In today’s briefing:
- Playmates Toys: TMNT Movie Grosses 50M+ Global Sales in Opening Week, Toy Sales to Follow
- Vinda International (3331 HK): Worst Is Likely Over
- Yakult: At Its Lowest PE Since Before the Global Financial Crisis
- Why SHEIN and Temu Are Worried About Reform of De Minimis Imports into the US
- Bajaj Auto Ltd (BJAUT IN) | The Market Dominance Playbook
- No Consistent Relationship Between Executive Compensation and Stock Price/ Earnings Has Been Seen
- Samvardhana Motherson – ESG Report – Lucror Analytics
- Tractor Supply Company: How They’re Continuing To Have Positive Comps! – Major Drivers
- International Housewares Retail Co Ltd (1373 HK) – Weak End to FY23, Q1 FY24 Improving
Playmates Toys: TMNT Movie Grosses 50M+ Global Sales in Opening Week, Toy Sales to Follow
- Teenage Mutant Ninja Turtles: Mutant Mayhem had a smash opening grossing over 50M USD at the box office in its first week of operation.
- The box office success de-risks the upside potential for Playmates Toys as successful movies have a high likelihood of driving toy sales.
- Paramount+ launching the new TMNT-inspired series will also drive Ninja Turtles’ revival even more.
Vinda International (3331 HK): Worst Is Likely Over
- According to various public news sources, Brazil’s Suzano SA, the world’s largest pulp maker, and a few private equity players may participate in the bidding for Vinda International (3331 HK).
- Note that the controlling shareholder Essity is looking to potentially dispose its stake, announced in April this year.
- Two major drivers of share price – pulp price and competition – likely have reached the bottom and could improve in 2H23.
Yakult: At Its Lowest PE Since Before the Global Financial Crisis
- Yakult Honsha (2267 JP)‘s OP fell short of market expectations by ¥500 million in 1QFY24, leading to a 15% drop in the company’s share price.
- With the post earnings price reaction, Yakult’s FY+2 PE has fallen to its lowest level since before the global financial crisis, currently standing at around 18.7x.
- We think this price reaction is unwarranted as the fundamentals haven’t changed. Thus, creates an opportunity for short-term gains by staying bullish on the stock.
Why SHEIN and Temu Are Worried About Reform of De Minimis Imports into the US
- SHEIN announced it wants a role in reforming US de minimis import regulations
- A tightening of de minimis threshholds could undermine SHEIN (and Temu) in the US
- The de minimis issue highlights SHEIN’s and Temu’s lack of political allies in the US
Bajaj Auto Ltd (BJAUT IN) | The Market Dominance Playbook
- Triumph-Bajaj midsize bike melds the expertise of Triumph Motorcycles and Bajaj Auto Ltd (BJAUT IN) for top-tier quality, targeting the midsize market with dual-brand prowess.
- Triumph-Bajaj sparks fervour with strong inquiries and bookings in tier-two and tier-one locations, though supply constraints present challenges.
- Triumph stands out targeting the 30+ age group seeking premium leisure riding, employing exclusive dealerships and unique pricing to enhance ownership experience.
No Consistent Relationship Between Executive Compensation and Stock Price/ Earnings Has Been Seen
- Managers/Executives should receive compensation that is appropriate to increase corporate value and stock price, and executive compensation should be tied to the realization of corporate value and stock price growth.
- Not many companies have been able to increase their corporate value by hiring global talent on their boards like Hitachi, MUFG, Mitsui & Company, and Daikin.
- Currently, the relationship between executive compensation and corporate value is inconsistent. The optimal proportion of variable compensation and the acquisition/utilization of global human resources to strengthen competitiveness will be key.
Samvardhana Motherson – ESG Report – Lucror Analytics
- Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
- We assess Samvardhana Motherson’s (SM) ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Weak”.
- The score is based on the ESG reporting of parent Motherson Group (encompassing ultimate parents Samvardhana Motherson International Limited and Motherson Sumi Systems Limited), which reports ESG on a consolidated level without providing meaningful details at the SM level.
Tractor Supply Company: How They’re Continuing To Have Positive Comps! – Major Drivers
- Tractor Supply Company’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
- Consumer spending continues spending in favor of services and they continue pulling back on discretionary purchases.
- On the real estate front, TSCO opened seventeen new Tractor supply stores in the quarter and 3 Petsense by Tractor supply stores.
International Housewares Retail Co Ltd (1373 HK) – Weak End to FY23, Q1 FY24 Improving
- International Housewares Retail (1373 HK) reported weaker than expected numbers, with revenues down 3% YoY and profits down 18% YoY for FY23 (down 10%/42% for H2 FY23).
- The cause for the decline was the roll-off in COVID-related subsidies worth 30 mn HKD and weak revenues in Q4 FY23 owing to a surge in outbound travel.
- The company declared a 10-cent final dividend ( Full Year: 22 cents). Post the correction in share price, it represents an 8.3% dividend yield.
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