In today’s briefing:
- Hotel Shilla: Wins New License to Operate Duty Free at Incheon International Airport for 10 Years
- Herbalife Nutrition: Controversial But Undervalued
- (Mostly) Asia M&A, April 2023: Arcland Service, Lian Beng, Silk Laser, Breaker Resources, Blackmores
- Constellation Brands Inc.: Inflation Playing Spoilsport? – Key Drivers
- (Mostly) Asia-Pac Weekly Risk Arb Wrap: Blackmores, Metro Pacific, Invocare, AAG Energy, Jiangnan
- AutoZone Inc.: New Distribution Centres & Other Growth Initiatives Paying Off? – Key Drivers
- The Reasons for the Criteria Selected for the Directors’ Skills Matrix Are Still Unclear
- Wynn Resorts: Non-Gaming Businesses Leading The Recovery? – Key Drivers
Hotel Shilla: Wins New License to Operate Duty Free at Incheon International Airport for 10 Years
- We expect the consensus to increase their operating profit estimates for Hotel Shilla in 2023 and 2024 by as much as 10-20% in 2023 and 2024.
- Higher earnings will likely be driven by Hotel Shilla winning new licenses to operate duty free at the Incheon International Airport and much better than expected profits in 1Q 2023.
- With improved momentum (both operationally and share price basis), we think that the Hotel Shilla (pref) could outperform Hotel Shilla (common) in the coming weeks.
Herbalife Nutrition: Controversial But Undervalued
- Herbalife has a strong position in the wellness industry, with net sales of $5.2b in 2022 and a market cap of $1.46b.
- The company was founded in 1980, and it employs an estimated 9,900 people worldwide.
- First, the company has a strong brand name and loyal customer base, which can support long-term growth prospects for Herbalife Nutrition (NYSE:HLF).
(Mostly) Asia M&A, April 2023: Arcland Service, Lian Beng, Silk Laser, Breaker Resources, Blackmores
- For the month of April, 6 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
- The average premium for the new deals announced (or first discussed) in April was 23%.
- This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.
Constellation Brands Inc.: Inflation Playing Spoilsport? – Key Drivers
- Given the impact of inflationary headwinds encountered throughout the year, Constellation Brands’ financial performance was not up to expectations.
- The company delivered a 7% increase in net sales in the quarter which was below expectations along with a 3% increase in comparable operating income which resulted in an earnings beat.
- Constellation Brands achieved record net sales of $9.5 billion and equivalent operating profits of $3 billion for the year.
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Blackmores, Metro Pacific, Invocare, AAG Energy, Jiangnan
- There are 39 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Two new deals were discussed on Smartkarma this past week: Kirin (2503 JP)‘s Offer for Blackmores (BKL AU); First Pacific (142 HK) & Co’s Offer for Metro Pacific (MPI PM).
- Key updates took place for Invocare Ltd (IVC AU), AAG Energy Holdings (2686 HK), and Jiangnan (1366 HK)
AutoZone Inc.: New Distribution Centres & Other Growth Initiatives Paying Off? – Key Drivers
- AutoZone exited the quarter with normalized growth rates.
- It generated growth in domestic, commercial and retail same-store sales.
- Also, the retail transactions improved meaningfully for this quarter but were down 2.2%, while the commercial transactions were up.
The Reasons for the Criteria Selected for the Directors’ Skills Matrix Are Still Unclear
- The rapid spread of companies, especially large companies, disclosing the skills matrix was triggered by Supplemental Principle 4-11-(i), which was added to the Corporate Governance Code.
- While more companies focus disclosure on skills matrix of directors, it’s questionable whether these criteria have been validated to select those who can help expand the value of the company.
- The process should ensure that the nomination process is based on the skills needed to run the company, not on who is close to the president of the company.
Wynn Resorts: Non-Gaming Businesses Leading The Recovery? – Key Drivers
- Wynn Resorts delivered a disappointing result with wider than expected losses in the last quarter.
- Despite still suppressed international play in the quarter, the table drop of Wynn was up.
- Wynn is quickly advancing its planning for Wynn AI Marjan Island, the company’s integrated resort in UAE.
💡 Before it’s here, it’s on Smartkarma
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