In today’s briefing:
- Cosmecca Korea Plans to Switch Listing from KOSDAQ to KOSPI
- Mainland Connect NORTHBOUND Flows (To 10 May 2024): So-So Volumes, As Did Not Play Catchup
- Since Cash on Hand Will Not Decrease in FY2024, Shareholder Returns Remain a Hot Topic
- Lear Corporation: Industrial Automation
- Sirius XM Holdings: Improving Conversion
- Molson Coors Beverage Company: Recent Shelf Space Gains
- The Clorox Company: A Story Of Innovation-Led Growth
- Sysco Corporation: A Tale Of Improved Profitability Through Strategic Sourcing! – Major Drivers
- Archer-Daniels-Midland Company: Strengthening Margins Through Operational Improvements & Renewable Production! – Major Drivers
Cosmecca Korea Plans to Switch Listing from KOSDAQ to KOSPI
- On 10 May, Cosmecca Korea (241710 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI.
- The company plans to convene an extraordinary general meeting of shareholders on 29 August to finalize on the switching of Cosmecca Korea listing from KOSDAQ to KOSPI.
- Cosmecca Korea is one of the leading Korean ODM manufacturers of cosmetic products.
Mainland Connect NORTHBOUND Flows (To 10 May 2024): So-So Volumes, As Did Not Play Catchup
- 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 4.8bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought Kweichow Moutai, banks, Haier Smarthome, etc.
- HUGE week in H vs A (since the 30 April close). This may be colouring foreigner activity in As quite a bit.
Since Cash on Hand Will Not Decrease in FY2024, Shareholder Returns Remain a Hot Topic
- Most large companies initially estimate sales and profits conservatively, and CapEx, which is often planned more than a year in advance, isn’t often above plan.
- Companies have a cautious earnings outlook, but the market consensus still expects profit growth in FY2024. CapEx growth in the BOJ Tankan is expected to be slightly higher than profits.
- Assuming an 8.5% increase in CapEx for large manufacturing companies and a low single-digit growth in the recurring profit outlook, the level of cash on hand is unlikely to decrease.
Lear Corporation: Industrial Automation
- Lear Corporation’s record-setting first quarter revenues of $6 billion show an increase of 3%.
- Core operating earnings were up 6% at $280 million, while adjusted earnings per share rose 14% to $3.18.
- Operating cash flow matched that of the same period the previous year.
Sirius XM Holdings: Improving Conversion
- SiriusXM Holdings Inc. delivered a strong financial performance for its first quarter of 2024, with an encouraging 7% year-over-year increase in advertising revenue to over $400 million.
- This growth in ad revenue, driven by a growing addressable advertising audience and a strengthening ad market, helped offset a slight 1% drop in subscription revenue.
- The firm’s adjusted EBITDA was up 4% year over-year and delivered a margin of 30%, up 1 percentage point from the previous year.
Molson Coors Beverage Company: Recent Shelf Space Gains
- The latest earnings from Molson Coors Beverage Company indicates a strong performance in their first quarter, with substantial growth in top and bottom lines and consistent achievement of their acceleration plan.
- The company’s net sales revenue surged by over 10%, while its underlying pretax income increased by nearly 69%, underpinned by significant margin improvement.
- Additionally, the company reaffirmed its guidance for the full year.
The Clorox Company: A Story Of Innovation-Led Growth
- The Clorox Company’s third-quarter financial results suggest a continuing recovery from the August cyberattack that affected its operations.
- Despite lower sales and significant investments in its brands, the company’s adjusted earnings per share exceeded its own expectations in the said quarter.
- Adjusting for the effects of the cyberattack, the company reported that Q3 sales performance was, for the most part, in line with the management’s expectations.
Sysco Corporation: A Tale Of Improved Profitability Through Strategic Sourcing! – Major Drivers
- Sysco Corporation reported a sequential improvement in restaurant foot traffic over Q3 2024, starting with a tough January and improving throughout the quarter.
- The company noted that traffic, not same-store sales, drives distributor case volume shipments, with Sysco’s 2.9% case growth enabling profitable market share increase for the quarter.
- The company delivered strong earnings growth in a challenging volume environment, delivering adjusted operating income growth of 8.4% while anticipating future improvements in local case volume.
Archer-Daniels-Midland Company: Strengthening Margins Through Operational Improvements & Renewable Production! – Major Drivers
- In its first quarter 2024, Archer-Daniels-Midland (ADM) reported adjusted earnings per share of USD1.46, and an adjusted segment operating profit of USD1.3bn, representing an on-year decrease of 24%.
- ADM also achieved a trailing 4-quarter average of 11.2% for its adjusted Return on Invested Capital (ROIC) during the same quarter, while maintaining a strong balance sheet and healthy cash flows.
- Although the global grain and oilseed supply is expected to increase throughout the year amid an anticipated improvement in weather conditions, ADM proactively managed the risk of falling margins by driving the structural earnings, ROIC, and cash flow generation, enabling the company to continue investing in its business and returning cash to its shareholders.
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