In today’s briefing:
- Treasury Wine Entitlement Offer – Not as Straightforward as It Sounds
- JD.Com: Losing Its Appeal?
- APAC Luxury Industry Series: Update
- GoTo: In Pursuit of Profits…
- Midea Group (000333 CH): Not That Correlated To China Property
- Bullish Breadth Divergences Persist; Russell 2000 Testing 1.5-Year Support; Buys in Education Svcs
- Midea A/H Listing – Filing Updates – Growth and Margins Pick Up
- Philip Morris International: Development of Zero-Tobacco Heat Stick & Other Developments
- Procter & Gamble: How Its Superior Brand Power Is Winning Over Consumers! – Key Drivers
- Tesla Inc: A Disappointing Performance Despite The Solid Developments In AI & Autopilot! – Key Drivers
Treasury Wine Entitlement Offer – Not as Straightforward as It Sounds
- Treasury Wine Estates (TWE AU) aims to raise up to US$525m (A$825m) via a renounceable fully underwritten entitlement offer.
- Proceeds from the placement will be used to part fund the acquisition of DAOU Vineyards, a luxury wine brand based in California.
- In this note, we will talk about the deal dynamics.
JD.Com: Losing Its Appeal?
- After a spike higher in fund ownership in 2021, active Asia Ex-Japan funds are beginning to close out positions.
- Funds including T.Rowe Price, LO Funds and Nikko AM have closed out exposure this year.
- JD.com remains a very well owned stock among institutional investors, at a time when performance is anything but stellar so far this year.
APAC Luxury Industry Series: Update
- This update builds upon our initial report on the APAC Luxury Industry, in which we expressed our belief that potential opportunities lie within the small niches of the luxury sector.
- While the share price performance hasn’t met our expectations, the broader trend we highlighted, Luxury Travel and Tourism, has shown robust growth.
- Even though travel flows have returned to pre-pandemic levels, Shiseido has not yet regained its pre-pandemic performance, however the two hotels are already operating at levels close to 2019 levels.
GoTo: In Pursuit of Profits…
- GoTo reported 3Q2023 results on Monday. Gross revenues increased 1.4% YoY to IDR5.98trn while adj. EBITDA losses further narrowed down to IDR1.84trn vs IDR3.71trn in 3Q2022.
- GoTo Gojek Tokopedia Tbk PT (GOTO IJ) continues to see huge reduction in losses but growth rates have fallen further with cutdown on incentives and promotional spending.
- It seems that GoTo has stopped exploring growth opportunities in pursuit of profits, however, this may not be sustainable in the long-term with falling growth rates.
Midea Group (000333 CH): Not That Correlated To China Property
- Midea Group Co Ltd A (000333 CH) has officially filed for Hong Kong listing last week.
- A common pushback against owning the stock is the perception of strong correlation to China property, which is not true in terms of business fundamentals.
- The stock is currently trading at 10x 2024E PE compared to an average of 13x over the last 10 years.
Bullish Breadth Divergences Persist; Russell 2000 Testing 1.5-Year Support; Buys in Education Svcs
- The SPX is at 4165-4200 support, and the Nasdaq 100 (QQQ) is at $350-$355 support. No “decisive” breakdowns quite yet as supports show signs of holding.
- Russell 2000 (IWM) is testing 1.5-year support at $162-$163, making this a logical spot for small-caps to bounce and an attractive risk/reward for buyers
- Continue to see signs of breadth possibly bottoming-out. Both the SPX and Russell 2000 and the % of stocks above their 50-day and 20-day MAs display bullish breadth divergences.
Midea A/H Listing – Filing Updates – Growth and Margins Pick Up
- Midea Group Co Ltd A (000333 CH), one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.
- Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
- We have covered the company and deal background in our previous note. In this note, we talk about the updates from the recent filing.
Philip Morris International: Development of Zero-Tobacco Heat Stick & Other Developments
- Philip Morris International delivered mixed results for the previous quarter, with revenues above analyst expectations but below-par earnings.
- The company reported a robust and better-than-expected performance in Q3, with significant contributions from IQOS and ZYN.
- Philip Morris continued its positive trend in total volumes, achieving over 2% growth in Q3, positioning them to realize their third consecutive year of growth.
Procter & Gamble: How Its Superior Brand Power Is Winning Over Consumers! – Key Drivers
- Procter & Gamble managed yet another all-around beat in the latest result.
- The company continues to focus on innovation, delivering superior products, and driving market share growth.
- Additionally, the company’s pricing strategy, backed by product excellence and strong brand reputation, has been a consistent driver of growth.
Tesla Inc: A Disappointing Performance Despite The Solid Developments In AI & Autopilot! – Key Drivers
- Tesla delivered a highly disappointing set of results and failed to meet the revenue and earnings expectations of Wall Street.
- The focus on AI development is crucial, as it has the potential to make Tesla a leader in the autonomous vehicle market.
- In terms of energy storage, Tesla deployed 4 gigawatt-hours of storage products in Q3, and the energy division is becoming a highly profitable business for the company.
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