Smartkarma Daily Briefs

• On the 28th May, PRC department store play Golden Eagle Retail (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
• The Offeror is the Wang family, Together with concert parties, they control 80.29%. 7.18% of the remaining 19.71% of the disinterested stakeholders have given an irrevocable. 
• The Scheme Doc was despatched this morning (23 August). The Scheme Meeting is September 15th with expected payment on (or before) the 17th of October. The Offer price is final.

• El Niño & Southern Oscillation (ENSO) is a recurring climate phenomenon with adverse impact chiefly on agriculture causing volatility in grain production leading to price shocks.
• Shortening frequency of ENSO cycles and its intensity has increased due to global warming. Given its potency of causing shocks, ENSO now has an outsized influence on global economics.
• Considering El Niño’s impact on corn, expect production to decline next year as La Niña effects fade compounded by agri productivity declines due to higher temperatures & extreme weather.

• After spectating DG for some time, I bought a small starter position in June. It is not often that you get a chance to buy a compounder like this 35% from its highs.
• Historically it has paid to buy the dips on DG, so I figured I would buy now and ask questions later.
• This time it has not paid, at all. My average was ~$185 and I sold my stock last monday at $168. I know that some of my subs also follow the stock so I thought I would collect my notes and write up a few paragraphs.

• Perovskite solar cells have the potential to be more efficient and less expensive than traditional silicon solar cells.
• Recent research suggests that the global market for Perovskite PV could be worth around $12 billion in 2032
• If Sekisui Chemical were to take a 10% market share, then the potential impact on earnings could be 22%.

SJM Holdings’ H1/23 results were acceptable, as earnings improved in Q2 after a disappointing first quarter. Crucially, Grand Lisboa Palace continues to ramp up its operations gradually and the asset has achieved EBITDA break-even since June. That said, the company’s overall GGR market share remains meaningfully below its FY 2019 level.​ SJM reported slight positive EBITDA in H1, albeit we believe FCF was slightly negative after interest payments. The company’s profitability is likely to lag that of peers for the next 1-2 years.

We note that some investors are concerned about the economic slowdown in China, which could impact discretionary consumer spending (e.g. gaming and travel to Macau). That said, we believe the Chinese consumer market is large enough to sustain a continued recovery of Macau’s gaming sector. 

• There are concerns about the ability of female directors hired solely for the purpose of recruiting women directors without a reasonable director nomination process to demonstrate strength on the BOD.
• Board diversity issues were considered a low priority until more institutional investors voted against the top management of companies with zero female directors at shareholder meetings.
• Given the small population of full-time female employees and the relatively young age bias, it’s likely that even in 2030, most female board members will be relying on outside talent.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Etsy delivered an all-around beat in the previous quarter, with adjusted EBITDA margin and revenue increasing significantly.
• Their year-over-year growth rate was negative, but it increased sequentially.
• Etsy also observed healthy year-over-year growth in the number of new and reactivated buyers when bringing both groups together.

• DoorDash delivered a mixed result in its last quarter, with revenues above analysts’ expectations but failed to surpass the analyst consensus regarding earnings.
• The quarter saw an increase in international business as well as better unit economics.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Starbucks Corporation delivered mixed results in the quarter, with revenues below Wall Street expectations but managed a significant earnings beat.
• In North America, the company’s revenue growth was driven by strong same-store sales and operational improvements.
• Starbucks’ digital strategy, mainly through Starbucks Rewards, showed good growth, reflecting the brand’s strength in key markets.