In today’s briefing:
- Mainland Connect NORTHBOUND Flows (To 9 Feb 2024): Decent Net Momo Buying, Especially in Financials
- Quiddity HSCEI Mar 24 Flow Expectations: Zhongsheng (881 HK) Downtrend Could Continue
- Second Time Around
- Deckers Brands: Initiation of Coverage – Why Their DTC Strategy Will Blow Your Mind! – Major Drivers
- Dramatic Growth of SHEIN & Temu Having Noticeable Impact On Segments Outside Of US Retail
- Cocoa Reaches All-Time High – First Time since 1960 // Crack Spreads continue to Diverge
- Church & Dwight: Benefiting from Consumer Trade Down But Is It Enough? – Major Drivers
Mainland Connect NORTHBOUND Flows (To 9 Feb 2024): Decent Net Momo Buying, Especially in Financials
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net BUY RMB 16.1bn of A-shares on VERY strong average activity after +9.9bn and +12.1bn RMB the two weeks before. Some National Team buying this week.
- Renewables selling was tempered. Finance and Industry saw large net buying. Five of the top ten buys among liquid NORTHBOUND stocks were finance. Info Tech saw net selling. Again.
Quiddity HSCEI Mar 24 Flow Expectations: Zhongsheng (881 HK) Downtrend Could Continue
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- The index changes for HSCEI index for the March 2024 index rebal event will be announced on 16th February 2024.
- In this insight, I have shown how my flow expectations have changed since I published my last HSCEI insight on 6th December 2023.
Second Time Around
- The Della Valles and LVMH-backed L Catterton announced an agreement to launch a voluntary tender offer to buy 36% of Italian luxury group Tod’s SpA (TOD IM) at €43/share to take it private.
- In spite of the 31% premium to the 3-month VWAP, and the loss of brand equity by Tod’s the offer seems cheap on a multiples basis, considering turnaround potential.
- Considering a 95% squeeze-out threshold, 80.4% of the float must tender, which is high. A sweetening may be needed, although the offeror threatens with a merger with itself to delist.
Deckers Brands: Initiation of Coverage – Why Their DTC Strategy Will Blow Your Mind! – Major Drivers
- This is our first report on global footwear and apparel major, Deckers Outdoor.
- The company saw a strong fiscal third quarter for 2024, but the company did recognize certain risks and uncertainties that could potentially impact future performance.
- Total company revenue saw an increased 16% to reach $1.56 billion, largely thanks to full-price consumer demand.
Dramatic Growth of SHEIN & Temu Having Noticeable Impact On Segments Outside Of US Retail
- The effects of SHEIN’s and Temu’s growth on US retail are already well known
- But recent data points show the companies impacting other industries, too
- Through their dramatic growth the two companies are gaining influence in US
Cocoa Reaches All-Time High – First Time since 1960 // Crack Spreads continue to Diverge
- Cocoa Reaches All-Time High – First Time since 1960 A long-held commodity price record has fallen: The price of NY cocoa futures has surged to almost $5,400 a ton, surpassing the $5,379 peak in place since 1977 ( roughly 46 years ago).
- Cocoa was one of the few commodities that hadn’t set a fresh nominal price record in the 2000s.
- The current rally is fuelled by the El Nino weather phenomenon which is causing drier temperatures in West Africa, where three-quarters of the world’s cocoa is produced – this fundamental weather event has now led to a short squeeze situation in the cocoa futures market.
Church & Dwight: Benefiting from Consumer Trade Down But Is It Enough? – Major Drivers
- The investment thesis is based on the third-quarter results from Church & Dwight Co Inc.
- The company recorded solid performance with reported revenue surpassing its outlook by 2.5% and organic revenue exceeding their expectations by 0.8%.
- This marks its fourth consecutive quarter of posting robust results.
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