Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

Equity Bottom-Up

While we believe that direct sellers will all face tougher regulatory scrutiny in China in 2019, as well as high comps from 2018, some will venture better than the others.  We believe that <a href="https://www.smartkarma.com/entities/6216" target="_blank" data-smartkarma-citation="entities:6216:1">Herbalife Ltd (HLF US)</a> China will see worst decline YoY in Q1 2019 since 2014, and <a href="https://www.smartkarma.com/entities/12451" target="_blank" data-smartkarma-citation="entities:12451:1">Nu Skin Enterprises Inc A (NUS US)</a> has been the most resilient, due to the positive momentum in their skincare category.  Growth overall in the cosmetics industry is accelerating, despite the challenging macroeconomic environment, driven by targeted marketing efforts focused on Chinese female millennial across the country.

While we believe that direct sellers will all face tougher regulatory scrutiny in China in 2019, as well as high comps from 2018, some will venture better than the others.  We believe that Herbalife Ltd (HLF US) China will see worst decline YoY in Q1 2019 since 2014, and Nu Skin Enterprises Inc A (NUS US) has been the most resilient, due to the positive momentum in their skincare category.  Growth overall in the cosmetics industry is accelerating, despite the challenging macroeconomic environment, driven by targeted marketing efforts focused on Chinese female millennial across the country.    

Assessment of China’s Crackdown on American MLMs

Lane Research

Douglas Lane

Lane Research is a boutique fundamental equity research firm focusing on companies that employ a direct to consumer business model. This is an area where we have had extensive experience over the years, going back to the mid-1990s when Amway Asia Pacific, Amway Japan and Nu Skin originally listed on the New York Stock Exchange. We think Direct Selling in particular supports many favorable consumer macro-trends such as leveraging today’s technology to advance social selling and workplace flexibility, and the move towards shopping away from a fixed retail location. Our proprietary financial modeling coupled with our decades of experience and contacts within this unique business model leave us well positioned to provide alpha to investors interested in the space. Lane Research does not have any trading or investment banking operations, fully aligning our objectives with our clients.

Experience includes:

-9 equity analyst awards, including Starmine's #2 stock picker in 2011 for Household Durables & #1 earnings estimator in 2010 for Personal Products, and The Wall Street Journal's #1 stock picker in 2004 & 2006 for Household Products. 

-Financial TV appearances including CNBC and Bloomberg

-Quotes in financial publications such as Wall St Journal, Investors Business Daily and Barron's, and newswires such as Reuters and the Associated Press

-Chartered Financial Analyst since 1992 and member of the CFA Society Boston

-FINRA Series 7, 63, 86 & 87

<a href="https://www.smartkarma.com/entities/7022" target="_blank" data-smartkarma-citation="entities:7022:1">Tupperware Brands (TUP US)</a> reported 3Q ongoing EPS ahead of expectations but it was mostly due to higher other income, a lower tax rate and fewer shares outstanding from the recent stock buybacks than expected.  Mgt increased the midpoint of its FY ongoing EPS range by +$0.025, with +$0.065 from better underlying EPS partially offset by ($0.04) more of a currency hit.  Momentum Indicators on balance improved sequentially with Active Sales Force stabilizing vs the 2Q on a 2-year stack and Organic Sales growth, excluding structural changes, improving.

Tupperware Brands (TUP US) reported 3Q ongoing EPS ahead of expectations but it was mostly due to higher other income, a lower tax rate and fewer shares outstanding from the recent stock buybacks than expected.  Mgt increased the midpoint of its FY ongoing EPS range by +$0.025, with +$0.065 from better underlying EPS partially offset by ($0.04) more of a currency hit.  Momentum Indicators on balance improved sequentially with Active Sales Force stabilizing vs the 2Q on a 2-year stack and Organic Sales growth, excluding structural changes, improving.

Tupperware Brands: 3Q EPS Upside Mostly Non-Operating; However, Underlying Business Stabilizing

<a href="https://www.smartkarma.com/entities/7022" target="_blank" data-smartkarma-citation="entities:7022:1">Tupperware Brands (TUP US)</a> remains our #1 value pick longer term as we believe its multi-year low valuations, 8.7% dividend yield and, with its recent $200MM stock buyback authorization, double-digit cash returned to shareholders yield are attractive while investors wait for operating momentum to return.  
Near-term, however, given the volatility surrounding recent quarterly reports, we would wait to see the print before allocating more capital to the name.

Tupperware Brands (TUP US) remains our #1 value pick longer term as we believe its multi-year low valuations, 8.7% dividend yield and, with its recent $200MM stock buyback authorization, double-digit cash returned to shareholders yield are attractive while investors wait for operating momentum to return.  
Near-term, however, given the volatility surrounding recent quarterly reports, we would wait to see the print before allocating more capital to the name. 

Tupperware Brands: This Week’s Earnings 2-Minute Drill

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

It was reported on August 25th (after market close) that a Hong Kong based private equity firm Affinity Equity Partners will purchase a 63.56% stake in <a href="https://www.smartkarma.com/entities/4739" target="_blank" data-smartkarma-citation="entities:4739:1">Lock&amp;Lock Co Ltd (115390 KS)</a> for 633.2 billion won (US$561.6 million), or 18,000 won per share. As of August 25th, Lock &amp; Lock's share price was 12,950 won and market cap was 712 billion won. The acquisition price represents a 38.9% premium to the closing price on Friday. Lock &amp; Lock makes wonderful food containers. We use its products at our…

It was reported on August 25th (after market close) that a Hong Kong based private equity firm Affinity Equity Partners will purchase a 63.56% stake in Lock&amp;Lock Co Ltd (115390 KS) for 633.2 billion won (US$561.6 million), or 18,000 won per share. As of August 25th, Lock &amp; Lock's share price was 12,950 won and market cap was 712 billion won. The acquisition price represents a 38.9% premium to the closing price on Friday. Lock &amp; Lock makes wonderful food containers. We use its products at our…

Korea M&A Spotlight: Affinity Equity Partners Acquires Lock & Lock

United States

Tupperware Brands Corporation is a portfolio of global direct selling companies which sell products across multiple brands and categories through an independent sales force.  The Company's product brands and categories include food preparation, storage, and serving solutions for the kitchen and home. Tupperware Brands Corp also sells beauty and personal care products.

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Tupperware Brands (TUP US)

Assessment of China’s Crackdown on American MLMs

While we believe that direct sellers will all face tougher regulatory scrutiny in China in 2019, as well as high comps from 2018, some will venture...

JL Warren Capital

Tupperware Brands: 3Q EPS Upside Mostly Non-Operating; However, Underlying Business Stabilizing

Tupperware Brands (TUP US) reported 3Q ongoing EPS ahead of expectations but it was mostly due to higher other income, a lower tax rate and fewer...

Douglas Lane

Tupperware Brands: This Week’s Earnings 2-Minute Drill

Tupperware Brands (TUP US) remains our #1 value pick longer term as we believe its multi-year low valuations, 8.7% dividend yield and, with its...

Douglas Lane

Korea M&A Spotlight: Affinity Equity Partners Acquires Lock & Lock

It was reported on August 25th (after market close) that a Hong Kong based private equity firm Affinity Equity Partners will purchase a 63.56%...

Douglas Kim

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