In today’s briefing:
- HSCI Index Rebalance and Stock Connect: Changes at the Margins
- Rakuten Mobile: Expecting Losses To Shrink With Symphony & Energy Turning Profitable
- Back in Hong Kong stocks
- Starbucks Inc: Divestment Of Seattle’s Best Coffee & Other Developments
- Marriott International: Acquiring The City Express Brand Portfolio & Other Developments
- McDonald’s Corporation: Major Drivers
- Monster Beverages: Major Drivers
HSCI Index Rebalance and Stock Connect: Changes at the Margins
- We see 3 potential adds for the HSCI in December. We also see 26 potential adds and 16 potential deletes for the index in March.
- Following the March rebalance, we see 22 potential inclusions to Stock Connect while we expect 37 stocks to be removed from the link.
- Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.
Rakuten Mobile: Expecting Losses To Shrink With Symphony & Energy Turning Profitable
- With e-commerce and fintech segments performing reasonably well, Rakuten Inc (4755 JP)’s Q3 results were mostly in line with expectations.
- However, the Mobile segment failed to live up to expectations with the segment’s operating loss narrowing by just ¥3.4bn to ¥120.9bn in 3Q22.
- Nonetheless, we are excited about the prospects of Rakuten Mobile through the success of Rakuten Symphony as the business is close to signing 12 new corporate customers.
Back in Hong Kong stocks
- Early this year I was quite pessimistic on Hong Kong stocks.
- But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.
- I should have been a bit quicker writing this up, but then you are getting it for free.
Starbucks Inc: Divestment Of Seattle’s Best Coffee & Other Developments
- Starbucks’ stock has been on a roll after a solid Q4 and fiscal 2022 which surpassed Wall Street expectations on all counts.
- With improving foot traffic, the company recently expanded its presence in the Italian market as well.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Marriott International: Acquiring The City Express Brand Portfolio & Other Developments
- Marriott delivered a mixed set of results for the third quarter.
- The leisure demand for the quarter remained strong and far above 2019 levels.
- Travelers are apparently continuing to mix pleasure and work visits, according to third quarter day-of-the-week trends.
McDonald’s Corporation: Major Drivers
- McDonald’s delivered a solid Q3 performance surpassing Wall Street expectations on all counts which is why its stock price has been surging over the past few weeks.
- The company’s sustained resiliency is demonstrated by its quarterly global comp sales, which increased by 9.5%.
- In the quarter, the chicken was a significant contributor to comp sales growth across all of their key markets, and they will continue to concentrate on expanding their worldwide market share in this significant category.
Monster Beverages: Major Drivers
- Monster delivered a mixed set of results with record third-quarter net sales of $1.62 billion which was below analyst expectations.
- Their cost of sales increased significantly during Q3 of 2022 compared to the third quarter of 2021, primarily because of higher costs for ingredients and other inputs, such as secondary packaging materials and co-packing fees, higher logistical costs, higher aluminum can cost, and mix of geographic and product sales.
- Monster’s strength remains its wide distribution versus smaller peers that helped the company create a strong demand for its energy drinks even in lull periods.
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