In today’s briefing:
- ANTA Sports Investor Day Targets DESCENTE (8114) For Growth
- Macau Casinos: MGM China Looks Solid
- India – Free Float Changes to Drive Passive Inflows
- Las Vegas Sands: A Clear Cut Buy on the Dip Strategy as Asia Gaming Recovery Gains Strength
- Sariguna Primatirta (CLEO IJ) – Pure Water with a Sustainable Edge
- AutoNation Drops from the Race
ANTA Sports Investor Day Targets DESCENTE (8114) For Growth
- Yesterday, Anta Sports Products (2020 HK) held its Investor Day in Beijing. They talked about Descente Ltd (8114 JP) and their plans.
- The presentation made by the Descente China Chairman talked about the evolution of performance and the target for 2026, suggesting higher profit now and growth going forward than market expectations.
- None of this changes my outlook for why Itochu Corp (8001 JP) is buying Descente shares in the market. And the stock is going up.
Macau Casinos: MGM China Looks Solid
- Macau’s mass GGR in 3Q23, including slots, was down just 6.7% on 3Q19 levels, but up 11.1% quarter-on-quarter.
- The shifting regulatory sands across the gaming landscape has resulted in VIP baccarat revenue accounting for 24% of GGR in 3Q23, down from 43.8% in 3Q19, and 64.6% in 3Q13.
- All concessionaires have been impacted by the collapse of the junket industry. But those who relied less on VIP flow have fared better on a comparative basis.
India – Free Float Changes to Drive Passive Inflows
- Over the last few weeks, companies in India have been disclosing their shareholding pattern as of end-September. There are a few companies with significant float changes from end-March and/or end-June.
- The changes in free float could be reflected in domestic and global indices over the next couple of months resulting in action from passive trackers.
- We find 9 stocks where there could be inflows with passive trackers needing to buy over 1 day of ADV on most stocks.
Las Vegas Sands: A Clear Cut Buy on the Dip Strategy as Asia Gaming Recovery Gains Strength
- Our long held strong conviction on LVS has not faltered despite its chronically undervalued.
- Monthly gross gaming win trends do not reflect sagging China economy.
- Imminent 3Q23 earnings release may well hold upside surprises. We sense a beat.
Sariguna Primatirta (CLEO IJ) – Pure Water with a Sustainable Edge
- Sariguna Primatirta (CLEO IJ) is a differentiated bottled water player in Indonesia producing pure water using nano-technology, with around 5% market share but with significant upside given low penetration.
- The company has established a long-term growth record over the past six years and booked +14.9% sales growth and +23.2% net profit growth, driven by increased demand and new products.
- CLEO continues to expand its manufacturing and distribution to cover more areas of the country. It also has an increasingly sustainable edge and valuations are reasonable relative to growth.
AutoNation Drops from the Race
- On 17 October, Autonation Inc (AN US) also withdrew its proposal for Pendragon PLC (PDG LN). Lithia’s deal is likely to obtain shareholder’s approval, for lack of a better offer.
- Holding on would mean receiving 24.5p and staying in a small cap SaaS, whose shares are implicitly valued at 6.5p, instead of the 10.9p that Pendragon claims it is worth.
- Readacross: Hedin, AutoNation, or someone else, could take a closer look at Vertu Motors (VTU LN).
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