Consumer

• It seems like every week, Bloomberg reports a HK-listed company weighing privatisation options. HKBN (1310 HK), ESR (1821 HK), and Samsonite (1910 HK) have all been rumoured of late.
• Last Friday, Samsonite announced it was focused on pursuing the listing of its shares on a second exchange.
• No preferred exchange was mentioned. Nor whether the goal is to secure a dual primary listing, or a secondary listing. A buyout, for now, appears to be on the backburner.

• It’s time to revisit the network of Alibaba’s ( Alibaba Group Holding (9988 HK) ) affiliated listed companies for near term investment opportunities
• After investing in an ecosystem of online and offline companies over the last 10 years, Alibaba is rapidly restructuring its businesses to refocus on its most profitable opportunities
• Sun Art Retail (6808 HK) will benefit from the synergies of Baba’s restructuring

• Total revenue grew by 22.6% YoY in 4Q23, three percentage points higher than we expected.
• MT’s operating profit broke even for the fiscal year 2023.
• We conclude an upside of 113% and a price target of HK$188. Buy.

• In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the June 2024 index rebal event.
• I currently see 5 ADDs and 5 DELs but there are several names close to the border and expectations could change before the base date as prices move around.
• The estimate for one-way flow in June 2024 is US$1.22bn.

• You know it’s bad when Tesla’s delivery trends blow through even my lowest estimates, which already had trailed market projections.
• With no help from the hapless CyberTruck which, not surprisingly, continues to shoot Tesla in the foot.
• See my latest Q1 and full-year estimates—which still prove to be too high.

• Fund Manager Positioning In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.
• Investors have been underweight commodities now for the past 4 months (longest underweight streak since Aug’19) Compared to the past 20-year z-score, fund managers remain heavily underweight in commodities and even more in energy.
• In March fund managers added to their energy position but reduced overall commodities like grains, softs and metals on a MoM basis — the latest BofA survey shows.

• United Arrows (7606 JP) is an industry leader in operating clothing select shops in Japan, and is the eighth largest apparel company in the country in terms of sales value.
• In FY03/23, United Arrows reported revenue of JPY130.1bn, operating profit of JPY6.4bn, recurring profit of JPY6.9bn, and net income attributable to owners of the parent of JPY4.3bn
• In May 2023, the company announced its long-term vision ending in FY03/33 and medium-term management plan ending in FY03/26 as the first step.

Meituan has released FY 2023 numbers that were excellent in our view, with significantly improved profitability and solid cash generation. The financial risk profile has strengthened further, with a large and growing net cash position coupled with robust leverage and coverage ratios. Liquidity is sound. We expect FY 2024 to be a better year for the company.

We revise our Credit Bias on Meituan to “Positive” from “Stable”, given the material increase in profitability and strong cash-flow generation following the pandemic. That said, we do not expect ratings upgrades in the near future.

• We are reiterating our Buy rating, $10 price target and projections for Vera Bradley after visiting stores in Connecticut and Long Island.
• We believe, as we near the launch of management’s full vision for Vera Bradley in July, both the outlets and main line locations increasingly reflect what is being added and what will be discarded in the shift.
• As such, we are seeing less inventory, especially in the outlet stores, flow in; further, there is an increasing emphasis on core categories, especially handbags, totes and luggage.

• We are reiterating our Buy rating and $0.25 price target for Starco Brands with the company announcing 4Q23 (December) results after the close on Monday.
• We believe 2024, with a full compliment of unique, value-added brands which leverage Starco’s aerosol and marketing infrastructure in hand, and a laser focus on adding key categories and new relationships, is shaping up as another year of material progress for Starco.
• We believe there are also continued margin expansion opportunities from both economies of scale and the company’s manufacturing expertise.

• ZOZO Inc (3092 JP) is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.
• All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. 
• Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.

• Concerns around slowdown in growth are behind the disconnect between PDD’s stellar 4Q23 results and lackluster share performance, in our view.
• We have seen this before. If history is a guide, its valuation will improve after growth hits bottom in 1Q24.
• We expect PDD to deliver 50% plus growth for 2024 and generate US$14 billion adjusted net profit. Reiterate US$240 billion target market cap or 50% upside.

• Fu Shou Yuan (1448 HK)‘s net profit grew 20.1% in FY23; and if not a withholding tax of Rmb87.4m, its net profit would have increased by over 30%.  
• Including a special DPS of HK$0.2139, full-year payout ratio reached 98.5%. Still, it has net cash of Rmb2.7bn or 24% of its market capitalisation.
• Profitability outlook is encouraging – structural demand increase, higher ASP, and well-contained costs. Its land reserve is enough to be consumed for 82 years.

• PDD reported C4Q23 top-line, non-GAAP EBIT, and non-GAAP net income (2.4%), 12.4%, and 24% vs. our est., and 11.6%, 37.0%, and 50.3% vs. cons., respectively;
• We estimate the beat was driven by (1) improved take rate on the China platform following ad tool adjustments, and (2) Temu margin expansion;
• We remove Temu US from our model from 2025+, as restrictions seem more than likely following the TikTok ban and cut TP to US$ 159 to reflect this;

• The trade of being short Fast Retailing (9983 JP) vs Nikkei 225 or Sector Basket is fundamentally slightly short Nikkei 225 froth.
• Giordano (709 HK)‘s SGM will likely pivot off how the shareholders under Halcyon Securities vote. Digging a little deeper as to who these shareholders are, provides some (not-altogether) surprising results.
• AZ-Com Maruwa Holdings (9090 JP) intends to launch a Tender Offer on Chilled & Frozen Logistics Holdings (9099 JP) without having contacted C&F first. A HOSTILE deal. Yum!

• Companies with the highest Disclosure in English scores have the highest ROE, Tobin’s Q, Market Capitalization, and Foreign Shareholder Ratio, while companies with the lowest scores have the lowest values.
• Companies with the highest Disclosure in English scores also show generally higher Board Practices and Key Actions. Both Disclosure in English and these practices are the result of engagement efforts.
• If Disclosure in English and corporate governance efforts are advanced through engagement, it can be hypothesized that profitability will also increase through engagement with overseas investors.

• GoTo Gojek Tokopedia (GOTO IJ) 4Q2023 results revealed another sequential increase in GTV and positive adjusted EBITDA for both ODS and e-commerce, despite reduced incentive and marketing spending.
• GoTo achieved positive top-line growth by expanding its total addressable market through more affordable products and a strong performance from consumer lending in fintech, coupled with great cash cost efficiencies.
• 2024 will be a transformational year for GoTo without the yoke of Tokopedia promotional spending but with significant cash coming in every quarter that can be used to drive growth.

• Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world’s largest auto market.
• The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31.
• Tesla previously announced a price increase of $1,000 for the Model Y in the United States and 2,000 euros ($2,542) in Europe.

• BLD offers comprehensive services for roofing, including material selection, expert installation, and post-installation service.
• They are known for their focus on high-quality materials, professional installation, and exceptional customer service.
• BLD has established itself as a leader in the industry, serving both residential and commercial markets with a commitment to meeting the evolving needs of the construction industry.

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.

• On 22 March, the Korea Exchange announced special changes to KOSDAQ 150. CanariaBio will be excluded from KOSDAQ 150 and it will be replaced by C&C International.
• Canaria Bio was designated as “administrative issue” and “investment attention issue” on 22 March 2024, which resulted in KRX deciding to remove this stock from KOSDAQ 150 on 26 March.
• We believe that this inclusion of C&C International in KOSDAQ 150 is likely to further positively impact its share price.

Games Workshop Group has reported that trading for the three months to the end of February 2024 is in line with expectations. The fourth dividend of the year has been declared at 105p/share, which takes the year-to-date total to 420p/share, marginally ahead of the 415p/share declared in FY23 at a similar stage. The declared dividend compares with our prior estimate of 425p/share, and we have therefore nudged our estimate down to be consistent with the amounts declared.

• This is our first report on automotive retailer, Lithia Motors.
• The company had a strong Q4 2023, with revenues growing by 11% from last year to reach $7.7 billion.
• The company’s revenue increase was primarily driven by robust new vehicle sales, with same-store units increasing by 10% and aftersales revenues growing by 3%.

• This is our first report on dining restaurant chain, Texas Roadhouse Inc.
• The year 2023 proved to be a successful year for the company.
• Texas Roadhouse generated over $4.6 billion in revenue and saw an increase in average unit volumes to more than $7.6 million.

• According to the Q4 2023 earnings of Archer-Daniels-Midland Company (ADM), the company reported adjusted earnings per share (EPS) of $1.36 for the quarter.
• For the fiscal year, the company reported adjusted EPS of $6.98.
• The firm had an adjusted Return on Invested Capital (ROIC) of 12.2%.

• In its latest earnings, Williams-Sonoma, Inc.
• recorded a performance marked by both successes and challenges.
• In Q4, the company saw a -6.8% comp, -7.4% in the 2-year comp, and a +29.1% in the 4-year comp.

• This is our first report on DICK’S Sporting Goods.
• The leading sports goods and outdoor retailer is significant in its sales growth, paired with its impressive development project, House of Sport.
• Full year sales reached $13 billion, marking a notable increase in market share.

• The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
• This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further >100% growth guidance for 2024.
• The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 

• PepsiCo is a global company with significant presence in both snacks and beverages, generating around $80 billion in revenue
• Despite the impact of COVID-19 on its business, PepsiCo has maintained strong performance
• The company’s Beverages North America segment contributes a third of sales but only 22% of EBIT, while Frito Lay North America accounts for 25% of sales but 50% of EBIT

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.

• In the past, value traps were macro environment that couldn’t generate profits in deflationary economy, and micro problem of managers who didn’t listen to constructive management improvement proposals from investors.
• The introduction of Stewardship Code and Corporate Governance Code, and TSE’s request for change in awareness of companies, has reduced the risk of activist investors’ investment strategies flailing around in vain.
• Management awareness has just begun to change, and few companies generate intrinsic value, as evidenced by the fact that ROE hasn’t begun to improve. Activist investors will continue taking interest.

• Nippon Suisan Kaisha (1332 JP) reported 8% YoY revenue growth in 9MFY23, driven by 17% YoY growth in food products business on higher commercial volume and prices.
• However, marine products profits tumbled 39% YoY on weakening fish prices and accounting adjustments.
• The company raised FY23 sales and operating profit guidance to ¥825B (up 7% YoY) and ¥29B (up 18% YoY), respectively.

• Xponential Fitness has shown strong financial performance post IPO, with adjusted EBITDA increasing significantly
• The company faced a coordinated short attack leading to a major drop in share price in 2023
• Shares are currently undervalued with strong growth potential and valuable assets, making it an attractive investment opportunity

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.

• We are reiterating our Buy rating on GES, raising our price target to $37 (from $32.50) and rolling out FY26 projections after Guess?
• ended FY24 with a strong 4Q which easily beat both top and bottom line Street expectations and announced a $2.25 per share special dividend.
• Further, initial FY25 projections, which incorporate the acquisition of Rag & Bone, handily beat Street top line projections and bracket bottom line expectations, even as Guess?

• WK Kellogg is a consumer staple company with low risk and attractive valuation
• Recent spin-off has unlocked self-help opportunities for potential upside for patient shareholders
• Projections show EBITDA margin growth, significant upside in sales growth and free cash flow, with focus on cereal brands and achieving mid-teens EBITDA margins by end of 2026, projected 100-250% total upside over three years.

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.

Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.

• Every year it’s the same trade. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
• But there may be ¥1.0-1.2trln+ to buy on one day into the close later this month, then ad hoc buys of ¥630bn and index sells of ~¥600bn  2 days later.
• Over the past ten years, the two day return on the March trade is great. This year the Nikkei funding trade makes things more complicated. 

• Last month, a Cheng family vehicle with 24.06% of Giordano (709 HK), requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus three other NEDs/INEDs.
• That SGM will be held on the 3rd April. The director resolutions – both the removal and appointments – are “ordinary”, requiring a simple majority vote. 
• The outcome will likely pivot off how the shareholders under Halcyon Securities will vote. So I dug a little deeper as to who these shareholders are, with some surprising results.  

• Trial Holdings (5882 JP) priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.
• We previously discussed the IPO in Trial Holdings IPO: The Investment Case and Trial Holdings IPO: Valuation Thoughts. 
• The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive. 

• Xtep International (1368 HK) announced in-line 2023 results, with net profit up 12% yoy and sales up 11% yoy.  2024 outlook was also satisfactory. 
• The company paid out 50% of its earnings in dividend, which amounted to a 5% dividend yield at current share price of HKD5.04.
• The company is currently trading at 10x 2024 PE (assuming a conservative 10% net profit growth in 2024).

• Both advertising revenue and commission revenue grew dramatically in 4Q23.
• Chinese consumers are seeking low price goods, after the economy went weak.
• PDD’s overseas brand, TEMU, is expanding rapidly in the U.S.

• Carote Ltd (CARO HK) is looking to raise around US$150m in its upcoming Hong Kong IPO. The bookrunners on the deal are BNP Paribas, and CMB International.
• Carote is a distributor of kitchenware products. Expanding its lineup of products, the firm aims to meet its customers’ varied kitchen scenarios and enhance their culinary experience.
• Initially engaged to provide original equipment manufacturing (OEM) overseas, the firm has since ventured into the online retail sector, introducing kitchenware products under its own brand name “CAROTE”.

• In Q3FY24, Maruti Suzuki India (MSIL IN) reported revenue of INR 335Bn, a growth of 14.6% YoY on the back of higher realization and volume.
• EBITDA margin expanded 210bps YoY to 12.3% as higher volume, favorable commodity price played a role in tandem.
• The company is planning 2x increase in its annual production capacity to about 4Mn by 2030-31. Capacity expansion plans augur well for the company in medium to long term.

• GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 4Q2023 results yesterday which shows that the company’s profitability has significantly improved.
• The improvement in profitability has come at the cost of growth which has continued to decline suggesting profits may not be sustained.
• GoTo announced that it has completed the Tokopedia partnership deal with TikTok and also a plan to buyback shares, subject to regulatory/shareholder approval.

• Mixue Group is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
• In our earlier notes, we have looked at the past performance and undertaken a peer comparison. In this note, we provide our initial thoughts on valuation.

• This is our first report on Tempur Sealy International Inc., a global bedding company.
• The company released its Q4 2023 earnings recently.
• The company emphasized its strong business model, highlighting significant cash flow and a robust balance sheet.

• According to public news two days ago, COFCO Group is rumored to be a potential suitor for Alibaba’s 78% stake in Sun Art Retail (6808 HK).
• Alibaba wants to eventually get rid of the Sun Art stake, especially after Alibaba’s management change in late 2023.  
• Given limited downside, I believe it is worth a bet on the uncertain timeline but certain intention of the eventual divestiture of Sun Art by Alibaba.

• Cisarua Mountain Dairy (CMRY IJ) held an analyst call after its results, revealing a positive outlook for dairy products and premium consumer foods, with potentially higher margins ahead.
• The company launched several new products in 2023, with more of a focus on affordability through yoghurt sticks. It will launch more affordable Kanzler Singles in 2H2024.
• Cisarua Mountain Dairy will expand distribution through general trade and Miss Cimory MCM, with ongoing sales & marketing spending. Valuations remain attractive relative to growth and returns. 

• Snow Peak agreement with Bain Capital to take the outdoor brand private next month seems to have been in the works for a couple of years. 
• Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas instead.
• Even so, the MBO price looks cheap. Snow Peak is likely to see a rebound in domestic sales in FY2024 and its plans for overseas expansion are solid.

• Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
• 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 talk about the trading dynamics.

• LIFULL reported an 8% increase in net sales to ¥8.1 bn, driven by overseas acquisitions made during the second quarter of the previous FY.
• OP from comparable operations remained steady at around ¥0.15bn. In the previous year, the company recorded an operating profit of ¥0.8bn, but this included ¥0.66bn in profits from the sale of Rakuten LIFULL STAY, a hotel and lodging platform operator, in October of 2022.
• In the current term, the company recorded a net loss of ¥0.05bn, but this included about ¥0.2bn in one-off costs for the transition to a new management structure in the overseas business. 

• Taste Gourmet (8371 HK) will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. 
• We expect the company to end FY24 with >180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)
• Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24

• Chinese stocks feel like loaded springs to me now. I have played this so far by buying DADA at $1.50 (I think I posted it at $1.67 ish) and closed it with a very nice profit at $2.6ish.
• I did buy RERE at $1.15 and sold my last shares at $1.85. Unfortunately I was too late to post a write-up as I got reporting dates confused.
• But maybe we get to have another go at this one. I had DQ on my watch list, I expected negative earnings, but their report was slightly better than expected and shares jumped from $18 to nearly $30 in a few weeks. 

• Tongcheng Travel Holdings (780 HK) has a solid FY23 and 4Q23 with massive net profit recovery. Earnings momentum for FY24 and FY25 look to stay impressive.
• FY23 is a record year of profit, demonstrating its ability to gain market share after COVID-19 disruption. Further volume growth will lead to better operating leverage.
• Net cash reached Rmb2.3bn, up 90.4% YoY, showcasing its cash-generating ability. The first-time dividend payout also reflected management’s confidence on the outlook.

• Recent newsflow suggests positive developments bode well for Meituan’s fundamental.
• Yet 50% share price rebound since February low means it is largely in price and 4Q23 results will serve as a window for investors to read 2024 outlook.
• We would take some profits from the rally and wait for better entry points.

• This is our first report on American Express Global Business Travel (GBT).
• The company recently released Q4 2023 earnings.
• On a positive note, the company delivered impressive financial results, with standout numbers including 24% year-over-year revenue growth and a roughly fourfold increase in adjusted EBITDA. Paul Abbott, CEO, attributed this strong performance to share gains and a focus on margin expansion.

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
• In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELETEs.

• This is our first report on ed-tech major, Coursera.
• The company had a successful fourth quarter, marking a strong close to the year.
• The company welcomed 24 million new learners in this period, bringing their base to more than 140 million and seeing an increase in annual revenue of 21% over the previous year.

• Southern Cross Media (SXL AU) is re-engaging with ARN Media (A1N AU)/Anchorage at A$0.296 cash per share and 0.870 A1N shares per SXL share. Eligible shareholders get franking credits worth A$0.127.
• SXL’s re-engagement was driven by major shareholders, who are also supporting a motion to remove Mr Rob Murray as chairman due to the glacial pace of negotiation.
• While the offer is light compared to long-term adjusted exchange ratios and historical prices, large shareholders are supportive. Shares are trading through terms due to the large franking credits.  

• 99 Speed Mart Retail Holdings (99SPD MK) is looking to raise around US$300m in its upcoming Malaysia IPO. The bookrunner on the deal is CIMB Investment Bank Berhad.
• 99 Speed Mart Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
• Based on IMR, the firm was the largest mini-market player and a leading groceries retailer in Malaysia, with a market share of 37.9% and 11.1% based on 2022 sales, respectively.

• Neither Elliot nor JD.com (9618 HK) intend to pursue Currys PLC (CURY LN) at this stage and thus won’t be able to present an offer for the next six months.
• Currys has issued an upbeat trading update. My new TP is 78p/share, >16% above Elliot’s sweetened offer, 10.4x 24e P/E vs 7.6x currently, and 9.1x 25e P/E vs 6.6x currently.
• My TP implied equity value is 864 million. I believe the Board and top shareholders would be willing to consider offers around 80p.

• A liquid proxy for China’s recovering consumption (with no technology regulation risk)
• A quality red chip company at a very reasonable valuation
• Growing sales and margins as its premiumisation strategy is executed

• Viator offers a wide range of unique activities and tours around the world
• The Fork allows users to book tables at restaurants globally
• TripAdvisor remains a key player in the travel industry with an undervalued stock, presenting an attractive investment opportunity

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.

Borussia Dortmund’s first team was successful in progressing through to quarter finals of the Champions League, which naturally leads to an upgrade in profit guidance for the year, as reaching the ‘round of 16’ was in prior guidance. This follows confirmation that the first team will compete in the revamped FIFA Club World Cup to be played in the summer of 2025, which is likely to be significant for financial results and very helpful in the long-term development of the brand and fanbase.

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.

• China Vanke
• Nickel Industries

• This is our first report on mobile game developer, Playtika Holding Corp’s fourth-quarter 2023 earnings showcased a resilient execution of its strategy amidst revenue headwinds and market challenges.
• It successfully managed to surpass its guidance for both revenue and credit adjusted EBITDA. The company marked 2023 as an efficiency-driven year, with a transformation strategy focusing on speed and decision-making.
• Despite several challenges on the revenue front, Playtika identified some bright spots such as growth in the casual games segment, which expanded 5.5% YoY, driven by growth in June’s Journey.

• Fast Retailing (9983 JP) is the largest weight in the Nikkei 225. On Friday, it closed at 11.36% of the Nikkei 225, putting it well above the 10% cap level.
• If the stock is above 10% on a pro-forma basis on the base date of 31 July 2024, it will get a capping coefficient. 2.8mm shares (US$2.5bn) to sell.
• At Friday’s close, we were borderline above a double-downweight trigger. At Monday’s open, just below. 30mins later? Back well above. Lots of interesting issues and nuances here for a short.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, Hong Kong appears to be heading towards its first US$100m+ IPO for the year.
• For placements, after a flurry of placements in the prior week, past week was relatively quiet with only the US$2bn ITC Ltd (ITC IN) block.

• TCL Electronics Limited (1070.HK ) (“TCL”), with a market cap of HKD 7.57 billion (USD 968 million), is not your ordinary Chinese TV manufacturer.
• TCL focuses on mid-to-high end audio/video products like miniLED, QLED, Android, and smart TVs, ranking second in the global TV market behind Samsung.
• The Company also produces air conditioners, refrigerators, smartphones, tablets, and smart home devices. A recent catch-up with the IR team at TCL’s Shenzhen Industrial Park Headquarters intrigued us and we decided to dig a bit deeper.

• Hershey stock trading at 52-week low, making it attractive investment opportunity
• Drop in 10-year treasury yield making dividend-paying companies like Hershey more appealing to investors
• Challenges from new weight loss drugs affecting consumer appetite, but temporary dip creating discounted buying opportunity for strong brand

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.

• Great Wall Motor denied that many employees have resigned recently, but there many complaints from employees on social media.
• Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%.
• Weibo’s advertising revenue decreased, while most companies’ ad revenues have recovered.

• Most companies with large market capitalization (i.e., those with a high ratio of foreign shareholders) already disclose their financial statements, timely disclosure materials, and convocation notices in English.
• Disclosure in English of corporate governance reports and annual securities reports, which have lagged behind, is gradually increasing among companies with large market capitalization.
• Similar to the results of the recent disclosure regarding the ”TSE’s request”, there is also a difference in the disclosure stance between companies with large market capitalization and other companies.

• This is our first report on Cable One.
• The balancing growth strategy of the company indicated the progress during the fourth quarter of 2023, as the company reported customer growth driven by improvement in new connects year-over-year and sustained low churn rates.
• Focusing on specific new customer segments and adjusted market approach, the company has re-engineered its go-to-market approach to counter competition and expand network footprint.

• Naspers and Prosus continue to come under pressure relative to their underlying holdings.
• Since our last update on the 1st of March, Naspers’ look through discount has widened by 1.6 percentage points to 42%. 
• Naspers’ discount to Prosus’ market value has widened notably by 2.1 percentage points to 11.3%. Prosus’ discount is only 30bps wider and is trading at 35.4%.

• Toyota Motor Corporation continues to deliver robust financial performance despite a myriad of challenges.
• In the fiscal year 2024 second-quarter results, the Japanese automotive giant reported an operating income of JPY 2,559.2 billion.
• This was a significant increase compared to the same period of the previous fiscal year.

• Carvana has seen a big increase in its stock price despite concerns over bankruptcy that did not come to fruition
• The company has advantages in unit economics and is well-positioned to gain market share in the auto retail industry
• Carvana offers competitive pricing, quality, convenience, and selection, making it an attractive option for customers and investors alike

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.

• Carnival Corporation’s latest earnings suggest an optimistic outlook for the company as it reports setting records in all four quarters of 2023, with revenues, booking levels, and customer deposits seeing an all-time high.
• Encouragingly, both North American and European brand occupancy levels exceeded 101% in Q4, and per diems for these brands showed significant increases over 2019.
• The company’s performance enabled it to surpass high cost inflation over the past four years, delivering per unit Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) that outpaced 2019 levels when excluding fuel and currency fluctuations.

• Migao Group Holdings (9879 HK) is looking to raise up to US$124m in its Hong Kong IPO.
• Migao Group (Migao) is a vertically-integrated national potash fertilizer company in China.
• In this note, we look at the firm’s past performance and share our thoughts on valuation.

• Corporate Governance Code requires disclosure based on TCFD, and an ISSB-based disclosure system will be discussed in Japan. While interest in disclosing climate change-related information is growing, disclosure hasn’t progressed.
• In the TSE survey, only one-tenth of the companies that listed Scope 1, 2, and 3 emissions in their integrated reports disclosed them in their annual reports.
• If a company can’t disclose Scope 1/Scope 2 in its annual securities report, there’s concern that the company may have challenges in data collection and risk delaying management decisions.