In today’s briefing:
- SHEIN/Temu/AliExpress: As US Mulls Reforming “De Minimis” Rules, EU Could Take Similar Action
- ECM Weekly (8th July 2024) – Japan Cross-Shareholding, Honda, Aisin, Timee, Chenqi, Cirrus, Emcure
- KOSDAQ150 Index Rebalance Preview: For Now, A Dozen Changes in December
- The Key to Higher ROE Is Higher Profit Margins and Faster Efforts by Smaller Companies
- China Consumption Weekly (8 Jul 2024): BYD, Seres, Tesla, Microsoft, XHS, Mixue
- Crop Prices Plunge as Favorable US Weather Accelerates Planting, Growth, & Harvesting
- Card Factory (CARD) – Sunday, Apr 7, 2024
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SHEIN/Temu/AliExpress: As US Mulls Reforming “De Minimis” Rules, EU Could Take Similar Action
- EU, like the US, is considering lowering “de minimis” import threshold, soon
- Lowering import value thresholds or raising reporting requirements could make SHEIN/Temu/AliExpress goods more expensive, and fulfillment more onerous
- Threat of “de minimis” changes coming just as SHEIN reportedly seeks an IPO
ECM Weekly (8th July 2024) – Japan Cross-Shareholding, Honda, Aisin, Timee, Chenqi, Cirrus, Emcure
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, we looked at the recently launced offerings of Timee Inc , Chenqi Technology Limited and Cirrus Aircraft.
- On the placement front, this week too was dominated by the cross-shareholding unwinds, this time in Honda Motor (7267 JP).
KOSDAQ150 Index Rebalance Preview: For Now, A Dozen Changes in December
- With just over a third of the review period complete, there could be 12 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX EQUITY) at the December rebalance.
- Even with 12 potential changes, there is sector balance with over half the changes in the Information Technology sector. Passive trading impact varies from 0.04-4.1x ADV.
- The potential adds have outperformed the potential deletes and the KOSDAQ 150 Index (KOSDQ150 INDEX) since the start of the year with a big move higher since mid-May.
The Key to Higher ROE Is Higher Profit Margins and Faster Efforts by Smaller Companies
- Since TSE’s request, more companies have used ROE or ROIC as KPIs in mid-term management plans, but even now, more companies only indicate targets for sales, operating profit, etc.
- Larger companies have been the first to raise ROE; the key will be for smaller companies, which have been slower to improve their ROE, to raise their ROE.
- Many companies have only just begun to reduce their policy shareholdings and strengthen shareholder returns, and are still in the process of addressing the core issue of increasing profit margins.
China Consumption Weekly (8 Jul 2024): BYD, Seres, Tesla, Microsoft, XHS, Mixue
- BYD’s sales volume increased by 35% YoY in June and by 39% YoY in 2Q24.
- Tesla’s Model Y is on the state-owned corporation procurement catalogs.
- Microsoft plans to close its franchised store chain in China due to the weak demand for Surface.
Crop Prices Plunge as Favorable US Weather Accelerates Planting, Growth, & Harvesting
- Corn and Wheat planted acreage are down 3% and 5% YoY, respectively. Meanwhile, Soybean total planted area is up by 5% YoY compared to 2023.
- Planted acreage and ending stocks drove prices down for wheat and corn. Soybeans bucked the trend as reported acreage fell short of WASDE estimates by 400k acres.
- A positive picture for 2024 planting season is visible, with the early benefits of warm temperatures and improved moisture levels setting the stage for strong yields.
Card Factory (CARD) – Sunday, Apr 7, 2024
- CARD is a UK microcap retailer with impressive qualities despite appearing unattractive at first glance
- The company has shown consistent growth and gains market share each year in a stagnant market
- With a strong balance sheet, high return on capital employed, and efficient CEO, CARD presents a compelling investment opportunity at a low valuation
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.