Aims for ¥800 Billion
- Price consciousness remains high among most Japanese consumers at present, a boost to low-cost apparel retailers.
- Shimamura, which has posted three straight years of growth But when price is the main driver, competition from the likes of Shein and Temu becomes a growing problem.
- So even Shimamura is trying to add value through branding, collaborations and Shein-like supply chains and the outlook is promising, suggesting significant upward gains for the stock.
Saizeriya (7581 JP): Japanese Company + Fast Casual Italian Food = China Growth Story?
- Saizeriya (7581 JP) is a Japanese restaurant chain of fast casual Italian food, with currently the majority of operating profit and growth coming from China.
- The Asia segment, which is primarily restaurants in China, nearly doubled operating profit in FY23 (year ending August) from pre-COVID FY19.
- The company is trading at 27x FY24E PE, with more than 80% expected growth in operating profit in FY24.
Levi Strauss & Co.: Defying Odds with Double-Digit Growth in Direct-to-Consumer Business! – Major Drivers
- Levi Strauss & Co. delivered a mixed set of results for the quarter, with revenues well below analyst expectations but managed earnings beat.
- Despite facing headwinds, reported revenues remained steady compared to the previous year and decreased by 2% on a constant currency basis.
- Their Brands segment, consisting of Dockers and Beyond Yoga, is performing impressively, generating nearly $0.5 billion in annual revenue.
PDD Holdings Inc.: Breaking the Mold with Tech-Driven Farming Innovations and Skyrocketing Revenues! – Major Drivers
- PDD Holdings Inc. delivered a solid result and managed an all-around beat in the quarter.
- The company experienced a substantial 66% year-on-year increase in revenue, signaling a growing trust in its products and services.
- This surge in consumer confidence has led to increased demand across various product categories, a testament to the company’s continued success.
Sonos Inc.: Does It Have A Sustainable Competitive Advantage? – Major Drivers
- Sonos, Inc. delivered an all-around beat in the previous quarter.
- The company reported $373.4 million in sales, up 23% sequentially and approximately flat year over year in both reported and constant currency terms.
- This growth was fueled by a full quarter of projected price increases, decreased component costs, and a favorable mix.
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