In today’s briefing:
- Kanzhun (2076 HK): A Monitor of Job Market in China
- Three IPO Candidates of the Dongwon Group (StarKist, Dongwon Loex, and Dongwon Home Food)
- Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power
- Gree (000651 CH): Resilient Fundamentals; Rerating Potential In A Low Interest Rate Environment
- Adidas: All The Ingredients To Win
- U.S. Dollar (DXY) And Treasury Yields Breaking Out; Growing Number of Index/Sector Breakdowns
Kanzhun (2076 HK): A Monitor of Job Market in China
- Kanzhun or Boss Zhipin, is the largest online recruiting platform for white collar workers.
- Users exceeded servers’ capacity for the third time this year.
- The positive signal is that recruiters began to grow in 2Q23.
Three IPO Candidates of the Dongwon Group (StarKist, Dongwon Loex, and Dongwon Home Food)
- It was reported in the local Korean media that the Dongwon Group is considering on listing three private companies including Starkist, Dongwon Loex, and Dongwon Home Food.
- Prior to their IPOs, Dongwon Group is reviewing the potential of selling partial stakes in these companies in pre-IPO investments.
- One of the major purposes of the IPOs would be to gain access to more capital which could be used by the Dongwon Group to acquire HMM.
Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power
- Japanese inflation, which peaked at 4.3% in January 2023, gradually decreased to 3.5%, 3.2%, 3.3%, 3.3%, and 3.2% in the subsequent months of 2023.
- Inflation rates remained stable for most items, excluding Fuel, Electricity, Water, and fresh vegetables, indicating the persistence of cost-push inflation.
- In this insight, we analyze the recent quarterly performance of Yakult, Nissin, and Seven & I, Japanese Consumer Staples companies discussed in our prior Smartkarma Original.
Gree (000651 CH): Resilient Fundamentals; Rerating Potential In A Low Interest Rate Environment
- Gree Electric Appliances (000651 CH) trades at the lowest valuation multiple among the three major home appliance companies in China, at 7x forward PE and 7% forward yield.
- Investment case rests on stable earnings growth and high dividend payout and yield, which works well in a low interest rate environment in China.
- Resiliency of earnings for Gree is under-appreciated by the market, making rerating possible.
Adidas: All The Ingredients To Win
- Adidas has all the ingredients to win: “a great brand, credibility, authenticity, innovation, collaborations, talented people, and a global network”.
- Adidas operates in a highly attractive industry as it benefits from a structural growth from sports, which is playing an increasingly important role in more and more people’s lives
- Although 2023 is a transition year, the following years are very promising in terms of sales, margins, and earnings development.
U.S. Dollar (DXY) And Treasury Yields Breaking Out; Growing Number of Index/Sector Breakdowns
- We’ve expected to see 4300-4325 act as major support on SPX, while also expecting consolidation between 4300-4325 support and 4600 resistance until the end of September, and possibly longer.
- Still possible this 4300-4325 support holds, but odds of a deeper pullback to SPX 4165-4200/the 200-day MA have increased following major breakouts in the U.S. dollar (DXY) and Treasury yields
- Also adding to concerns: 1+ year uptrend violations on $IWO/$IWP, and breakdowns below 34,280 on the Dow, $180 on IWM, $472 on SOXX, $81 on ITB, and $104-$105 on XLI
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