Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Thematic (Sector/Industry)

<ul><li class="p1">Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack from hard discounters and online competition.</li><li class="p1">The prolonged period of slow economic growth has conditioned consumers to be more price sensitive, and the emergence of the e-commerce channel is rapidly changing consumers' shopping behaviours.</li><li class="p2">In our opinion, the strongest antidote to these pressures is a strong brand.</li><li class="p2">In this report, we quantify the power of each company's brand by its ability to take pricing, using a number of metrics, and conclude that while brand strength varies widely across the consumer packaged goods space, beverages and tobacco generally enjoy stronger positions.</li><li class="p2">We also dive deep into cost advantages and show that while some of the large diversified CPG firms may generate economies of scope, economies of scale are more prevalent in industries with a homogeneous manufacturing process.</li></ul>Lead Analysts: Adam Fleck, CFA; Philip Gorham, CFA, FRM; R.J. Hottovy, CFA; Erin Lash, CFA; Ken Perkins, CFAFull report below the fold...&nbsp;

Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack from hard discounters and online competition.The prolonged period of slow economic growth has conditioned consumers to be more price sensitive, and the emergence of the e-commerce channel is rapidly changing consumers' shopping behaviours.In our opinion, the strongest antidote to these pressures is a strong brand.In this report, we quantify the power of each company's brand by its ability to take pricing, using a number of metrics, and conclude that while brand strength varies widely across the consumer packaged goods space, beverages and tobacco generally enjoy stronger positions.We also dive deep into cost advantages and show that while some of the large diversified CPG firms may generate economies of scope, economies of scale are more prevalent in industries with a homogeneous manufacturing process.Lead Analysts: Adam Fleck, CFA; Philip Gorham, CFA, FRM; R.J. Hottovy, CFA; Erin Lash, CFA; Ken Perkins, CFAFull report below the fold...&nbsp;

Morningstar Consumer Observer: Shopping for the CPG Brands Best Positioned for a New Era in Commerce

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>Public transport and taxi segments in Singapore provide much-needed stability for the group, not much downside surprise is expected. Now 54% of its revenue is generated overseas. </li>
<li>
<a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a> subsidiary, <a href="https://www.smartkarma.com/entities/vicom-ltd" target="_blank" data-smartkarma-citation="entities:19020:1" rel="noopener">Vicom Ltd (VCM SP)</a> is in charge of the OBU upgrade in Singapore, providing some high-margin incremental operating profit.</li>
<li>It trades at 14x PE, and its share price is almost at historical low, creating another reason to build positions on this.  </li>
</ul>


Public transport and taxi segments in Singapore provide much-needed stability for the group, not much downside surprise is expected. Now 54% of its revenue is generated overseas. 

Comfortdelgro Corp (CD SP) subsidiary, Vicom Ltd (VCM SP) is in charge of the OBU upgrade in Singapore, providing some high-margin incremental operating profit.
It trades at 14x PE, and its share price is almost at historical low, creating another reason to build positions on this.  


Comfortdelgro (CD): Growth Evident and Cheap

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Predicting binary events based on regulatory action or inaction is not ideal. Decide Monday or Tuesday to either sell <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a> in the market or tender.</li>
<li>
<a href="https://www.smartkarma.com/entities/krungthai-card-pcl" target="_blank" data-smartkarma-citation="entities:20097:1" rel="noopener">Krungthai Card (KTC TB)</a> is still a buy as latest pledged shares numbers fall to 2.3% of shares outstanding, down from 16.3% in May.</li>
<li>
<a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a> appears "cheap" to 90%-held <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings C (300999 CH)</a>; however recent implied stub figures have rolled over</li>
</ul>


Predicting binary events based on regulatory action or inaction is not ideal. Decide Monday or Tuesday to either sell Shibaura Electronics (6957 JP) in the market or tender.

Krungthai Card (KTC TB) is still a buy as latest pledged shares numbers fall to 2.3% of shares outstanding, down from 16.3% in May.

Wilmar International (WIL SP) appears "cheap" to 90%-held Yihai Kerry Arawana Holdings C (300999 CH); however recent implied stub figures have rolled over


Last Week In Event SPACE: Shibaura Electronics, Krungthai Card, Wilmar, First Pac, Fonterra

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ppb-group-berhad" target="_blank" data-smartkarma-citation="entities:793:1" rel="noopener">PPB Group (PEP MK)</a>'s grains &amp; agri arm, and four other feedmillers, has been labelled a cartel and fined by the Malaysian competition watchdog. A judicial review is ongoing.</li>
<li>Preceding my comments on Melco are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



PPB Group (PEP MK)'s grains &amp; agri arm, and four other feedmillers, has been labelled a cartel and fined by the Malaysian competition watchdog. A judicial review is ongoing.
Preceding my comments on Melco are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: PPB In The Doghouse, But These Levels Are Excessive

<ul>
<li>
<a href="https://www.smartkarma.com/entities/furuya-metal-co-ltd" target="_blank" data-smartkarma-citation="entities:5196:1" rel="noopener">Furuya Metal (7826 JP)</a> and <a href="https://www.smartkarma.com/entities/visional-inc" target="_blank" data-smartkarma-citation="entities:32977:1" rel="noopener">Visional (4194 JP)</a> are expected to be included in the TOPIX index at the end of January 2024. </li>
<li>
<a href="https://www.smartkarma.com/entities/wilmar-international-ltd" target="_blank" data-smartkarma-citation="entities:172:1" rel="noopener">Wilmar International (WIL SP)</a>'s current implied stub and simple ratio (Wilmar/ <a href="https://www.smartkarma.com/entities/yihai-kerry-arawana-holdings-c" target="_blank" data-smartkarma-citation="entities:33230:1" rel="noopener">Yihai Kerry Arawana Holdings (300999 CH)</a>) are both at all-time highs.</li>
<li>Reportedly, the mother and two sisters of <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> Chairman Jay Y. Lee plan to sell shares in a block deal worth ~₩2.8tn ($2.1bn billion.</li>
</ul>



Furuya Metal (7826 JP) and Visional (4194 JP) are expected to be included in the TOPIX index at the end of January 2024. 

Wilmar International (WIL SP)'s current implied stub and simple ratio (Wilmar/ Yihai Kerry Arawana Holdings (300999 CH)) are both at all-time highs.
Reportedly, the mother and two sisters of Samsung Electronics (005930 KS) Chairman Jay Y. Lee plan to sell shares in a block deal worth ~₩2.8tn ($2.1bn billion.


Last Week in Event SPACE: Furuya Metal, Visional, Wilmar, Samsung Electronics, ViinFast/Vingroup

Singapore

Wilmar International is Asia's leading agribusiness group, operating an integrated model across the agricultural commodity business. Its activities include oil palm cultivation, oilseed crushing, edible oils refining, flour and rice milling, sugar milling and refining, and manufacturing of consumer products, specialty fats, oleochemicals, biodiesel, and fertilizers. The company was founded in 1991 and is headquartered in Singapore.

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Wilmar International (WIL SP)

Morningstar Consumer Observer: Shopping for the CPG Brands Best Positioned for a New Era in Commerce

Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack...

Morningstar, Inc.

Comfortdelgro (CD): Growth Evident and Cheap

Comfortdelgro 54% revenue from overseas. Vicom Ltd's OBU upgrade offers high-margin profit, trading at 14x PE near historical low. Opportunity to...

Henry Soediarko

Last Week In Event SPACE: Shibaura Electronics, Krungthai Card, Wilmar, First Pac, Fonterra

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: PPB In The Doghouse, But These Levels Are Excessive

Whether poultry feed pricing needs to be "adjusted" by PPB; the cartel case is dismissed (or dumbed down) - or a combination of both - PPB appears...

David Blennerhassett

Last Week in Event SPACE: Furuya Metal, Visional, Wilmar, Samsung Electronics, ViinFast/Vingroup

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Morningstar Consumer Observer: Shopping for the CPG Brands Best Positioned for a New Era in Commerce

Seismic changes are affecting the consumer packaged goods industry as consumers are becoming less brand loyal and supermarkets are under attack...

Morningstar, Inc.

Comfortdelgro (CD): Growth Evident and Cheap

​Comfortdelgro 54% revenue from overseas. Vicom Ltd's OBU upgrade offers high-margin profit, trading at 14x PE near historical low. Opportunity to...

Henry Soediarko

Last Week In Event SPACE: Shibaura Electronics, Krungthai Card, Wilmar, First Pac, Fonterra

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: PPB In The Doghouse, But These Levels Are Excessive

Whether poultry feed pricing needs to be "adjusted" by PPB; the cartel case is dismissed (or dumbed down) - or a combination of both - PPB appears...

David Blennerhassett

Last Week in Event SPACE: Furuya Metal, Visional, Wilmar, Samsung Electronics, ViinFast/Vingroup

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Comfortdelgro 54% revenue from overseas. Vicom Ltd's OBU upgrade offers high-margin profit, trading at 14x PE near historical low. Opportunity to...