In today’s briefing:
- I-Tail Corporation IPO – Blowout 3Q22, Revised Earnings, Updated Thoughts on Valuation
- Sapphire Foods IPO – Smallish Stock with Big (US$550m) Multiple PE Lockup Expiry
- Bikaji Foods International IPO Trading – One of the Strongest Demand This Year
- I-Tail Corporation IPO: Valuation Insights
- Rally Continues Following Breaks in USD & 10-Yr Yield; Buy Ideas in Energy & Consumer Discretionary
- Hyatt Hotels Corporation: The Find Platform & Other Drivers
- Walt Disney Company: Merchandise Marketing Through Disney+ & Other Drivers
- Riding The Entertainment Boom
- That’s a Wrap, Kura Exits 2022 on a High Note
- Hershey Co: Major Drivers
I-Tail Corporation IPO – Blowout 3Q22, Revised Earnings, Updated Thoughts on Valuation
- I-Tail, an OEM in the wet pet food category, aims to raise around US$600m in its Thailand IPO. It is a subsidiary of Thai Union Group (TU TB) .
- As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
- In our previous notes, we have looked at various aspects of the deal. In this note, we talk about its 3Q22 updates and run the deal through our ECM framework.
Sapphire Foods IPO – Smallish Stock with Big (US$550m) Multiple PE Lockup Expiry
- In Nov 2021, Sapphire Foods Limited (SFL), one of Yum Brand’s franchisees in the Indian subcontinent, raised around US$280m in its Indian IPO.
- The lock-up on its shareholders will expire soon, with a number of PE funds on its register
- In this note, we will talk about the upcoming lockup expiry.
Bikaji Foods International IPO Trading – One of the Strongest Demand This Year
- Bikaji Foods (BIKAJI IN) , an ethnic snacks company, raised approximately US$107m in its India IPO.
- Its product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks which primarily include gift packs, frozen food, mathri range and cookies.
- We have looked at various aspects of the deal in our previous notes. In this note, we talk about the demand for the deal and the trading dynamics.
I-Tail Corporation IPO: Valuation Insights
- I-Tail (ITC TB), Thai Union Group (TU TB)’s pet care division, has launched its SET listing at THB30-32 per share to raise up to US$593 million.
- We previously discussed the IPO in I–Tail Corporation IPO: The Bull Case, I-Tail Corporation IPO: The Bear Case and I-Tail Corporation IPO: A Strong 3Q Results Update.
- I-Tail is attractively valued at the IPO price range. We would participate. Pricing will be announced on 28 November.
Rally Continues Following Breaks in USD & 10-Yr Yield; Buy Ideas in Energy & Consumer Discretionary
- Our Russell 2000 (IWM) and S&P 500 targets for this rally have been the 200-day MAs, coinciding with YTD downtrends.
- The Russell already hit this target while the S&P is closing in, less than 1% away.
- Still, the vast majority of signals point to further upside ahead for the market indexes, and a possible end to the bear market.
Hyatt Hotels Corporation: The Find Platform & Other Drivers
- Hyatt delivered a strong performance in the quarter and managed to surpass Wall Street expectations in terms of revenues as well as earnings.
- With outstanding bookings for upcoming periods during the quarter, group room revenue also saw growth during the third quarter.
- Besides, they launched The Find platform, a new experiences platform, for members of its World of Hyatt loyalty program.
Walt Disney Company: Merchandise Marketing Through Disney+ & Other Drivers
- Disney had highly disappointing quarter and failed to meet the market expectations in terms of revenues as well as earnings.
- The quarter saw the company reaching the highest point in DTC operating losses to date which is why operating margins were significantly below analyst expectations.
- This quarter was strong for products, experiences, and parks that continue to deliver good results despite Hurricane Lan.
Riding The Entertainment Boom
- Online Ticketing platform SeatGeek has seen a surge in demand from the pandemic reopening, as consumers have spent extravagantly on entertainment experiences such as concerts, theatre, and sporting events.
- With fewer live events and supply shortages due to prevailing scalpers, fans have increasingly turned to online resellers to access these experiences.
- However, the company is now expected to face significant challenges, including a slowdown in demand and a regulatory crackdown from the government limiting the potential fees that can be charged.
That’s a Wrap, Kura Exits 2022 on a High Note
- Despite now being valued at ~$635 million (down ~32% from ATHs) Kura Sushi, the small-time restaurant operator with 40 stores across the United States, continues to boast an overzealous market valuation.
- Perhaps it’s their ability to consistently beat expectations. Perhaps it’s because they remain undercovered and somewhat illiquid for their size (the parent organisation owns a considerable amount of outstanding shares).
- I can’t be sure, nor do I really care. After reporting Q4 earnings last week, Kura rounded off the year in style, continuing to demonstrate a healthy recovery in demand for their service.
Hershey Co: Major Drivers
- Hershey had a decent result and managed to deliver another all-around beat despite the impact of inflationary headwinds and supply chain issues.
- The company managed to produce a substantial volume growth despite price increases to counter inflation.
- The consumer continues to place a high priority on snacks, especially sweet sweets which is why the trends within their categories have really held strong.
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