Daily Brief Consumer: Stella International, GoTo Gojek Tokopedia Tbk PT, Lawson Inc, Asahi India Glass, Home Depot Inc, Golf Digest Online, Natura Cosmeticos Sa, Garmin Ltd, Walmart and more

• Vietnam now accounts for more than 50% of production replacing China
• China production is less than 25% of overall capacity in 2023
• Reshoring and production of higher end “Athleisure” shoes is increasing margins for Stella International (1836 HK)
  

• GoTo held a public expose at the IDX to update investors on latest developments including the Tokopedia sale but also to outline its key strategies for 2024. 
• GoTo will start to receive the service fee from Tokopedia from 1st February despite that monitoring is ongoing by the Ministry of Trade although that is now 75% complete.
• GoTo’s focus will be on affordable products, some new premium offerings, and increasing higher take rate lending products through GoPay, with incoming fees from Tokopedia providing additional funding going forward.  

• For the month of February 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.
• The average premium for the new transactions announced (or first discussed) in February was ~33%.
• This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

• Asahi India Glass (AISG IN) is an integrated glass and window solutions company and engages both in the automotive and the building & construction segments.
• While capital allocation is not a major concern for the company, the only element that could warrant attention is CWIP as the company has several projects overdue.
• Margins have been strong yet slightly fluctuating in the last two years. Overall, the balance sheet health looks okay.

• The Home Depot’s Q4 2023 earnings highlighted both opportunities realized during the fiscal year and challenges faced, which contributed to a year of moderate performance.
• Overall, the company witnessed a sales decline by 3% reaching $152.7 billion for the fiscal year 2023 while comp sales dropped by 3.2% and EPS stood at $15.11, revealing a reduction from the previous year’s $16.69.
• 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.

• On the surface, FY23/12 consolidated OP -68% YoY, profit ATOP -53%, and FY24/12 initial guidance for a profit ATOP net loss may appear to indicate a challenging earnings environment.
• However, closer examination reveals steady earnings improvement, and the new MTP through FY26/12 targets recouping major overseas growth investments.
• The table below shows sequential improvement in the amount change YoY for Group EBITDA, OP and profit ATOP every quarter, with profits at all 9 levels posting YoY gains in the 4Q. 

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Natura’s ESG as “Strong”, in line with the Environmental and Social pillars, while Governance is “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”.

• This is our first report on Garmin Ltd., leading producer of navigation and communication equipment.
• The company delivered strong growth in both consolidated revenue and profit for Q4 2023.
• Consolidated revenue rose by 13% to nearly $1.5 billion, breaking a new quarterly record with three of its business segments reporting double-digit growth.

• In its recent earnings, Walmart demonstrated a strong performance with sales growth of 4.9% and adjusted operating profit growth of 10.9% in constant currency.
• Major highlights include higher transaction counts and unit volumes, gains in market shares in both the U.S and internationally, improved in-stock levels, and strong performance in customer experience scores.
• It’s also significant that the company surpassed $100 billion in global eCommerce sales for the first time.