In today’s briefing:
- Oriental Land: Modest Price Reaction to Revised Guidance Indicates a Breakdown Is Imminent
- Mercari – Q1 23 Results Reaction: Strong Domestic Drives OP Beat but Spending to Rise
- Vitasoy (345): Time to Bounce
- Kino Indonesia (KINO IJ) – Staples with a Discretionary Edge
- COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks
- The Coca-Cola Co: Major Drivers
- Gaussian Robotics: Leading Provider of AI-Powered Cleaning Robots
- Trent Ltd: Trending Multi-Brand, Multi-Format Retailer. Value Fashion to Home Grocery
- COP27: Despite Limited Expectations There Are Several Potential Bright Spots
- GTX: Free Cash Flow and Win Rate
Oriental Land: Modest Price Reaction to Revised Guidance Indicates a Breakdown Is Imminent
- Oriental Land (4661 JP) raised its FY23 revenue and OP guidance by 8.4% and 59.4% respectively last week sighting a recovery in demand for leisure during the second-half of the year.
- The modest price reaction to upgraded guidance could be an indication that a breakdown is imminent.
- Cost overruns of ¥70bn and a delay to the scheduled opening of Fantasy Springs from FY23 to FY24, could force investors to second guess consensus medium-term expectations.
Mercari – Q1 23 Results Reaction: Strong Domestic Drives OP Beat but Spending to Rise
- Domestic results were better than we expected driving operating income to its highest level in six quarters. Management will launch credit card services to boost fintech exposure
- The US business remains a drag on results with platform sales down 5% YoY and expanding operating losses. A downgrade to expectations is likely in the quarters ahead
- Q1 results were better than we expected but a weak US business and higher spending ahead may disappoint markets that bid shares 28% higher over the last month
Vitasoy (345): Time to Bounce
- Vitasoy Intl Holdings (345 HK) was shunned by investors last year as its products were taken off the shelves in China, causing its revenue from China to plummet.
- Recently announced a substantial increase in net profit vs last year.
- Despite the recent uptick, Vitasoy’s share price is still trading at 50% PBR vs 5 years ago.
Kino Indonesia (KINO IJ) – Staples with a Discretionary Edge
- Kino Indonesia (KINO IJ) is one of Indonesia’s most interesting staples players with a strong share in a number of segments within beverages and personal care which dominate its sales.
- The company has seen a decent rebound in its beverages business as mobility has improved but continues to face some headwinds from higher input costs and packaging for personal care.
- Kino Indonesia (KINO IJ) has been selectively increasing prices to offset higher costs and is seeing an improvement in sales of some of its more discretionary products.
COP27: Agriculture and Food Stocks Likely to Be Most Affected by Conference Talks
- COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.
- Whereas climate mitigation and clean energy were the main focus of prior conferences, climate adaptation and sustainable agriculture and food are top priorities for the COP26 Presidency.
- Therefore, agriculture and food stocks are poised to be the most impacted on a relative basis by COP27 proceedings and outcomes. This Insight considers the potential “winners and losers.”
The Coca-Cola Co: Major Drivers
- Despite a macroeconomic environment that remained difficult in the third quarter, Coca-Cola managed to deliver yet another all-around beat.
- Utilizing their customer-centric marketing strategy, they are rapidly connecting consumption occasions with passion points through digital engagement.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Gaussian Robotics: Leading Provider of AI-Powered Cleaning Robots
- Gaussian Robotics sells a new generation of autonomous cleaning robots that can be applied in office buildings, shopping malls, indoor galleries, hotels, schools, healthcare facilities, and warehouses.
- Shanghai-Based unicorn wants to disrupt the cleaning industry with automation, promoting the use of low-cost autonomous cleaning robots worldwide.
- The company owns the world’s most advanced commercial cleaning robot portfolio offering cost-effective smart robotic solutions to 2,000+ customers in 40+ countries across 6 regions.
Trent Ltd: Trending Multi-Brand, Multi-Format Retailer. Value Fashion to Home Grocery
- Trent Ltd (TRENT IN), one of India’s leading apparel retailers led by the Tatas, is on an accelerated growth path helped by its recently expanded apparel retail chain, Zudio.
- Zudio sells value fashion through its own stores targeted at India’s burgeoning youth that is high on aspiration while low on budget, a hitherto severely underserved category.
- Star Bazaar, Trent’s grocery retail JV with Tesco PLC (TSCO LN), is also beginning to gain traction and has the potential to expand and grow its presence across the country.
COP27: Despite Limited Expectations There Are Several Potential Bright Spots
- COP27, the 27th annual United Nations international conference on climate change, starts on 6 November and runs through 18 November – in the Egyptian coastal city of Sharm el-Sheikh.
- World leaders and delegations from 196 nations and territories are expected to collaborate on a host of issues such as finance, decarbonisation, agriculture, water, energy, and biodiversity.
- Overall expectations are being kept in check, but COP27 is likely to focus on climate adaptation and sectors like agriculture/food that heretofore have taken a back seat to clean energy.
GTX: Free Cash Flow and Win Rate
- GTX experienced a recovery in its order trends from all segments in the third quarter leading to the Company reporting sales exceeding our expectations
- GTX reported third quarter sales of $945 million compared to our lowered forecast of $908 million
- GTX’s foray into EVs should have a positive impact on GTX’s sales and stock valuation. Investors have not been valuing GTX on the basis for having exposure to EVs
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