In today’s briefing:
- Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
- Sumber Alfaria Trijaya (AMRT IJ) – Good Reason for Optimism
- A/H Premium Tracker (To 25 Apr 2025): AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
- Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
- BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
- Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
- NEXT Plc: Initiation of Coverage- Is the Zalando Alliance The Hidden Catalyst for International Growth?
- Pearson Plc: Initiation of Coverage- Could U.S. Policy Shifts Be the Secret Catalyst Behind Its Growth Surge?
- Tesla’s Bold New Move: Affordable Cars, Robotaxis, and a Stock Surge Investors Didn’t Expect!
- LVMH: Initiation of Coverage- Can Its Latest Brand Revitalization & Portfolio Management Be A Potential Game Changer?
Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
- March demand growth improved vs weak February, but Q125 showed clear slowdown vs trend
- Relatively strong demand growth for outbound travel is no longer lifting airline load factors
- Near-Term, we no longer view Chinese travel as attractive, as stocks appear to lack catalysts
Sumber Alfaria Trijaya (AMRT IJ) – Good Reason for Optimism
- Sumber Alfaria Trijaya booked a slower-than-expected finish to FY2024, with some compression to margins, but mainly due to the temporary impact of investment in the business and higher promotions.
- The company has seen a strong start to FY2025, with SSSG growing at a faster pace than FY2024, with a strong performance over the run-up to Ramadan.
- Alfamart will continues to expand its store network in 2025, with Lawson under AMRT to bring future synergy benefits. Valuations look attractive with a more positive outlook for earnings.
A/H Premium Tracker (To 25 Apr 2025): AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
- AH Premia fall sharply. Spread curve torsion is mild but present, with narrow AH Premia widening, and wide premia narrowing.
- For a month I thought warning signs were flashing and spreads could widen. That has taken a pause. I am not comfortable it will remain paused or Hs will outperform.
- The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from wider spreads coming in, narrow spreads widening, and liquidity dropping. Alpha good again this week.
Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
- The precondition for Paloma Rheem Holdings’ tender offer for Fujitsu General (6755 JP) is satisfied. The offer is from 28 April to 28 May.
- Despite an arguably light offer and less than ideal process, this is a done deal due to a lack of opposition and no competing offer.
- At the last close and for a 5 June payment, the gross and annualised spreads are 1.3% and 14.1%, respectively.
BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
- In 1Q25, BYD’s revenue increased by 36% YoY and sales volume increased by 60% YoY.
- We believe BYD’s scale advantage will help cashflow and the competition in the coming market concentration.
- The P/E band suggests an upside of 59% for the end of 2025.
Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
- Although it’ll take some time for quality of existing listed companies to improve, a gradual improvement in quality of companies is likely for the time being as more companies delist.
- The TSE’s “request” was not only for activist investors, but also for other investors who shared the view that the stock market should not be left in the doldrums.
- A certain number of companies that fail to meet TSE listing criteria will move to the regional stock exchanges, leading to a gradual improvement in the quality of the TSE.
NEXT Plc: Initiation of Coverage- Is the Zalando Alliance The Hidden Catalyst for International Growth?
- NEXT, a prominent UK-based retail company, has reported its latest financial results, demonstrating both strengths and challenges in its operations.
- This summary captures the core aspects of NEXT’s performance, the strategic decisions made, and the roadmap ahead as outlined in their recent earnings call.
- 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.
Pearson Plc: Initiation of Coverage- Could U.S. Policy Shifts Be the Secret Catalyst Behind Its Growth Surge?
- Pearson PLC’s 2024 performance showcased a blend of strategic advancements and financial resilience.
- The company reported a robust financial outcome, aligning with market expectations.
- A key highlight was the sales growth of 3% and a significant profit increase of 10%, resulting in an EBIT margin of 16.9%.
Tesla’s Bold New Move: Affordable Cars, Robotaxis, and a Stock Surge Investors Didn’t Expect!
- Tesla’s first quarter of 2025 earnings revealed a company navigating immediate difficulties while maintaining focus on long-term opportunities.
- Despite declines in sales, operating income, and profit margins compared to the previous year, Tesla’s stock surged 5.4%, largely because investors had anticipated weak results after a 13% year-over-year drop in deliveries.
- Critical to the stock’s resilience was the reaffirmation that Tesla’s timeline for launching a lower-priced vehicle remains intact, with production expected to begin in the first half of 2025.
LVMH: Initiation of Coverage- Can Its Latest Brand Revitalization & Portfolio Management Be A Potential Game Changer?
- LVMH Moët Hennessy Louis Vuitton S.E. reported a year characterized by resilience against a backdrop of global economic challenges.
- The company saw marginal organic revenue growth, but a decline in operating income, largely influenced by significant non-recurring expenses related to major events such as the sponsorship of the Olympics and the renovation of Notre Dame.
- These strategic brand visibility investments also mark a considerable outlay impacting current operating margins.
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