Category

Consumer

Daily Brief Consumer: Stella International, GoTo Gojek Tokopedia Tbk PT, Lawson Inc, Asahi India Glass, Home Depot Inc, Golf Digest Online, Natura Cosmeticos Sa, Garmin Ltd, Walmart and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Stella International: A Beneficiary of Reshoring
  • GoTo (GOTO IJ) – A Leaner Green Machine
  • (Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement
  • Asahi India Glass Ltd: A.G.E. Analysis
  • The Home Depot Inc.: Strategic Investment in Pro Ecosystem & Interconnected Experience & Other Developments – Major Drivers
  • 4Q Follow-Up -Golf Digest Online | 3319
  • Natura – ESG Report – Lucror Analytics
  • Garmin Ltd.: Initiation Of Coverage – What Is Its Biggest Competitive Advantage? – Major Drivers
  • Walmart Inc.: Robust Technology Adoption For Operational Efficiency & 5 Other Major Drivers


Stella International: A Beneficiary of Reshoring

By David Mudd

  • Vietnam now accounts for more than 50% of production replacing China
  • China production is less than 25% of overall capacity in 2023
  • Reshoring and production of higher end “Athleisure” shoes is increasing margins for Stella International (1836 HK)

GoTo (GOTO IJ) – A Leaner Green Machine

By Angus Mackintosh

  • GoTo held a public expose at the IDX to update investors on latest developments including the Tokopedia sale but also to outline its key strategies for 2024. 
  • GoTo will start to receive the service fee from Tokopedia from 1st February despite that monitoring is ongoing by the Ministry of Trade although that is now 75% complete.
  • GoTo’s focus will be on affordable products, some new premium offerings, and increasing higher take rate lending products through GoPay, with incoming fees from Tokopedia providing additional funding going forward.  

(Mostly) Asia M&A, Feb 2024: Lawson, Altium, CSR, TCM, Boral, APM, Roland DG, Ssangyong Cement

By David Blennerhassett

  • For the month of February 2024, 15 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$20bn.
  • The average premium for the new transactions announced (or first discussed) in February was ~33%.
  • This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.

Asahi India Glass Ltd: A.G.E. Analysis

By Nitin Mangal

  • Asahi India Glass (AISG IN) is an integrated glass and window solutions company and engages both in the automotive and the building & construction segments.
  • While capital allocation is not a major concern for the company, the only element that could warrant attention is CWIP as the company has several projects overdue.
  • Margins have been strong yet slightly fluctuating in the last two years. Overall, the balance sheet health looks okay.

The Home Depot Inc.: Strategic Investment in Pro Ecosystem & Interconnected Experience & Other Developments – Major Drivers

By Baptista Research

  • The Home Depot’s Q4 2023 earnings highlighted both opportunities realized during the fiscal year and challenges faced, which contributed to a year of moderate performance.
  • Overall, the company witnessed a sales decline by 3% reaching $152.7 billion for the fiscal year 2023 while comp sales dropped by 3.2% and EPS stood at $15.11, revealing a reduction from the previous year’s $16.69.
  • 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.

4Q Follow-Up -Golf Digest Online | 3319

By Sessa Investment Research

  • On the surface, FY23/12 consolidated OP -68% YoY, profit ATOP -53%, and FY24/12 initial guidance for a profit ATOP net loss may appear to indicate a challenging earnings environment.
  • However, closer examination reveals steady earnings improvement, and the new MTP through FY26/12 targets recouping major overseas growth investments.
  • The table below shows sequential improvement in the amount change YoY for Group EBITDA, OP and profit ATOP every quarter, with profits at all 9 levels posting YoY gains in the 4Q. 

Natura – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Natura’s ESG as “Strong”, in line with the Environmental and Social pillars, while Governance is “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”.


Garmin Ltd.: Initiation Of Coverage – What Is Its Biggest Competitive Advantage? – Major Drivers

By Baptista Research

  • This is our first report on Garmin Ltd., leading producer of navigation and communication equipment.
  • The company delivered strong growth in both consolidated revenue and profit for Q4 2023.
  • Consolidated revenue rose by 13% to nearly $1.5 billion, breaking a new quarterly record with three of its business segments reporting double-digit growth.

Walmart Inc.: Robust Technology Adoption For Operational Efficiency & 5 Other Major Drivers

By Baptista Research

  • In its recent earnings, Walmart demonstrated a strong performance with sales growth of 4.9% and adjusted operating profit growth of 10.9% in constant currency.
  • Major highlights include higher transaction counts and unit volumes, gains in market shares in both the U.S and internationally, improved in-stock levels, and strong performance in customer experience scores.
  • It’s also significant that the company surpassed $100 billion in global eCommerce sales for the first time.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Welcia Holdings, ITC Ltd, Tsuruha Holdings, S.M.Entertainment Co, Astra International, Tesla Motors, Li Auto , Alibaba Group Holding , Sido Muncul and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]
  • BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest
  • Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan
  • HYBE Invests Additional 104 Billion Won in SM Entertainment – Why?
  • Astra International (ASII IJ) – Indonesia’s Mirror Image
  • Elon Musk Can’t Be Trusted. He Also Can’t Be Stopped, Apparently.
  • Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)
  • [Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2
  • Alibaba Group Holdings: EM Fund Positioning Update
  • Sido Muncul (SIDO IJ) – Iconic Modern Jamu


Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

By Travis Lundy

  • The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
  • Today post-close we got the deal. I was a little surprised it came this fast, but it’s now mostly done it appears – largely as predicted in the last piece.
  • There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. 

BAT’s Possible US$2.5bn ITC Selldown – Will Be Well Flagged but Still Won’t Be an Easy One to Digest

By Sumeet Singh

  • Earlier this month, British American Tobacco (BATS LN)’s management stated that they were reviewing their stake in ITC Ltd (ITC IN) to enhance its balance sheet flexibility.
  • BAT has owned its stake in ITC for over a century and remains its largest shareholder.
  • In this note, we talk about the possible deal structure and dynamics.

Aeon (8267 JP), Tsuruha (3391 JP) And Welcia (3141 JP)’s Long-Dated Plan

By Arun George

  • Aeon Co Ltd (8267 JP), Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have announced an alliance to establish the largest drugstore alliance in Japan by December 2027.
  • Aeon will carry out several Tsuruha transactions – buy Oasis 13.58% stake at JPY15,500 per share and, on receiving regulatory approval, reach 27.17% of the voting rights.  
  • The agreements involve merging Tsuruha and Welcia through a share exchange offer and Aeon subsequently increasing its Tsuruha voting rights from 27.17% to less than 51%. 

HYBE Invests Additional 104 Billion Won in SM Entertainment – Why?

By Douglas Kim

  • After the market close, it was announced that HYBE (352820 KS) acquired a 3.7% stake (868,948 shares) in SM Entertainment Co (041510 KS) for 104.3 billion won.
  • HYBE’s acquisition of shares was accomplished through the exercise of a put option by SM Entertainment’s founder Lee Soo-Man. After this purchase, HYBE will own 12.6% stake in SM Entertainment. 
  • We like SM Entertainment at current levels. Valuations are attractive and there is a strong pipeline of new music/songs to be launched by its artists in 2Q 2024. 

Astra International (ASII IJ) – Indonesia’s Mirror Image

By Angus Mackintosh

  • Astra International booked record earnings for 2023 despite some softening of commodities, driven by strong performance from the auto division and financing plus the strong performance from motorcycles. 
  • Astra has continued to invest in growth areas of the Indonesian economy with investments last year in the EV battery ecosystem, increased exposure to healthcare, and investment in data centres.
  • Management flagged a potential 2H cyclical downturn but it is well-diversified enough to weather this. Valuations look attractive on 6.8x FY2024E PER and with a 6.6% dividend yield.

Elon Musk Can’t Be Trusted. He Also Can’t Be Stopped, Apparently.

By Vicki Bryan

  • Tesla Q1 must be tracking even worse than I expected based on the uptick in Elon Musk’s erratic behavior—his tell when bad news spirals out of control.
  • Wacko conspiracies, Putin propaganda, National security threat! At least he has his self-flattering alter ego Adrian Dittmann to boost his spirits. 
  • Musk’s companies continue to rack up safety violations, government investigations, and lawsuits, while he loses his massive pay package and tries to dodge the SEC investigation into his Twitter acquisition.

Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

By Michael Causton

  • Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.
  • Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.
  • But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon’s massive potential dominance.

[Li Auto Inc. (LI US, BUY, TP US$52) TP Change]: What Can Go Wrong & Go Right in LI Becoming BYD #2

By Eric Wen

  • LI Auto reported C4Q23 top line, non-GAAP operating profit and GAAP net income (6.2%), 13% and 81% vs. our estimates and 4.9%, 52% and 102% vs. consensus.
  • We believe LI can beat our delivery estimate on exports, but can also miss the consensus on gross margins if its 2024 volume target is met by sedans;
  • We raise our TP by US$5 to US$52 and reiterate BUY.

Alibaba Group Holdings: EM Fund Positioning Update

By Steven Holden

  • Despite average weights falling from over 6% in 2020 to under 2% today, 73% of EM funds remain invested in Alibaba.
  • The make up of the investor base has changed, with a rotation between high growth investors (out) and Value investors (in).
  • Of the 73% of current holders, the core portfolio weight range sits between 1.5% and 3%, with the most bullish topping out at 5%+

Sido Muncul (SIDO IJ) – Iconic Modern Jamu

By Angus Mackintosh

  • Sido Muncul‘s recent results reflect a sharp recovery in its core herbal and F&B business as increased sales volumes have brought scale benefits to its iconic products. 
  • The company saw recovery in both sales and profits, with margins improving considerably  in 4Q2023 due to increased volumes and lower raw material prices. 
  • Tolak Angin remains an iconic brand catering to all demographics with 70% leadership of its category, with Kuku Bima being the leader in powdered energy drinks. Valuations appealing versus history. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Toei Animation, Tongcheng Travel Holdings , Rakuten Group , Li Auto , Samsonite, Matahari Department Store, Luckin Coffee, Dollar Index and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting
  • Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal
  • Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz
  • HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)
  • Samsonite (1910 HK): Evaluating a Potential Privatisation
  • Samsonite (1910 HK): Leader Of The Pack
  • Samsonite (1910 HK) Takeover Interest: Hold on to These Shares
  • Matahari Department Store (LPPF IJ) – Primed for Recovery
  • [Luckin Coffee (LKNCY US, BUY, TP US$41) TP Change]: Weak Earnings Could Be Temporary…Reiterate BUY
  • U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.


Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting

By Travis Lundy


Final Flows for Hang Seng, HSCEI, HS Tech on 1 March Rebal

By Travis Lundy

  • The Hang Seng Index, HSCEI, and HS Tech rebals were announced on 16 Feb. Janaghan Jeyakumar, CFA had expected GDS out, Tongcheng Travel in on HSTECH, along with the…
  • …deletion of Zhongsheng Group (881 HK) in HSCEI, with a low conviction replacement of Zijin Mining, which turned out to be an add of China Unicom Hong Kong (762 HK)
  • No changes to the main HSI Index, which means evolution is further delayed. Today was the day to recap the caps. Mar1 Flow estimates are included below for all three.

Rakuten’s New “Bond-Type Share” Issuance – Quite Quirky to Quantulate Rakuten’s Quisquous New Quoz

By Travis Lundy

  • Today, Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue “Bond-Type Class Shares.”   First reaction: You wot, mate?
  • The company states it wants to “strengthen its financial base through reducing interesting-bearing debt by equity-related financings and conduct proactive control of debt maturity schedule, etc.”
  • Now it wants to issue listed bond-type shares. Dividends not interest. The last Japanese issuer of something similar was NEC in 2001. Few will remember, so we study the situation.

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (Mar 2024)

By Brian Freitas


Samsonite (1910 HK): Evaluating a Potential Privatisation

By Arun George

  • Bloomberg reports that Samsonite (1910 HK) is drawing takeover interest from several PE firms which aim to relist Samsonite in the US to draw a higher valuation. 
  • A standard takeover premium (around 30%) should be sufficient due to the shareholder register. There is no single large shareholder(s) to pose an issue to an offer. 
  • The probability of an offer is medium, with an offer price likely around HK$30.00. Irrespective of a binding offer, the upside remains as Samsonite trades at an undemanding valuation. 

Samsonite (1910 HK): Leader Of The Pack

By David Blennerhassett

  • Luggage maker Samsonite (1910 HK) is up 11.8% today, as I type, after Bloomberg reported it is working with advisers as it studies possibilities, including going private.
  • With the reopening of China and the ongoing recovery in travel globally, Samsonite’s net sales improved markedly across all regions. 1H23 profit gained 185.3% versus 1H22.
  • FY23 figures should be out in the middle of next month.

Samsonite (1910 HK) Takeover Interest: Hold on to These Shares

By Mohshin Aziz

  • Bloomberg reported that Samsonite (1910 HK) is considering several options, including going private, and there are several suitors including from buyout firms  
  • Share price has surged by 14% in the morning session. Stock is still very cheap, at 10.5x PE, 7.5x EV/EBITDA with an impressive ROE of 30%
  • Our quick take values Samsonite at HKD34/share, based on its forecasted +1 year earnings multiplied to its average long-term PE of 15.5x 

Matahari Department Store (LPPF IJ) – Primed for Recovery

By Angus Mackintosh

  • Matahari Department Store (LPPF IJ) reported another slow set of results in 4Q2023, as it saw slower demand and continues to clear aged inventory. 
  • The company is well-prepared for the upcoming Lebaran season with more conservative inventory levels. It will also see the benefits of new brands coming on stream this year. 
  • Matahari Department Store will open 4-6 new stores in 2024 but close 10 underperforming stores, with a continued focus on new DP brands like SUKO. Valuations remain attractive. 

[Luckin Coffee (LKNCY US, BUY, TP US$41) TP Change]: Weak Earnings Could Be Temporary…Reiterate BUY

By Eric Wen

  • Luckin Coffee reported 4Q23 revenue/non-GAAP NI in-line/(39.8%) vs. our estimate due to (1) extra winter subsidies; (2) rental cost from new stores; (3) more operating expenditures.
  • We view the non-GAAP NPM decline to 5.1% in 4Q23 as temporary and outlook for sequential improvements in 1H24 from (1)ASP rebound from easing competition, (2)efficiency improvement in rental cost
  • We think Luckin’s profitability outlook is intact and maintain BUY rating, but lower TP by US$2 to US$41 to factor in the rising cost.

U.S. Dollar Rolling Over; Small-Caps to Follow Mid- And Large-Caps to New Highs; Buys in Cons. Disc.

By Joe Jasper

  • Large-Cap indexes (S&P 500, Nasdaq 100, and DJI) remain bullish, all hitting new all-time highs last week while continuing to find short-term support at their respective 20-day MAs.
  • Mid-Caps (S&P 400, Russell Mid-Cap) starting another leg higher following breakouts from 2-month consolidations. Small-caps (S&P 600, Russell 2000) are likely to follow in the footsteps of large- and mid-caps.
  • Small-Cap indexes have been consolidating for 2.5 months following the historic rally from late-October to late-December 2023, a healthy sign. We expect they are gearing-up for another similar move higher.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Tsuruha Holdings, Toei Animation, Li Auto , APR, Booking Holdings, Hope Education Group Co Ltd, Rakuten Group , The Gym Group PLC, US Foods Holding Corp and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger?
  • Toei Animation (4816 JP): The Current Playbook
  • Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth
  • Li Auto (LI US): 4Q23, High Growth and Profit, A Winner of Market Concentration, Upgraded to Hold
  • Trading Strategy of APR on the First Day of IPO
  • Booking.com (BKNG US): Buying Back Shares Until There Is None Left
  • Chinese Education Giant Urged to Repay Bondholders Early as Default Fears Mount
  • Morning Views Asia: Rakuten Group
  • Oxy Capital’s Pedro Sousa Thesis on High Quality, Low Cost Gym Facilities in the UK $GYM.L
  • US Foods: Initiation of Coverage – Major Drivers


Tsuruha (3391) And Welcia (3141) – Aeon Tsuruha Stake Buy Followed by Merger?

By Travis Lundy

  • Over the weekend there was an article in the Nikkei saying that Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) were considering a merger. Other media outlets followed.
  • This has been a possible outcome. Aeon Co Ltd (8267 JP) owns 51% of Welcia, 13.6% in Tsuruha, and is negotiating to buy another 13% in Tsuruha from Oasis.
  • This would create a behemoth. ¥2.2trln in revenues vs ¥1trln for MatsukiyoCocokara (3088 JP). It would be 25% of the market. Questions will be asked about concentration. 

Toei Animation (4816 JP): The Current Playbook

By Arun George

  • Since the US$550 million secondary placement announcement, Toei Animation (4816 JP)’s shares are down 7.0% from the undisturbed price of JPY18,560 per share (14 February).
  • Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Toei Animation’s shares have followed the pattern of previous large placements.
  • The offering will likely be priced on 27 February. Investors participating in previous large Japanese placements tend to secure positive returns.

Aeon, Welcia and Tsuruha: Creating an FMCG Behemoth

By Michael Causton

  • The possible merger between Welcia and Tsuruha under Aeon has been talked about for years despite concerns from both drugstores, but may now happen.
  • But calling these retailers drugstores is increasingly a misnomer: FMCG-drugstores is better because they and many others in the sector, increasingly compete with FMCG retailers like supermarkets and even CVS.
  • This evolution is rapid so the merits of a deal make more sense when we view it from a sector five years in the future than how it is today.

Li Auto (LI US): 4Q23, High Growth and Profit, A Winner of Market Concentration, Upgraded to Hold

By Ming Lu

  • In 4Q23, revenue grew by 136% and operating profit was significantly higher than the market consensus.
  • Li Auto grew the most rapidly among the top-ten Chinese NEV sellers.
  • We believe Li Auto will be one of the winners after the market gets more concentrated. Upgrade to Hold.

Trading Strategy of APR on the First Day of IPO

By Douglas Kim

  • In this insight, we discuss a trading strategy for APR (278470 KS) which starts trading on 27 February. APR is the most anticipated IPO in Korea so far in 2024.
  • Our base case (6 months – 1 year) target price of APR is 370,809 won, which is 48% higher than the IPO price. 
  • We recommend investors to take some profits off the table (30%-50%) if the share price shoots higher by 100% to 200%+ from the IPO price on the first day. 

Booking.com (BKNG US): Buying Back Shares Until There Is None Left

By Mohshin Aziz

  • 4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)
  • But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars 
  • Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  

Chinese Education Giant Urged to Repay Bondholders Early as Default Fears Mount

By Caixin Global

  • Some global investors are urging Chinese private education giant XJ International Holdings Co. Ltd. to redeem half of its $350 million in bonds before maturity, as the creditors fear the Hong Kong-listed firm may intentionally default on repayments.
  • The bonds are due in 2026, but the creditors asked for the early redemption to be completed by March 2 in a letter sent to the Chinese company last month by their legal adviser, Chicago-headquartered global law firm Kirkland & Ellis LLP.
  • The creditors are a group of large international investors who collectively hold no less than $154 million, or about 50%, of the bonds’ outstanding principal amount, according to the letter seen by Caixin.

Morning Views Asia: Rakuten Group

By Leonard Law, CFA

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.


Oxy Capital’s Pedro Sousa Thesis on High Quality, Low Cost Gym Facilities in the UK $GYM.L

By Yet Another Value Podcast

  • Gym Group is a low-cost gym chain based in the UK, with 230 gyms and trading at six times EBITDA.
  • The company hit a rough patch during COVID but is expected to improve with new management and the ramp up of new gyms.
  • Public markets may be mispricing the sector due to potential earnings, energy cost normalization, and growth opportunities in the European market.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


US Foods: Initiation of Coverage – Major Drivers

By Baptista Research

  • This is our first report on food product manufacturer, US Foods.
  • The company reported solid performance in the fourth quarter and full year 2023, demonstrating strong execution of its strategy and operational discipline.
  • For the entire fiscal year of 2023, the company achieved record adjusted EBITDA of $1.56 billion driven by strong case growth, independent case growth of almost 7% and increased market share with targeted customer types.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Walgreens Boots Alliance, Trip.com, Aritzia Inc, AdvisorShares Pure US Cannabis ETF, Luckin Coffee, Ping An Healthcare and Technol and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?
  • Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive
  • Aritzia (ATZ) – Sunday, Nov 26, 2023
  • MSOS – Going Higher!
  • Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market
  • Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path


Walgreens Boots Alliance (WBA US) – How Do Dow Jones Deletes Do Historically?

By Travis Lundy

  • On 31 January, Walmart (WMT US) announced a 3:1 stock split. For cognoscenti, that meant a Dow Jones Industrial Avg might be in the offing.
  • The last change to the index was in Aug-2020, spurred by the 4:1 split for Apple (AAPL US). This time, the likely deletion candidate was Walgreens Boots Alliance (WBA US)
  • Indeed, last week, the Index Keepers announced Amazon.com Inc (AMZN US) would replace Walgreens Boots Alliance on 26 Feb (i.e. WBA would be booted on the close of 23 Feb).

Trip.com Q4 Quick Take: Strong Top-Line Growth | Impressive Expense Control | And Not Expensive

By Daniel Hellberg

  • Trip.com reported a strong set of Q4 and FY23 earnings results last week
  • Company has held the line on SG&A expenses; look for strong H124 growth
  • We believe shares are cheap and recommend investors buy below US$43/ADS

Aritzia (ATZ) – Sunday, Nov 26, 2023

By Value Investors Club

Key points

  • Aritzia has potential for significant share price upside, with potential returns between 170% to 344% over a 3-year period
  • The author has previously exited the stock at $50 but is considering going long again due to the brand’s continued strength despite recent challenges
  • The analysis questions whether Aritzia’s targets for fiscal year 2027 are reasonable and raises concerns about the company’s potential for future growth

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


MSOS – Going Higher!

By Rikki Malik

  • A bombed-out sector down 80% from the peak is worth another look
  • Weaker companies have exited the industry or have already gone under 
  • The sector ETF has a good risk reward  with catalysts ahead

Luckin Coffee (LKNCY US): Feeling Lucky in a Challenging Market

By Osbert Tang, CFA

  • Luckin Coffee (LKNCY US) concluded FY23 with a 203.3% surge in non-GAAP net profit to Rmb3.2bn, benefiting from higher store count and monthly transacting customers.
  • Luckin plans to lift store count by at least 23%, with total to reach over 20,000 in FY24. Product innovation, promotional discount reduction, and better store efficiency are profit drivers. 
  • Net cash reached Rmb3.8bn, or 7% of market cap. With a consensus EPS forecast of 28% CAGR in the next two years, its 15.1x and 11.7x PERs are not stretched.

Ping An Healthcare and Technology (1833.HK) – Valuation Logic May Completely Change Due to New Path

By Xinyao (Criss) Wang

  • Fang Weihao’s departure means PAGD’s strategic transformation failed. The business model of being a “vassal” of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
  • PAGD is at a crossroads. The question is which development path will the new CEO choose – Follow Fang Weihao’s strategy or return to the traditional Internet healthcare business model?
  • Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Li Auto , Kweichow Moutai, Youngone Holdings, Hasbro Inc, DoorDash , Genuine Parts Co, TSE Tokyo Price Index TOPIX and more

By | Consumer, Daily Briefs

In today’s briefing:

  • HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs
  • Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells
  • Asian Dividend Gems: Youngone Holdings
  • Hasbro Inc: Increased Utility of Tabletop & Expansion Into Video Games Space & 5 Other Major Drivers! – Financial Forecasts
  • DoorDash Inc: What Is Their Master Plan to Dominate Global Markets? – Major Drivers
  • Genuine Parts Company: Why Are They Carrying Out The Expansion and Scaling of Company-owned Stores? – Major Drivers
  • When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though


HK Connect SOUTHBOUND Flows (To 23 Feb 2024); Selling of Consumer Stocks, But Big Buys of SOEs

By Travis Lundy

  • A great week for HK and Chinese shares, especially the larger caps. Mainland indices were up 8 days in a row to Friday, helping HK shares stay bid.
  • Net SOUTHBOUND buying was HK$20.0bn in the first post-holiday week. LOTS of SOEs on the net buying side.
  • Remarkable this past week, was a new tendency to net sell names which were up a lot and net buy names which haven’t performed as well. 

Mainland Connect NORTHBOUND Flows (To 23 Feb 2024): Foreigners Buy, Natl Team Buys; Retail Sells

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net BUY RMB 10.7bn of A-shares on strong average activity after RMB +16.1bn, +9.9bn and +12.1bn the three weeks before. More National Team buying this week.
  • Five of the top ten buys among liquid NORTHBOUND stocks were finance. Again. Info Tech saw net selling. Again. People trading long gamma now instead of short gamma.

Asian Dividend Gems: Youngone Holdings

By Douglas Kim

  • Youngone Holdings is an attractive deep value stock. Net cash (including short term investments) was 1.1 trillion won at the end of 3Q 2023 (79% of market cap).  
  • Youngone Holdings is the holding company of Youngone Group. Youngone Corp is best known for its OEM apparel business for major branded companies such as The North Face and Patagonia.
  • We found Youngone Holdings using Smartkarma’s Smart Score Screener system. 

Hasbro Inc: Increased Utility of Tabletop & Expansion Into Video Games Space & 5 Other Major Drivers! – Financial Forecasts

By Baptista Research

  • Hasbro Inc.
  • concluded its fourth quarter and 2023 full-year earnings report with a focus on the positive effects of the company’s refocusing strategy and a cautious outlook for 2024.
  • Chris Cocks, the CEO, outlined the recent strategies of Hasbro, which centered on their philosophy of fewer, bigger, better, leading to a reduction in SKUs and an emphasis on high-impact products.

DoorDash Inc: What Is Their Master Plan to Dominate Global Markets? – Major Drivers

By Baptista Research

  • DoorDash reported its Q4 2023 earnings, with the company’s representatives including co-founder, chair, and CEO, Tony Xu, and CFO Ravi Inukonda, discussing its investment strategies, outlook and financial performance.
  • Notably, in international markets and new verticals, DoorDash is seeking to find product-market fit and grow efficiently.
  • The company sees significant potential due to lower penetration levels, with investments destined towards improving product market fit, expanding its restaurant and retailer base, and launching subscription programs.

Genuine Parts Company: Why Are They Carrying Out The Expansion and Scaling of Company-owned Stores? – Major Drivers

By Baptista Research

  • Genuine Parts Company’s (GPC) latest Q4 2023 earnings reveal the company had a strong performance throughout the year, achieving a strong and solid fiscal year.
  • GPC’s total sales in 2023 exceeded $23 billion, a nearly $1 billion increase from the previous year, aligning with the company’s expectations.
  • Total company segment profit margins also improved by 50 basis points to nearly double digits, marking the third consecutive year of double-digit earnings growth for GPC. On top of this, the company returned $788 million to shareholders and reported a 68th consecutive annual increase in dividends.

When Will Deflationary Mindset of Managers Disappear? Some Companies Have Begun to Change, Though

By Aki Matsumoto

  • Overseas investors have increased buying Japanese stocks in anticipation of acceleration in profit growth due to the shift to inflation. This is consistent with the trends of ROE and TOPIX.
  • As far as ROE trends are concerned, neither share buybacks nor dividends are sufficient. It may be said that many managers are still dominated by a deflationary mindset.
  • Companies with high foreign shareholdings are seeing changes that are starting to use cash more effectively. However, it’ll take time, as most companies will start to move after asking around.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Trip.com Group , Sony Corp, Instacart, Korea Stock Exchange KOSPI 200, Betterware de Mexico Sab de CV, Molson Coors Brewing Co B and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary
  • Sony Corporation: Expansion of smartphone market
  • Maplebear Inc (Instacart): A Tale Of Strong User Growth & Improving Customer Engagement! – Major Drivers
  • EQD | Where to BUY the KOSPI On The Upcoming Pullback
  • BWMX: Blowout 4Q, Dividend Raise Demonstrates Power of Model; Raising PT & EPS
  • Molson Coors Beverage Company: Its Market Share Growth in U.S. Industry A Big Green Flag? – Major Drivers


Hong Kong/China Finally Bottoming?; Bullish Outlook Intact; DXY Rolling Over; Buys in Discretionary

By Joe Jasper

  • Since early November 2023 we have been expecting global equities (MSCI ACWI) to stage a year-end rally that would continue into the early part of 2024.
  • As we progress through the “early part” of 2024, more global indexes and Sectors are breaking out and starting to participate in the upside. This is classic bull market behavior.
  • Our outlook remains bullish; continue to ride this trend higher, and treat pullbacks as buying opportunities. Actionable Themes: Hong Kong/China, Consumer Discretionary, Industrials, Energy/Coal, and Polish Banks

Sony Corporation: Expansion of smartphone market

By Baptista Research

  • Based on the Q3 consolidated financial results announcement for Sony Group Corporation for FY 2023, the company showed considerable resilience against some difficult market conditions.
  • One critical highlight was the significant increase of 22% in consolidated sales for the quarter compared to the same quarter the previous fiscal year, reaching a record high of JPY 3,747.5 billion.
  • Notably, the operating income and net income also increased substantially year-on-year and reached the second-highest level on a quarterly basis.

Maplebear Inc (Instacart): A Tale Of Strong User Growth & Improving Customer Engagement! – Major Drivers

By Baptista Research

  • Instacart recorded a robust fourth quarter in 2023 and an encouraging outlook for 2024.
  • The company attributes their success to the top-notch product experience they provide with a leading selection, quality, and speed.
  • New and expanded partnerships, such as those with Kroger and Costco, boost Instacart’s selection advantage with some of the most significant grocers in North America.

EQD | Where to BUY the KOSPI On The Upcoming Pullback

By Nico Rosti

  • The KOSPI 200 INDEX has been rallying since January 2022, roughly up +22.5%, the rally can continue, but soon there could be a pullback, possibly this coming week.
  • If the index falls from its current highs, where are the best support levels to go LONG again?
  • The price area between 355 and 345 is where the index could find support and resume the uptrend.

BWMX: Blowout 4Q, Dividend Raise Demonstrates Power of Model; Raising PT & EPS

By Small Cap Consumer Research

  • We are raising our price target for BWMX to $22.50 (from $17) increasing our 2024 top and bottom line projections and rolling out 2025 projections after Betterware de Mexico registered 4Q upside on virtually every level, with the Betterware division returning to YoY top line growth for the first time in eight quarters, and 9.6% YoY revenue growth for JAFRA Mexico with materially better than expected margins.
  • The company continued to reduce overall debt levels and raised the dividend rate by 25%, with initial 2024 guidance materially above Street expectations.
  • Management also confirmed the coming expansion of Betterware into the United States (in 2Q24) and first signs of a key turn at JAFRA USA. We believe Betterware is once again situated to drive material expansion, and we are increasing our 2023 revenue and EPS projections to Ps.

Molson Coors Beverage Company: Its Market Share Growth in U.S. Industry A Big Green Flag? – Major Drivers

By Baptista Research

  • Despite global challenges on the macroeconomic and industry fronts, the Molson Coors Beverage Company reported strong performance and growth during its Fourth Quarter and Fiscal Year 2023.
  • The company announced significant increases in global net revenue and bottom line, with a growth of over 9% and nearly 37% respectively.
  • This marks the company’s highest reported dollar results on record, surpassing the already impressive results of 2022.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Trip.com, Trip.com Group , Fast Retailing, Trial Holdings, Adeia, Airbnb , Marriott International, Miniso, Xiaocaiyuan International Holding, Coca Cola Co and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target
  • Trip.com (9961 HK): Looks to Reap More Recovery Benefits
  • HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing
  • Trial Holdings IPO: The Investment Case
  • ADEA: Adding More Licensees
  • Airbnb Inc: Increased Supply & Better Conversion Rates Can Lead To A Solid 2024? – Major Drivers
  • Marriott International: Increased Demand from Corporates and Leisure Customers Changing The Game? – Major Drivers
  • [Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24
  • Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth
  • The Coca-Cola Company: What Is The Impact Of Changing North American Market Dynamics? – Major Drivers


Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target

By Ming Lu

  • The main businesses, hotel and air ticket bookings increased by 131% YoY and 86% YoY in 4Q23.
  • The Chinese traveling market continued its recovery after the lift of the lockdown at the end of 2022.
  • The stock price is close to our last price target – Downgrade to Hold.

Trip.com (9961 HK): Looks to Reap More Recovery Benefits

By Osbert Tang, CFA

  • Trip.com Group (9961 HK) has a remarkable 4Q23 with adjusted net profit surged 437.1% YoY. Higher volume and better market efficiency have resulted in massive margin expansion.
  • Net cash has ballooned to about 15% of its share price, and this has allowed it to carry out a massive US$300m Capital Return Program in 2024.
  • Business has outperformed the industry in CNY, with domestic hotel and air business volume increased by 60% and 50% YoY. Its overseas platform also saw double-digit growth.

HK CEO & Director Dealings (23 Feb 2024): Fast Retailing, Far East Consortium, Pharmaron Beijing

By David Blennerhassett


Trial Holdings IPO: The Investment Case

By Arun George

  • Trial Holdings (5882 JP), a discount store operator in Japan, is seeking to raise US$235 million at the IPO reference price of JPY1,550 per share. Pricing on 11 March.
  • Trial aims to act as a one-stop shopping store where consumers can buy whatever they want at a great price. Trial’s basic pricing strategy is Every Day Low Price.
  • The investment case rests on steady revenue growth, industry-leading same-store sales growth, solid margin profile and cash generation.

ADEA: Adding More Licensees

By Hamed Khorsand

  • ADEA reported fourth quarter results showcasing debt reduction through free cash flow generation. ADEA had eight license signings of which two were brand new licensees
  • Reported fourth quarter results showcasing debt reduction through free cash flow generation. ADEA had eight license signings of which two were brand new licensees
  • ADEA has started to invest more in R&D, which resulted in ADEA ending 2023 with nearly 11,000 patents compared to approximately 10,000 in the year prior

Airbnb Inc: Increased Supply & Better Conversion Rates Can Lead To A Solid 2024? – Major Drivers

By Baptista Research

  • Airbnb’s Fourth Quarter earnings for 2023 revealed significant financial growth, with 99 million Nights and Experiences booked in Q4, marking Airbnb’s highest ever fourth-quarter results.
  • Revenue increased by 70% year on year to reach $2.2 billion.
  • However, the net loss for the company stood at $249 million.

Marriott International: Increased Demand from Corporates and Leisure Customers Changing The Game? – Major Drivers

By Baptista Research

  • Marriott International delivered strong results in 2023 due to robust demand for travel and an increasing portfolio of over 30 leading brands.
  • The global room revenue per available room (RevPAR) grew nearly 15%, and net rooms increased 4.7%, driving profitable growth in earnings and cash flows.
  • For the fourth quarter, global RevPAR rose over 7% year-on-year, propelled by roughly equal growth in average daily rate (ADR) and occupancy levels.

[Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24

By Eric Wen

  • Intra-Urban mobility in major cities and foot traffic in leading shopping malls in China have demonstrated decent growth during 2024 CNY holiday period.
  • We estimate Miniso domestic store sales increased 35% yoy during CNY-holiday and 11% yoy during Jan to mid-Feb 2024. We expect Miniso total revenue to increase 26% yoy in 1Q24.
  • We maintain the stock as BUY and maintain TP at US$33/ADS.

Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth

By Ethan Aw

  • Xiaocaiyuan International Holding (XCY HK) is looking to raise up to US$200m in its upcoming HK IPO.
  • Xiaocaiyuan is a Chinese home-style cuisine restaurant operator. It prices its menus’ items to achieve average spending per consumer between RMB50 and RMB70 for its dine-in customers at its restaurants. 
  • In this note, we talk about the company’s historical performance.

The Coca-Cola Company: What Is The Impact Of Changing North American Market Dynamics? – Major Drivers

By Baptista Research

  • Coca-Cola provided overall positive results despite the ongoing global challenges they faced.
  • James Quincey, Chairman and CEO, specifically highlighted their “all-weather strategy,” which allowed them to attain 8% comparable earnings per share growth, despite notable headwinds from a 7% currency impact.
  • He attributed the year’s success to the company’s strategy and improved capabilities, making Coca-Cola a more agile and efficient global organization.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Vitesco Technologies Group, FirstCry, Honeys Holdings Co., Ltd., TSE Tokyo Price Index TOPIX, Currys PLC, Trial Holdings and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows
  • Brainbees Solutions (FirstCry) IPO | Channel Feedback
  • Sweet Honeys: A Profit Machine
  • Investors Want to See a Shift in Management to Create Value, Not Just Meet Government Target Numbers
  • JD.com and Elliot Interested in Unloved Currys
  • Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation


Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.
  • The official index changes for the March 2024 review could be announced after the close of 5th March 2024.
  • I currently do not see any changes for the DAX index but there could be one change for the MDAX index.

Brainbees Solutions (FirstCry) IPO | Channel Feedback

By Pranav Bhavsar

  • We visited FirstCry Franchisee stores in Ajmer (Rajasthan), and Hosur (Tamil Nadu).
  • FirstCry has a high brand recall, limited competition, and healthy franchisee relations.
  • The ability to leverage FirstCry and Baby Oye is a good margin lever.

Sweet Honeys: A Profit Machine

By Michael Causton

  • Low cost apparel retailers have enjoyed a significant uptick in the past few years as consumers look to polarise their spending further between cheaper basics and luxury treats. 
  • But the real change is in improving profitability. One the biggest beneficiaries has been Honeys, a low cost womenswear retailer that has seen a revival in the past few years.
  • Operating profit has tripled since 2018. Can it last? Work on creating its own low cost manufacturing base suggests it can.

Investors Want to See a Shift in Management to Create Value, Not Just Meet Government Target Numbers

By Aki Matsumoto

  • In 2023, % Woman Board Members increased progressively even in companies with lower corporate governance scores. Many companies are unanimous in their commitment to appointing women board members.
  • Together with the fact that business challenges have not been solved by only having people who think alike, 90% of institutional investors said that information on women’s activities is important.
  • Companies with over 25% women on their boards have superior values in profitability and stock valuation. Managers should implement the promotion of women in order to transition to value-creating management.

JD.com and Elliot Interested in Unloved Currys

By Jesus Rodriguez Aguilar

  • Both Elliot (62p/share prospective offer) and JD.com (9618 HK) are interested in Currys PLC (CURY LN) a battered (but with long history) UK retailer of electronics and appliances.
  • Currys has been reshaping since 2008, without the market giving credit by the looks of the share price. This time might be different with focus on higher-margin services and credit.
  • On a comparables EV/EBITDA basis, my fair value estimate is 76p/share (£861 million implied equity value), 23% above Elliot’s offer. The Board may be willing to engage around that figure.

Trial Holdings Pre-IPO – Updated Peer Comparison and Valuation

By Sumeet Singh

  • Trial Holdings (5882 JP) (TH) is now looking to raise around US$234m in its Japan IPO, after having canceled its prior listing attempt last year.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the company’s past performance in our previous notes. In this note, we provide our updated thoughts on valuation.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars



Daily Brief Consumer: Snow Peak Inc, PAL GROUP Holdings Co., Ltd., Etsy Inc, NIFTY Index, Dentsu Inc, Garrett Motion, PDD Holdings, Bassett Furniture Inds, Polaris Holdings and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Snow Peak (7816) – Bain Deal at ¥1,250 – 46% Premium Is Nice, Not A Home Run
  • Snow Peak (7816 JP): Bain-Backed MBO at JPY1,250
  • Pal Group: Another Record as Founder Retires
  • Etsy Inc (ETSY) – Tuesday, Nov 21, 2023
  • EQD | NIFTY’s Rally Resistance Targets Approaching: Reversal?
  • Dentsu Group – Return to organic growth forecast for FY24
  • GTX: Turbo of a Buy Back
  • Pinduoduo, Inc:  Rotation Continues
  • Bassett Furniture Industries, Inc. – A Survivor Pursuing Success
  • Polaris Holdings (3010) – Strong Underlying Growth Profile to Continue


Snow Peak (7816) – Bain Deal at ¥1,250 – 46% Premium Is Nice, Not A Home Run

By Travis Lundy

  • The possibility/likelihood of a “¥50bn MBO” for Snow Peak Inc (7816 JP) was leaked in a Nikkei article last Friday. It went limit up two days in a row. 
  • That TOB price is more than 70% off its three-year high. That will certainly disappoint some. Separately, the price seems a bit low given growth. 
  • The family and friends own ~42% so if someone gets upset, or uppity, there could be a challenge. Just because an MBO exists doesn’t mean people have to tender in.

Snow Peak (7816 JP): Bain-Backed MBO at JPY1,250

By Arun George

  • Snow Peak Inc (7816 JP) has recommended a Bain Capital-sponsored MBO tender offer at JPY1,250 per share, a 58.0% premium to the undisturbed price (15 February). 
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 38.13% ownership ratio.
  • Based on the irrevocables, the minimum acceptance condition requires a 52.8% minority acceptance rate. While not a knockout offer, the acceptance condition is achievable.  

Pal Group: Another Record as Founder Retires

By Michael Causton

  • Pal Group’s founder retired last month after 50 years at the helm. 
  • Since 2001, the fashion to variety store business has grown from ¥10 billion to a forecast ¥184 billion this year.
  • There remains growth potential in the variety store chain, 3Coins, as well as a revival in the fashion side.

Etsy Inc (ETSY) – Tuesday, Nov 21, 2023

By Value Investors Club

Key points

  • ETSY’s end markets are expected to grow at a high single digit rate, allowing for 10% compound annual growth rate in Gross Merchandise Sales (GMS)
  • ETSY’s international market, comprising 45% of revenue, is growing faster than its US market
  • ETSY has room to increase its take rate slightly, with its current rate of 19.8% in line with industry standards, positioning the company for continued growth in e-commerce.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


EQD | NIFTY’s Rally Resistance Targets Approaching: Reversal?

By Nico Rosti

  • The NIFTY Index has been rising for 5 days in a row, this is the second week up (CC=+2), there is a good chance it will pullback soon.
  • The index is going towards the Q3 resistance level at 22354, that would be a good area from where to start to prepare for a pullback.
  • Going SHORT may not be worth it, the right trade is to wait for the pullback and go LONG again at better prices.

Dentsu Group – Return to organic growth forecast for FY24

By Edison Investment Research

Dentsu’s FY23 net revenue was a touch above guidance at Q3, with a better-than-expected operating margin reflecting a good Q4 in Japan, further boosted by a short delay in an IT project pushed out to Q124. The results were accompanied by the news of a change in global CFO, with the role reverting to Yushin Soga, who held the role until January 2023. As anticipated, net revenue outside Japan declined, although there was some trading improvement in the US in Q4. A thorough business review is now in progress, with the next mid-term plan due early in H2. In the meantime, the balance sheet is strong, with leverage reduced to 0.6x EBITDA, and share buybacks will be resumed. We regard the rating as undemanding.


GTX: Turbo of a Buy Back

By Hamed Khorsand

  • GTX reported results affirming our investment thesis on how the business can generate substantial free cash flow with an outlook of little to no sales growth
  • Ahead of the results, we had brought down our numbers on the expectation a flattish year could result in sales and adjusted EBITDA being more in line with 2023
  • GTX issued a 2024 guidance suggesting we would be towards the lower end of their guidance range as new programs should hold sales closer to 2023 levels

Pinduoduo, Inc:  Rotation Continues

By Steven Holden

  • Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.
  • 13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%
  • New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.

Bassett Furniture Industries, Inc. – A Survivor Pursuing Success

By Water Tower Research

  • We are initiating coverage of Bassett Furniture Industries, Inc., publicly traded under the ticker BSET.
  • Bassett primarily operates in two segments: Retail and Wholesale.
  • A third segment, Corporate & Other, accounts for corporate and unallocated expenses, as well as the operating results of Noa Home, a recent e-commerce acquisition.

Polaris Holdings (3010) – Strong Underlying Growth Profile to Continue

By Astris Advisory Japan

  • Hotel demand ahead of expectations – Q1-3 FY3/2024 results were driven by strong underlying demand for hotel operations.
  • The domestic business was boosted by a robust market environment where visitor numbers for domestic and overseas customers exceeded pre-pandemic levels, helping drive Q3 FY3/2024 RevPAR by 43.5% YoY.
  • Despite a high run rate versus company guidance for sales and exceeding recurring profit and net income, there has been no revision from the company, indicating a potential for an overshoot in our view. We believe inbound and domestic demand will be sustained.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars