In today’s briefing:
- Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong
- Asian Dividend Gems: Puregold Price Club
- NextAge (3186): What Went Wrong?
- frontdoor Inc.: Engagement & Upscaling via Technological Advancements & Other Major Developments
- Gentex Corporation: Recent Expansion of Full Display Mirror (FDM) Adoption
- Sonos Inc.: The Tale Of Market Expansion Through Category Diversification! – Major Drivers
- A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents
Last Week in Event SPACE: Seven & I/Couche-Tard, Intouch, SAMTY, Korea Zinc/Young Poong
- Couche-Tard execs do the rounds in Tokyo, complaining about not being able to do the rounds. This sounds like they are trying to make themselves sound nice. For now
- First the low-balled VTOs for AIS (ADVANC TB) and Thaicom (THCOM TB). Then the Intouch (INTUCH TB)/Gulf Energy (GULF TB) amalgamation. Then, arguably, the next unorthodox development will take place.
- Investors buying SAMTY HOLDINGS (187A JP) in size may withhold shares, either they’ll try to become the fulcrum investor to get into the Bidco OR they will try for a bump.
Asian Dividend Gems: Puregold Price Club
- Puregold has built an enormous moat in the Philippines around its hypermarket, supermarket, and discount/membership stores, which is evident on its steady growth in sales and profits amid challenging environment.
- Puregold has attractive valuations. Puregold is trading at attractive valuations of 2.7x EV/EBITDA, P/E of 8.6x, and P/B of 0.9x, based on 2025 consensus earnings estimates.
- In the next several years, the Philippines is expected to move into the upper middle-income economy which should have a positive impact on the consumption-led categories including supermarkets and hypermarkets.
NextAge (3186): What Went Wrong?
- Sales per outlet and gross margin per vehicle were supposed to rise in Q3. Instead, both went south, causing management to lower FY guidance about 50%.
- Evidence from the 1st and 2nd quarters that indicated an immanent turnaround simply vanished in the 3rd quarter.
- We lower our rating form “Massive Growth at Huge Discount” to “Decent Growth at Reasonable Price, No immanent catalyst.”
frontdoor Inc.: Engagement & Upscaling via Technological Advancements & Other Major Developments
- Frontdoor, Inc. delivered a robust financial performance for the second quarter of 2024, with notable progress on strategic fronts, despite facing macroeconomic challenges and a tough real estate environment.
- The company reported a revenue increase of 4% reaching $542 million and observed a significant expansion in gross margin, up by 470 basis points to 56%.
- Adjusted EBITDA improved by 31% to $158 million, and free cash flow saw a substantial rise, more than doubling to $91 million.
Gentex Corporation: Recent Expansion of Full Display Mirror (FDM) Adoption
- Gentex Corporation reported its financial results for the second quarter of 2024, revealing challenges in light vehicle production and sales.
- Net sales for the quarter were $572.9 million, a decrease from $583.5 million in the same period last year.
- The decline is attributed to a 3% drop in light vehicle production in North America, Europe, and Japan/Korea.
Sonos Inc.: The Tale Of Market Expansion Through Category Diversification! – Major Drivers
- Sonos, a key player in the audio technology sector, presented its third quarter fiscal 2024 results that signaled both promises and challenges.
- The call, led by Patrick Spence, CEO of Sonos, detailed the current predicaments mainly centered around the recent overhaul of their mobile application, alongside highlights of new product introductions and financial metrics.
- 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.
A Compensation Model Should Be Created to Maximize Outside Directors’ Abilities as Necessary Talents
- Outside director compensation is increasing, but there is a considerable difference in compensation for outside directors between large and small companies and between small and medium-sized publicly traded companies.
- Every time a scandal occurs, there is a lack of shareholder-oriented management and a smattering of outside board members who turn a blind eye to the scandal.
- A compensation model that includes equity compensation should be created to maximize the power of outside directors, with “management from the perspective of shareholders” as a necessary condition.
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