Daily Brief Consumer: Midea Group Co Ltd A, Dream International, Tcl Multimedia Technology, Greggs PLC, Hilton Grand Vacations and more

• Midea Group Co Ltd A (000333 CH) posted strong 4Q23 results, with net profit up 18% yoy and sales up 10% yoy. 
• In terms of 2024 outlook, management targets a 5-10% yoy growth in both the top and bottom line. 
• The stock is has rerated up to 12x 2024E earnings, compared to an average of 13x over the last 10 years. 

• We like Dream International (1126 HK), the plush toy maker listed in HK for its long-term association with Disney and revenue growth profile (12% CAGR over 15 years).
• The 15-year ROE has averaged 18%, and the company currently has 40% of the market capitalization (1.3 bn HKD) in net cash on the balance sheet. 
• Trading at 3.7x FY23 PE, with a 12% dividend yield (and the company’s high likelihood of maintaining a payout ratio), this is an idea worth exploring.

• Spirits were high as we attended the TCL Electronics (1070.HK ) (“TCL”) investor conference last Thursday (28 March) at the Shangri-La in Hong Kong, following its after-market earnings release.
• The results topped our own expectations in some areas, which we outlined in our recent write-up on the Company .
• We decided to summarize the results, as well as management insights shared at the conference for added context.

The second full year of Greggs’ five-year growth plan to double revenue by FY26 should be marked down as very successful, especially so given the challenging external environment. Unlike many consumer-facing companies, high selling price inflation was accompanied by volume growth, leading to good market share gains. The consumer is responding well to new initiatives to grow revenue in new dayparts and digital channels. Profitability was well-managed with better recovery of input cost inflation than FY22. We look for more of the same in FY24, which will be a significant year from a capital investment perspective, and beyond.

• VIC has featured HGV multiple times, with the latest update in April 2021
• Stock price has remained stagnant, but potential upside of over 100% in next 2-3 years
• HGV became independent in 2017, acquired Diamond Resorts International in August 2021, and Bluegreen Vacations in November 2023, becoming the largest timeshare operator

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.