In today’s briefing:
- Coway Is a Prime Candidate for Corporate Activism in Korea
- The Real Goal of a Company that Wants to Remain in Prime Market Is to Remain in TOPIX
- Sonos Inc: New Launches & Other Drivers
- Lululemon Athletica: Major Drivers
- Restaurant Brands International: Major Drivers
- Skechers USA Inc: Major Drivers
Coway Is a Prime Candidate for Corporate Activism in Korea
- In this insight, we discuss the major reasons why Coway Co Ltd (021240 KS) is a prime candidate for corporate activism in Korea.
- Netmarble has done a poor job with Coway post its acquisition in 2019.
- An action plan for Coway is to return at least half of its net profit through dividends and share buybacks/cancellations.
The Real Goal of a Company that Wants to Remain in Prime Market Is to Remain in TOPIX
- Since simply increasing shareholder returns won’t increase corporate value/market cap, it’s more natural to present shareholder return policy together with reasonable earnings target, even when such policy is put forth.
- In fact, the companies exemplified in the Nikkei article saw share prices rise for companies with positive earnings outlooks and increased conviction that they will meet their medium-term earnings targets.
- This is a more serious and urgent issue for transitional companies, as companies with market cap of less than 10 billion yen in October 2023 will be excluded from TOPIX.
Sonos Inc: New Launches & Other Drivers
- Sonos delivered a decent performance in the last quarter with revenue growth beyond market expectations and narrower-than-expected losses despite the challenging macroeconomic backdrop.
- In the last quarter, installer solutions revenue grew, driven by robust demand for the company’s Port and Amp products in spite of persistent supply challenges.
- Sonos continues to see strong performance in its installer solutions channel in spite of slowing house activity in the United States.
Lululemon Athletica: Major Drivers
- Lululemon’s results for the last quarter continued to be strong and the company produced an all-around beat despite the fact that the external environment remains challenging.
- In terms of traffic driven and revenue, Black Friday was among the biggest days for the company.
- The revenue growth of Lululemon remained balanced and strong across various drivers, and the company’s market share gains continued.
Restaurant Brands International: Major Drivers
- Restaurant Brands delivered a positive set of results in the last quarter, surpassing Wall Street expectations in terms of revenues as well as earnings.
- It delivered a strong performance across Tim Hortons Canada and Burger King International businesses.
- Improvements in the U.S. at Burger King, Popeyes, and Firehouse Subs were significant.
Skechers USA Inc: Major Drivers
- With the Skechers results just around the corner, it would be interesting to see how the company has performed in the previous quarter.
- Last quarter, the company set a new quarterly sales record of $1.88 billion which was well above Wall Street expectations.
- Its direct-to-consumer and wholesale businesses experienced double-digit growth given the strength in their retail stores and digital platforms.
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