Consumer

• We notice a pickup in consumer acceptance of instrashopping, as result of COVID-cultivated behavior. We notice similar business model worked outside of China (Coupang) for densely populated urban upper-middle-class customers;
• Meituan’s launch of membership is a wise step towards strengthening user stickiness and emphasizing transaction soundness over impulsive buying. Meituan’s portfolio in food, dining, hotel & travel offer unparalleled value;
• We see Meituan’s success in Hong Kong honed a replicable business model targeting single and low priced segment. Consolation on a global scale now seems a possibility.

• Alibaba Group Holding (BABA US)‘s FQ4 announcement portrays a resilient comeback to growth, suggesting the past four years’ challenges barely impacted its dominance in Chinese e-commerce.
• However, a closer look beyond the surface of Alibaba Group Holding (9988 HK)‘s FQ4 results announcement reveals that little has actually changed in recent months.
• Taobao and Tmall face challenges in a tough, stagnant market; AIDC’s growth largely covers for other Alibaba units’ failings, while AliExpress’s expansion cuts into margins.

• Along with its fiscal 2024 results, Alibaba (9988 HK) announced that they were preparing for their primary listing in Hong Kong and the conversion was expected to complete by August.
• If the conversion is completed by the end of August, Alibaba (9988 HK) could be added to Southbound Stock Connect in September and that could bring in significant flows.
• We do not forecast any passive inflows due to the change with Alibaba Group Holding (9988 HK) capped at 8% of the HSI, HSCEI and HSTECH indices.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• After a massive recent correction for HK stocks, we are more constructive on the names, and yields there look very attractive.

• On 15 May, it was reported in the local media that Affinity Equity Partners (AEP) is expected to launch a second tender offer for Lock & Lock (115390 KS).
• The tender offer price in this second tender offer is 8,750 won (same as the first tender offer). The second tender offer will last from 16 May to 5 June.
• In the first tender offer, only about half of the target was reached. There was a strong backlash from investors due to low tender offer price.

• Alibaba reported in-line revenue but disappointed adjusted net income for 4QFY24.
• Yet a closer look shows strong core Taobao/Tmall performance was offset by higher-than-expected losses incurred by peripheral businesses.
• We remain convinced BABA is on track to turn around and an earnings upgrade cycle is one or two quarters away. We are buyer at this price.

• The slowdown in Chinese retail sales of apparel seems to have been factored into Vipshop Holdings (VIPS US) 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.
• With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.
• Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.

• Code of Corporate Conduct lacks explanation of the role to be played by a listed company and the background. Consequently, there’re cases where the same companies have repeatedly committed misconduct.
• For companies that are good at pretending that they are trying, without any substance to their corporate governance, making the provisions of Corporate Governance Code mandatory effort won’t be effective.
• TSE’s request seems to be an effort obligation. It is good that the substance of the company’s improvement plan, which only made an effort to improve, will be improved.

• SEBI observed White Organics and Add Shop Retail used circular transaction method to inflate financial performance of respective companies
• Promoter sell their holdings on the back of this inflated financial performance
• The forensic analysis delves into the modus operandi of these frauds

• Booking Holdings has made a robust start to 2024 by posting strong first quarter results.
• The company revealed that travelers booked nearly 300 million room nights across its platforms in Q1, exceeding its expectations and showing growth of 9% YoY. Moreover, revenue for Q1 stood at $4.4 billion, reflecting a growth of 17%, while adjusted EBITDA was approximately $900 million, climbing 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.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Customer management as the largest business began to increase compared to the past two stagnant quarters.
• We believe margin will continue to decline as the company turned its focus to growth.
• We conclude an upside of 41% for March 2025 based on peer companies’ P/S ratios.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• The final results for the June 2024 index rebal event will be confirmed after market close on Friday 17th May 2024.
• In this insight, we take a look at our latest flow expectations.

• Cheerwin is a strong turnaround story with significant earnings growth in 2023 with solid dividend yield. It is the number one player in the inspect repellent sector in China. 
• Cheerwin’s current price is 79% lower than the IPO  price. However, Cheerwin’s shares are up 35% YTD, sharply outperforming Hang Seng index which is up 13.6% YTD.
• We found Cheerwin (6601 HK) using Smartkarma’s Smart Score Screener system. We used the following screening methodology: Market cap – More than $300 million Dividends = 5 only.

• GHCL Textiles (GHCLTEXT IN)  Aiming 25-30% revenue growth along with 15-20% average margins significantly increase the profitability of the company.
• Entering into value-added products like Functional fabrics and setting up their own manufacturing plant for fabric.
• Management Guidance on yarn prices, capex and debt profile of the company.

• While its share price has collapsed, China Tourism Group Duty Free (1880 HK) is still facing many challenges and uncertainties which render it unattractive at current level.
• Average duty free spending per customer in Hainan is 46% lower than the peak and 26% lower YoY in Mar 2024, and the downtrend looks to continue.
• The government’s efforts to strike down purchasing agents in Hainan duty free products and the island’s change to a duty-free zone are also negative developments.

• textLogic Inc. has entered into a definitive agreement to merge with Qoo10, a leading Asian e-commerce platform
• The deal values Wish at less than its estimated book value as of 12/31/23, reflecting the company’s struggles, but presents opportunities for growth and synergies
• The merger will allow ContextLogic to focus on monetizing its valuable NOLs and cash position, potentially unlocking additional value for shareholders and signaling a new chapter for Wish as it moves past its downfall

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, $14 price target, and projections for Lands’ End after reviewing the May catalogs for 2023 and 2024.
• The overwhelming focus for this month is swim, one of the core categories for the company.
• Lands’ End continues to drive deeper levels of newness to capture higher pricing and create a sense of urgency for purchases.

• Cinemark Holdings, Inc. is the 3rd largest movie theater chain in North America with over 500 theaters, making it a compelling risk/reward investment opportunity
• Stock has decreased in value due to concerns about potential impact of Hollywood strikes in 2024, but analysts anticipate a return to box office growth by mid-3Q 2024 and a focus on blockbuster films in 2025
• Analysts project >50% return in equity over next 6 to 12 months, with potential for greater gains in the future, citing Cinemark’s strong position in suburban areas with lower rent costs as an added attraction for investors

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.

• Vail Resorts has underperformed benchmarks in the past but is now poised for a turnaround
• The company has expanded its portfolio to 41 strategically located destinations and increased EBITDA and revenue by over 50% since 2018
• Despite increased leverage from acquisitions, the management team has effectively managed disruptions to the business and presents an attractive investment opportunity with potential for 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.

• Cafe De Coral Holdings (341 HK) share price never really rebounded post COVID despite its operating numbers gradually improving. 
• Haidilao International Holding (6862 HK) share price has rallied along with the Hang Seng Index (HSI INDEX) and Hang Seng China Enterprises Index (HSCEI INDEX) but not Cafe de Coral.
• Recent profit alert that, excluding pandemic subsidies, the group’s net profit will rise 470% YoY. 

• EssilorLuxottica has always played a long game in Japan but since 2018 the eyewear giant has been investing in local production and a growing store network.
• As reported by Mark Chadwick,Travis Lundy and myself, Luxottica has a stake in Paris Miki Holdings (7455 JP) and the Japanese firm is a key strategic interest for EssilorLuxottica.
• That Luxottica is increasing its investments in Japan retail through acquisition is evidenced by its takeover of Washin Optical, a 70-store eyewear chain, last month.

• Shiseido Company (4911 JP) reported 1Q24 results last Friday.  Core operating profit declined less than expected at -10% yoy, and exceeded the management’s target. 
• The beat was driven by robust growth in Japan, Americas, and EMEA, while China steadily recovered.  Overall sales growth was 4% yoy in the quarter. 
• As a reminder, the investment thesis for Shiseido is twofold:  a recovering China mainly due to one-off concerns (nuclear wastewater), and a margin recovery story in Japan. 

• The new energy vehicle producers’ ranks changed a lot in April.
• GAC began to sell batteries to outside new energy vehicle producers.
• Kuaishou’s GMV (Gross Merchandise Value) increased by 420% YoY during the Labor Day.

• Although many institutional investors’ voting criteria apply the rule of “support the proposed appointment of top management director if one female director is nominated,” more in-depth examination should be conducted.
• Agenda based on TSE’s request isn’t easy to understand for all investors, and the current voting guidelines for domestic institutional investors make it unlikely that they will vote for it.
• The ISS ROE criteria will be raised next year, and companies may not raise ROE with bold shareholder returns until the voting guidelines for domestic institutional investors are also raised.

• Takeaways: Biden plans to quadruple US/EU tariffs on Chinese EV imports.
• This will further defend TSLA’s domestic beachhead: 1) 50% EV market share in the USA (No. 2: Ford 7% ) + 2) huge headstart over domestic auto incumbents in assembly line processes (Gigapress) & high manufacturing concentration .
• Together, this should result in superior economies of scale which translates into lower unit costs — increasingly important in a commoditizing US EV sector.

• GoTo Gojek Tokopedia (GOTO IJ) booked an encouraging set of 1Q2024 results which provided a first look at the new structure, whereby suddenly e-commerce became cashflow positive for the company. 
• The company booked strong headline growth with core GMV increasing by +32% YoY, despite incentive & product spending decreasing by -31% YoY, whilst adjusted EBITDA losses fell -89% YoY. 
• GoTo will drive growth less through incentives and more through innovative products, increasing the user base, and focusing on retention through its subscription products, with fintech becoming increasingly important. 

• The second quarter performance for Johnson Controls was strong, with adjusted EPS coming in at the upper limit of company estimations.
• Johnson Controls managed to return to sales growth after experiencing a cybersecurity disturbance at the beginning of the fiscal year.
• Backed by productivity and the conversion of their higher-margin backlog, the company achieved robust margin expansion.

• TBO Tek (0395045D IN) raised around US$186m in its India IPO, after pricing the deal at the top end of the range at INR920/share.
• TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
• We have looked at various aspects of the deal in our previous notes. In this note, we talk about demand and trading dynamics.

• Investors Flock Back Into Commodity Funds Investors are increasingly flocking to commodity funds again.
• A net €353 million flowed into funds from the Morningstar Broad Basket Commodities category in Europe in April.
• This was by far the best month for the category in over two years.

• We do not forecast any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June but there could be capping changes for 7 stocks.
• Capping changes will result in a one-way turnover of 7.6% leading to a round-trip trade of US$2.4bn. 17 stocks will have over 0.5x ADV to trade from passive trackers.
• Li Auto (2015 HK) will have the largest inflow while there will be big outflows from Meituan (3690 HK), Xiaomi Corp (1810 HK), JD.com (9618 HK) and Tencent (700 HK). 

• ZEEKR, a rapidly growing premium EV maker, has successfully completed its IPO and raised ~$441M. The offering was priced at the top of the range at $21 per share.
• The company sold a total of 21M ADSs, up from the initial target of 17.5M shares. ZEEKR’s stock soared more than 30% following its strong debut on NYSE on Friday.
• Geely Auto, Mobileye and CATL have acquired ~14.3M ADSs and overall investor sentiment was positive. I believe ZEEKR may succeed as a high-volume EV maker worldwide.

• We summarize our gleanings from the conference call with Dream International (1126 HK) to better understand growth opportunities and future expansion plans.
• The company is expanding in Indonesia to increase its capacity by 30 million USD ( over 830 million USD). (capacity utilization for FY23:83%).
• Trading at 4x FY24e PE, with an 11.4% dividend yield and a 15-year average ROE of 20%, this is a stock worth exploring. 

• On 10 May, Cosmecca Korea (241710 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI. 
• The company plans to convene an extraordinary general meeting of shareholders on 29 August to finalize on the switching of Cosmecca Korea listing from KOSDAQ to KOSPI. 
• Cosmecca Korea is one of the leading Korean ODM manufacturers of cosmetic products.

• 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 4.8bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought Kweichow Moutai, banks, Haier Smarthome, etc.
• HUGE week in H vs A (since the 30 April close). This may be colouring foreigner activity in As quite a bit. 

• Most large companies initially estimate sales and profits conservatively, and CapEx, which is often planned more than a year in advance, isn’t often above plan.
• Companies have a cautious earnings outlook, but the market consensus still expects profit growth in FY2024. CapEx growth in the BOJ Tankan is expected to be slightly higher than profits.
• Assuming an 8.5% increase in CapEx for large manufacturing companies and a low single-digit growth in the recurring profit outlook, the level of cash on hand is unlikely to decrease.

• Lear Corporation’s record-setting first quarter revenues of $6 billion show an increase of 3%.
• Core operating earnings were up 6% at $280 million, while adjusted earnings per share rose 14% to $3.18.
• Operating cash flow matched that of the same period the previous year.

• SiriusXM Holdings Inc. delivered a strong financial performance for its first quarter of 2024, with an encouraging 7% year-over-year increase in advertising revenue to over $400 million.
• This growth in ad revenue, driven by a growing addressable advertising audience and a strengthening ad market, helped offset a slight 1% drop in subscription revenue.
• The firm’s adjusted EBITDA was up 4% year over-year and delivered a margin of 30%, up 1 percentage point from the previous year.

• The latest earnings from Molson Coors Beverage Company indicates a strong performance in their first quarter, with substantial growth in top and bottom lines and consistent achievement of their acceleration plan.
• The company’s net sales revenue surged by over 10%, while its underlying pretax income increased by nearly 69%, underpinned by significant margin improvement.
• Additionally, the company reaffirmed its guidance for the full year.

• The Clorox Company’s third-quarter financial results suggest a continuing recovery from the August cyberattack that affected its operations.
• Despite lower sales and significant investments in its brands, the company’s adjusted earnings per share exceeded its own expectations in the said quarter.
• Adjusting for the effects of the cyberattack, the company reported that Q3 sales performance was, for the most part, in line with the management’s expectations.

• Sysco Corporation reported a sequential improvement in restaurant foot traffic over Q3 2024, starting with a tough January and improving throughout the quarter.
• The company noted that traffic, not same-store sales, drives distributor case volume shipments, with Sysco’s 2.9% case growth enabling profitable market share increase for the quarter.
• The company delivered strong earnings growth in a challenging volume environment, delivering adjusted operating income growth of 8.4% while anticipating future improvements in local case volume.

• In its first quarter 2024, Archer-Daniels-Midland (ADM) reported adjusted earnings per share of USD1.46, and an adjusted segment operating profit of USD1.3bn, representing an on-year decrease of 24%.
• ADM also achieved a trailing 4-quarter average of 11.2% for its adjusted Return on Invested Capital (ROIC) during the same quarter, while maintaining a strong balance sheet and healthy cash flows.
• Although the global grain and oilseed supply is expected to increase throughout the year amid an anticipated improvement in weather conditions, ADM proactively managed the risk of falling margins by driving the structural earnings, ROIC, and cash flow generation, enabling the company to continue investing in its business and returning cash to its shareholders.

• Mondelez International had robust Q1 2024 with solid top line results, strong earnings, and free cash flow generation.
• The performance was buoyed by momentum in emerging markets where consumer confidence is high and categories are resilient.
• The company faced challenges such as disruption with European clients and boycott of Western products in the Middle East and Southeast Asia.

• Starbucks’ second quarter fiscal year 2024 results reflect the challenges and opportunities the company faces in a changing marketplace.
• While global comparable store sales declined by 4% year-over-year and the company’s total revenue dipped by 1% to $8.6 billion, a decline in foot traffic in North America and a hefty decline of 11% in China being a few of the contributing factors.
• The company was also affected by severe weather conditions, causing a nearly 3% impact on both US and total company comp during the quarter.

• ADM’s stock has dropped by 22% due to an investigation into its Nutrition segment’s accounting practices
• Executives may have had incentives to inflate the segment’s profitability, potentially leading to a scandal
• While the situation presents a buying opportunity, the issue is unlikely to be as pervasive as Enron’s scandal and the underlying business is expected to survive.

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, projections and $0.25 price target for Starco Brands with the company reporting 1Q24 (March) results after the close on Wednesday.
• We believe 1Q saw continued progress on multiple levels, with Whipshots rolling out new flavors and now in almost all 50 states, Soylent expanding their protein offerings, Art of Sport beginning its soft launch on Amazon and Skylar expanding new product categories and fragrances.
• As such, and with management remaining focused on driving cost savings and leveraging their relationship and knowledge of the aerosol-driven manufacturing segment, we remain focused on both top line and margin opportunities at STCB. We reiterate our Buy rating and $0.25 price target.

• 3QFY24 EPS was $0.21 versus a depressed $0.08 in 3QFY23 and above our $0.16 estimate.
• 3QFY24 EBITDA of $5.1 million beat our $4.6 million estimate and was up sharply from $3.3 million a year ago.
• EBITDA margin of 10.5% exceeded our 8.7% estimate, driven primarily by lower commissions and incentives as a percentage of sales than we expected (210 bps), as well as lower SG&A (70 bps).

• Stellantis has reported strong results in its Full Year 2023 Results, demonstrating the company’s high resilience even amid challenges.
• Stellantis’ CEO, Carlos Tavares reflected on the record net revenues, net profit, and free cash flow for the year, showing an increase of 6%, 11%, and 19% respectively.
• The CEO noted that Stellantis’ strategy is all about profitable growth.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight include Melco International Development (200 HK), Sino Land Co (83 HK), and ZJLD Group (6979 HK).

• Hotel rooms in China decreased by 5.4% compared to the previous year
• H World has maintained its position as a leading hotel operator in China with a diverse portfolio of brands
• Founder Qi Ji’s strong track record in the hospitality industry has contributed to H World’s success in navigating challenges and growing its presence in the 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.

• Sido Muncul (SIDO IJ) had a poor Q2-Q3 numbers, and investors sold off. 
• The recent uptick is driven by revenue growth and cost cutting exercises (mainly in wages) that improve margins.  
• Productivity may not stay at the same level thus Q2 24 numbers are key. Take your win first. 

• Cash Converters International (ASX:CCV) is a consumer finance company operating as a service provider, owner and franchisor of second-hand goods and financial services stores in Australia and internationally.
• CCV released a solid Q3 FY24 unaudited trading update with revenue growth of 19% over the previous corresponding period (pcp) to $93.0m.
• The gross loan book has grown 9% to $292m, which is all the more impressive as the business transitions away from Small Amount Credit Contract (SACC) products due to regulatory change, more than offset by growth in other products, domestically and internationally.

• We are reiterating our Buy rating, raising our pice target to $25 (from $14), and upping our projections for a.k.a. Brands after the company registered better-than-expected revenue and Adjusted EBITDA for 1Q24 and raised 2024 guidance, driven by strong domestic results, as all the company’s concepts continue to gain market share in the United States via new stores, expanding digital marketplace relationships and the “test and repeat” method driving newness and fashion excitement.
• Further, we believe the Australian operations, especially Culture Kings, are setting up for a 2H24 turn, with leaner inventories and better product mix.
• As such, even after raising our projections, we believe upside remains in 2H24 and 2025 and are confident raising our price target to $25 and reiterating our Buy rating on AKA.

• Profit margins boosted by cuts in personnel, R&D, CapEx, and corporate tax rates. Much of the improved free cash flow went onto the balance sheet instead of being invested.
• OP Margin’s sluggish growth indicates that the cost-cutting model is no longer working. Investments are needed to create products with higher gross margins.
• While the limitations of the cost-cutting model can be seen, ROE, which indicates the achievement of the management goal of increasing medium-to-long-term shareholder returns, is sluggish in many companies.

• Business Breakdowns podcast covers British American Tobacco with guest Evan Tindall
• British American Tobacco primarily sells tobacco, with significant presence in the US, Europe, and Asia
• Company’s profits are more weighted towards the US market

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

• IPAR reported first quarter results detailing how consumer demand for fragrances has yet to wane even in a difficult to compare period
• In a change of strategy than prior years, IPAR is spending more in the early parts of the year to build awareness for its lineup of products 
• With one quarter past, we believe Lacoste and Roberto Cavalli are additive to the investment story and not the year’s only topic

• I am long shares of Kambi (“Kambi” or the “Company”) because I believe the Company is worth over 170 – 200 SEK / share today – This represents a 20% – 32% margin of safety to the current share price of ~136 SEK
• If I am wrong about this, I think Kambi is its growing intrinsic value and will still be worth at least 200 SEK / share (likely closer to 250 SEK / share) over the next 2 – 4 years, which would generate a mid-teens IRR or higher from the current share price
• Several free options / catalysts (some of which I believe are inevitable) are not priced into the stock and could drive returns substantially higher (20%+ IRR). Multiple expansion is also a lever that could drive further returns.

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 feel consensus overstates margin pressure for Alibaba’s March quarter results. We expect its group adjusted EBITA to deliver single-digit growth vs. investors’ concern about earnings retreat.
• March quarter should mark start of an earnings recovery cycle in our view, as improving China macro and well-executed business revamp plan put Alibaba back on growth track.
• This also means an end to its multiple contraction which lasted for five quarters. We see 50% upside on double-digit earnings growth and multiple expansion over next 12 months.

• Swiggy aims to raise US$1.25bn in its upcoming India IPO. The company has filed confidentially for its IPO, which is likely to be launched towards the end of the year.
• Swiggy, along with Zomato, operates a duopoly that has come to dominate the food delivery market in India. In 1H24, Swiggy serviced over 274,000 restaurants via its 370,000 delivery partners.
• In this note, we will take an early look at the company based on the publicly available financials. 

• IMAX Corp, listed on the NYSE, is a 71% shareholder of IMAX China, a HKEX listed subsidiary – in charge of the release of IMAX films in Greater China.

• IMAX HK is rather illiquid – 7.15 HK is a mere $0.93 USD – with no investor presentations, no earnings calls – again, as is common with ideas in this blog, we are dealing with a company that is more or less “unownable” for most, flies under the radar, and therefore sports a, for a lack of a better word, shite valuation.

• Whilst IMAX Corp, the parent company, trades at ~8x EBITDA, the “backwater” subsidiary IMAX HK, trades at a mere ~5x EBITDA, despite margins being more than 10 pts higher.

• Ferrari N.V. (RACE US) reported yet another high-quality quarter with 11%/18% YoY revenue/net profit growth on a flat YoY(%) volume quarter driven by mix improvement.
• Although there seems to be earnings upside, and the street was literally searching for it in the concall, management stuck to their 6.5%/9% revenue/net profit growth guidance for FY24.
• Trading at 50x FY24, the stock seems expensive, but the strong branding and order book implies very visible earnings growth into the future.  

• As we progress in earnings season in line with our previous Playbook, this one focuses on select consumer names. 
• Names discussed include Titan Co Ltd (TTAN IN), Vedant Fashions (MANYAVAR IN) , Go Fashion India (GOCOLORS IN) & Shoppers Stop (SHOP IN).  
• Most names expect a soft Q1, and SHOP is targeting the most aggressive expansion.

• The first quarter 2024 results of ADT Inc. highlight the company’s positive growth and future investment opportunities.
• The company continues to focus on its consumer-oriented core security and smart home business, serving a vast market.
• Being an industry leader, ADT benefits from its trusted brand, national footprints, and the ability to tap stable and predictable cash flows to service and reduce its debt obligations.

• Columbia Sportswear demonstrated solid management of its inventory and its operational costs.
• The company reported a 37% year-over-year reduction in inventory and the implementation of an inventory reduction plan that has reaped substantial benefits.
• Columbia Sportswear’s strong balance sheet supports its maneuvers to tackle the impact of coronavirus-induced disruptions and realign inventory.

• Harley-Davidson had a mixed performance in the recent result.
• The company delivered in line with expectations, reporting a 6% growth in North America, the most important region.
• However, this growth was offset by soft performances in Europe and the Asia Pacific primarily due to regional macroeconomic conditions.

• Colgate-Palmolive’s Q1 2024 earnings reveal a positive start to the year, with balanced top-line growth and consistent earnings per share growth.
• The company recorded organic sales growth across all four of its categories and all six of its divisions, as well as volume and pricing growth on a total company basis.
• This balanced growth enabled a 6% net sales growth, despite a nearly 4% headwind from foreign exchange.

• Mohawk Industries’ Q1 2024 earnings call detailed a challenging period marked by economic headwinds and mixed performance.
• The company’s net sales for the first quarter were $2.7 billion, a drop of 4.5% compared to the previous year.
• However, the adjusted earnings per share increased by 6% year-over-year to $1.86.

• The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
• Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.
• Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.

• We upgrade Meituan because we believe its success in Hong Kong might be replicable on a global scale. 
• The upcoming autonomous driving (ADS) revolution has deep and fundamental implications in permanently cutting Meituan’s logistic cost;
• We upgrade the stock from SELL to BUY and raise TP to HK$150/share

• Delta Corp Ltd (DELTA IN) sells its Nepal casino business to Ability Games amidst allegations of connections to illegal betting and money laundering.
• The ED’s investigations into Mahadev Online Book reveal a Rs 3,916 crore scam, freezing of Rs 580.78 crore assets, and involvement of companies like Ability Games.
• CEO of Delta Corp Ltd (DELTA IN)mentioned in ED statement that they have agreed for 10Crs over and above the transaction value.

• Despite a slightly flatter revenue/margin trajectory outlook, we remain optimistic that ATRenew’s differentiated pre-owned consumer electronics transactions and services platform in China will continue to drive outsized growth in transaction volumes, sales, fees, and profits over the long run.
• While RERE has meaningfully outperformed recently, we believe current levels for the stock still provide investors with an attractive entry point, as awareness and appreciation of the company’s business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold.
• Despite what we believe to be conservative inputs/assumptions, our DCF model suggests a wide disconnect between ATRenew’s fundamentals and the stock’s current price.

• The reason why the approval for the shareholder proposal on profit appropriation exceeded 40% is that the proposal was easy to understand and easy to get approval from other shareholders.
• Although domestic institutional investors don’t currently vote against a low ROE when it comes to improvement measures, they may take a more aggressive stance if ISS raises its ROE criteria.
• The trend of top management being reappointed even with continued low ROE is likely to continue for a while longer, but the time frame is definitely getting smaller.

• Cake Box PLC is a UK-based franchisor of specialist cake shops with over 200 franchise stores
• Strong financial foundation with high return on equity and owner-led management team
• Focus on egg-free cakes in off-high street locations has led to successful growth and plans for further expansion.

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.

• Café de Coral faced challenges during COVID-19 but is now showing signs of recovery with the removal of restrictions and return of tourists
• If revenues and operating margin return to pre-pandemic levels, the stock could trade at a favorable P/E ratio and dividend yield
• Strong shareholder confidence through additional share purchases indicates Café de Coral is poised for success in the post-pandemic market

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.

• LEEF Brands (CSE: LEEF, OTCQX: LEEEF) is a scaled, vertically integrated operator in California.
• It holds the largest cultivation permit in Santa Barbara County, owns LEEF Labs, one of the state’s largest manufacturing companies, and has The Leaf dispensary in Palm Springs.
• The company recently successfully restructured its debt. 

• CaoCao Inc (1646553D CH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are Huatai, ABC International, and GF Securities.
• CaoCao Inc (CaoCao) is a ride-hailing firm incubated by the Zhejiang Geely Holding Group (Geely).
• According to Frost & Sullivan (F&S), the firm has consistently ranked as the top three ride hailing platforms in China based on gross transaction value (GTV) between 2021-2023.

• Manufacturers utilize NXQ’s graphical interfaces and touchscreens to enhance user experience and operational efficiency in machinery.
• Nexteq PLC has introduced a new range of gaming cabinets with advanced features and enhanced performance.
• The company remains committed to delivering innovative solutions in multiple industries, prioritizing improved user experiences and operational efficiency through their technology.

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.

• Concurrent with its HK$34/share VGO, L’Occitane (973 HK)‘s disinterested shareholders may be entitled to a share scrip alternative. IF afforded, up to 5% of shares out can participate.
• The big unknown is whether you receive shares of the levered-up Bidco, at some as yet undetermined scrip ratio; or keep shares of L’Occitane as-is.
• To trigger the rollover option, 10% of disinterested shareholders need to express interest by the 15th May (a Hong Kong holiday btw). A deadline without details. 

• We believe revenue will grow by 6% YoY in 4Q24, but by 11% for FY2026 (roughly 2025 calendar year).
• We believe Alibaba has been actively raising its revenue growth, but this the effect cannot be seen in the short run.
• We conclude the stock has an upside of 46% and a price target of US$120.

• The HK$34/share offer price is final, which exceeds all-time high closing price of HK$33.60/share since IPO in 2010. EUR6 billion is equivalent to a PE of 52.17x, higher than peers.
• Deploying China’s sinking market is “a good story full of imagination”. However, it may fail to bring expected profits considering increasing competition/potential price war, leading to uncertain future performance growth.
• For minority shareholders, this privatization provides an attractive opportunity to monetise their investments at a premium over market price. We don’t think the current “technical bull market” to be lasting. 

• China after-school tutoring remains one of the most attractive and visible sectors in the next 2-3 years time frame. 
• Even though New Oriental Education & Techn (EDU US) had some hiccups in FY3Q24 results, they were mainly due to factors not related to the core after-school tutoring business.
• My sector top pick is China Beststudy Education Group (3978 HK), as valuation is lower and growth is higher, though it has a much smaller market cap..

• Royal Caribbean Group has made impressive strides in reshaping the business in the first quarter of 2024.
• The company described its Q1 2024 as robust and experiencing an upward trajectory in business operations, bolstered by the consumers’ demand for vacation experiences.
• The results of Q1 2024 were significantly better than anticipated, with the company’s brands being stronger than ever and demand for vacation experiences showing consistent acceleration.

• -30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the fallout of severe supply shortages.
• “It’s important to underscore that the recent downturn in cocoa prices is primarily a result of trading maneuvers, not a realignment of market fundamentals,” analysts at Fitch Solutions’ BMI unit said in a note, adding they expect volatility to persist.
• Volatility spiked as bigger margin requirements spurred traders to close out positions, helping to drive aggregate open interest in cocoa futures to the lowest in more than a decade.

• Investment thesis for going long on Porch Group Senior Secured Convert in the mid 50s, with a 22.5% Yield to Maturity and potential for a 75% one-year return
• Option for higher risk tolerance investors to target the 2026 Notes in the 30s for more upside
• Capital structure and background information on Porch Group’s decline in the macro environment for housing, extreme weather-related losses, and involvement in a reinsurance fraud scandal with Vesttoo highlighted

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.

• Pureprofile Ltd (ASX:PPL) is a data analytics and consumer insights company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
• Pureprofile has reported a 6% increase in Q3 FY24 revenue to $10.9m and 49% decline in Q3 EBITDA to $0.5m.
• Q3 is seasonally the weakest quarter for PPL and EBITDA was affected, in part, by the change in executive remuneration policy to cash-based payments.

• Pool Corporation reported its latest Q1 earnings, posting $1.1 billion in net sales.
• Though a dip of 7% from the previous year, the figure is up 6% from the same period in 2021.
• The quarter’s performance marks the company’s fourth successive year of meeting or exceeding the $1 billion threshold in a comparatively slow seasonal quarter.

• Primo Water Corporation specializes in consumer drinking water products and services, focusing on the North American market
• Market leader in the water industry with strong growth potential and resilience in economic downturns
• Company undergoing operational improvements, attractive valuation, and compelling ESG story following the sale of its European business

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.