In today’s briefing:
- Jubilant Foodworks Vs Devyani International | When the Going Gets Tough
- Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals
- Japan Tobacco (2914) | Time to Work the Balance Sheet
- Dissolving the Parent-Subsidiary Listing Is a Powerful Way to Increase Valuations?
- IPAR: Fragrance of a Price Target Increase
- General Mills: I Am Once Again Bullish And Have 2 Areas Investors Should Watch Closely
- Kimberly-Clark: Short-Term Tailwinds Dissipate
Jubilant Foodworks Vs Devyani International | When the Going Gets Tough
- Devyani International (DEVYANI IN) has outperformed Jubilant in terms of growth, revenue, and EPS.
- Devyani International (DEVYANI IN)’s focus on KFC and Costa Coffee benefits from the “Dine In” trend, while Jubilant faces increased competition.
- DEVYANI’s plans to double store count and penetrate underrepresented categories justify its premium over Jubilant Foodworks (JUBI IN) .
Samyang Foods: KOSPI 200 Inclusion & Improving Fundamentals
- On 20 February, KRX announced that effective 13 April 2023, Samyang Foods will be included in the KOSPI 200 index and Hyundai Greenfood will be excluded.
- We have a positive view on Samyang Foods and we believe this stock will outperform KOSPI leading into the week of KOSPI 200 inclusion (13 April).
- We think that expectation will play a bigger role and some investors may choose to buy this stock ahead of the actual inclusion date.
Japan Tobacco (2914) | Time to Work the Balance Sheet
- The balance sheet is in great shape and could fund a much more aggressive growth strategy (or higher shareholder returns)
- JT lags peers in the higher growth vape & oral markets. Ploom X needs investment to be a global hit. The balance sheet can easily fund both
- Why bullish? The stock is trading cheap and offering a higher yield than its five-year average
Dissolving the Parent-Subsidiary Listing Is a Powerful Way to Increase Valuations?
- While this was a major step forward, it did not adequately explain how Fujitsu would invest the cash from the sale of these non-core businesses in its core businesses.
- The investment strategy of buying listed subsidiaries with parent-subsidiary listings was shown to be reasonable. The exit risk may be lower when the parent makes the subsidiary a wholly-owned subsidiary.
- If valuations are enhanced by expectations of increased corporate value through reviews of the parent’s business portfolio, the dissolution of the parent-subsidiary listing is a powerful way to enhance valuations.
IPAR: Fragrance of a Price Target Increase
- Since our last update in January 2023, Inter Parfums (IPAR) has released its preliminary fourth quarter sales results and there has been more data affirming consumer demand for fragrances
- The reopening of China was earlier than IPAR’s management’s forecasts, which could have a material boost to sales in 2023.
- The addition of Lacoste to the product portfolio remains the catalyst for 2024 sales growth
General Mills: I Am Once Again Bullish And Have 2 Areas Investors Should Watch Closely
- General Mills continued to outperform the market, in spite of the sharp drop in share price in recent months.
- The company now trades closer to fair value, but weakness in the pet food segment was largely unexpected.
- The drop in volumes is unsettling, but the company now trading closer to a fair value.
Kimberly-Clark: Short-Term Tailwinds Dissipate
- Kimberly-Clark’s stock has enjoyed a brief period of at-par performance with the rest of the equity market.
- Some of the tailwinds that made this rally possible are dissipating and are unlikely to provide a sustainable tailwind for shareholders.
- In recent years, it has been next to impossible to conceive a long investment thesis for Kimberly-Clark (NYSE:KMB).
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