Daily Brief Consumer: Pop Mart International Group L, Pepsico Inc, TSE Tokyo Price Index TOPIX, Nippon Suisan Kaisha, Xponential Fitness , Guess? Inc, WK Kellogg , Dowlais Group and more

• The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
• This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
• The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 

• PepsiCo is a global company with significant presence in both snacks and beverages, generating around $80 billion in revenue
• Despite the impact of COVID-19 on its business, PepsiCo has maintained strong performance
• The company’s Beverages North America segment contributes a third of sales but only 22% of EBIT, while Frito Lay North America accounts for 25% of sales but 50% of EBIT

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.

• In the past, value traps were macro environment that couldn’t generate profits in deflationary economy, and micro problem of managers who didn’t listen to constructive management improvement proposals from investors.
• The introduction of Stewardship Code and Corporate Governance Code, and TSE’s request for change in awareness of companies, has reduced the risk of activist investors’ investment strategies flailing around in vain.
• Management awareness has just begun to change, and few companies generate intrinsic value, as evidenced by the fact that ROE hasn’t begun to improve. Activist investors will continue taking interest.

• Nippon Suisan Kaisha (1332 JP) reported 8% YoY revenue growth in 9MFY23, driven by 17% YoY growth in food products business on higher commercial volume and prices.
• However, marine products profits tumbled 39% YoY on weakening fish prices and accounting adjustments.
• The company raised FY23 sales and operating profit guidance to ¥825B (up 7% YoY) and ¥29B (up 18% YoY), respectively.

• Xponential Fitness has shown strong financial performance post IPO, with adjusted EBITDA increasing significantly
• The company faced a coordinated short attack leading to a major drop in share price in 2023
• Shares are currently undervalued with strong growth potential and valuable assets, making it an attractive investment opportunity

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.

• We are reiterating our Buy rating on GES, raising our price target to $37 (from $32.50) and rolling out FY26 projections after Guess?
• ended FY24 with a strong 4Q which easily beat both top and bottom line Street expectations and announced a $2.25 per share special dividend.
• Further, initial FY25 projections, which incorporate the acquisition of Rag & Bone, handily beat Street top line projections and bracket bottom line expectations, even as Guess?

• WK Kellogg is a consumer staple company with low risk and attractive valuation
• Recent spin-off has unlocked self-help opportunities for potential upside for patient shareholders
• Projections show EBITDA margin growth, significant upside in sales growth and free cash flow, with focus on cereal brands and achieving mid-teens EBITDA margins by end of 2026, projected 100-250% total upside over three years.

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.

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.