In today’s briefing:
- HSTECH Index Rebalance Preview: Round-Trip Trade of US$556m in December
- Starbucks (SBUX): Another Monitor of China Consumption
- China Tourism Group Duty Free (1880 HK): Weak Golden Week Trends And Still Expensive
- Devyani International Ltd- Forensic Analysis
- Lalatech IPO: 1H2023 Numbers Point to Strong Improvement in Financials
- Vertex Ventures Leads Indian D2C Beauty Startup’s $20m Series B
- Genuine Parts Company: How Strategic Initiatives Are Creating Unprecedented Value! – Major Drivers
- Pre-IPO Guoquan Food (Shanghai) – High Growth May Not Be Sustainable; Long Logic Doesn’t Hold Water
- CarMax Inc.: Unveiling 4 Strategic Moves Propelling Future Success Amid Market Chaos! – Major Drivers
- The Interpublic Group of Companies: Are The New Tech & AI-Driven Partnerships A Potential Growth Catalyst? – Major Drivers
HSTECH Index Rebalance Preview: Round-Trip Trade of US$556m in December
- With no stocks in inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in December.
- Capping changes will result in a one-way turnover of 2.16% and that will result in a round-trip trade of US$556m.
- The impact of capping changes has doubled over the last month and there will be more changes from now till the official capping is done on 28 November.
Starbucks (SBUX): Another Monitor of China Consumption
- In June quarter Starbucks comparable store sales increased 46% YoY and reached to 80% of the level in the same period of 2021.
- China revenue increase purely came from transaction, but not average ticket.
- We believe Starbucks China data can be a good monitor of Chinese economy.
China Tourism Group Duty Free (1880 HK): Weak Golden Week Trends And Still Expensive
- China Tourism Group Duty Free (1880 HK) announced preliminary results for 3Q23 which came in below market expectations.
- Compared to the previous quarter 2Q23, sales declined by 1% q-o-q, while net profit margin declined from 10.4% in 2Q23 to 8.9% in 3Q23.
- The company (H-share) is trading at 26x 2023E PE and 23x 2024E PE, still expensive as visibility is low and derating continues.
Devyani International Ltd- Forensic Analysis
- Devyani International (DEVYANI IN) is one of the largest franchisee of Yum! Brands Inc (YUM US) in India and operates brands like KFC, Pizza Hut and Costa Coffee, etc.
- After a turbulent pandemic, the company has reported growth in topline and robust profitability in F22 and F23. But, these have been boosted by several one-off items.
- The company also faces difficulty in generating positive FCFs while we also remain caution about the Nigerian Operations and the associated forex losses.
Lalatech IPO: 1H2023 Numbers Point to Strong Improvement in Financials
- Lalatech has refiled for HKEx IPO and the company plans to raise around US$1bn through the IPO. This insight focuses on latest data points from the company’s new filing.
- The company has disclosed results for 1H2023 which point to notable improvement in the company’s financials including an operating profit margin of around 21% for 1H2023.
- There has been significant reduction in the company’s operating costs, merchant discounts and carrier incentives in particular, which have helped significant improve the company’s margins.
Vertex Ventures Leads Indian D2C Beauty Startup’s $20m Series B
- With rising urbanization and increased social media exposure to global beauty trends, India’s beauty and personal care market is now set to hit US$38 billion in value by 2028.
- A big part of that growth has come from direct-to-consumer brands: in the past four to five years, over 80 of them have emerged, accompanied by a wave of investments.
- One of these D2C players is Pilgrim, which recently raised US$20 million in a series B funding round led by Vertex Ventures Southeast Asia and India.
Genuine Parts Company: How Strategic Initiatives Are Creating Unprecedented Value! – Major Drivers
- Genuine Parts Company delivered mixed results for the previous quarter, with revenues below the analyst consensus.
- The company reported total sales of $2.3 billion for the quarter, marking an impressive increase of $125 million.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Pre-IPO Guoquan Food (Shanghai) – High Growth May Not Be Sustainable; Long Logic Doesn’t Hold Water
- Guoquan’s model is easy to replicate.The so-called “moat” is all based on scale effects, without which Guoquan would lose competitiveness.This is why Guoquan has been striving to expand franchised stores.
- With the increasing frequency of people dining out after China reopens, the high-speed expansion in 2020 seems unsustainable. To B model has less growth space/potential than To C model.
- In such a fiercely competitive market, Guoquan’s long-term development logic is not solid. The current temporary improvement in financial performance is likely to be a flash in the pan.
CarMax Inc.: Unveiling 4 Strategic Moves Propelling Future Success Amid Market Chaos! – Major Drivers
- CarMax, Inc. delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
- Despite ongoing challenges in the market, the company’s strategic actions have yielded positive outcomes and positioned it for future success.
- In the quarter, CarMax’s diversified business model generated total sales of $7.1 billion, attributed to lower retail and wholesale volume and prices.
The Interpublic Group of Companies: Are The New Tech & AI-Driven Partnerships A Potential Growth Catalyst? – Major Drivers
- Interpublic Group of Companies delivered a mixed set of results for the previous quarter with revenues below the analyst consensus.
- The company reported a 1.7% decrease in organic revenue before billable expenses in the second quarter of the year, compared to the 7.9% organic growth in the same quarter of the previous year.
- Despite these challenges, Interpublic Group of Companies observed growth in areas such as media offerings, healthcare, public relations, and experiential offerings.
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