In today’s briefing:
- Williams-Sonoma Inc.: 4 Surprising Takeaways From Their Recent Financial Performance – Financial Forecasts
- Advance Auto Parts: Does It Have A Sustainable Competitive Advantage? – Major Drivers
- Last Week in Event SPACE: Nikkei 225 Flow, Aquila Acquisition, Axiata, Intage, Liontown/Albemarle
- Nongfu Spring (9633 HK): Within Striking Distance
- After Selling the Property, There Appears to Be No Set Plan for How the Cash Will Be Used
Williams-Sonoma Inc.: 4 Surprising Takeaways From Their Recent Financial Performance – Financial Forecasts
- Williams-Sonoma delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
- Williams-Sonoma achieved these outcomes despite a more promotional environment and softer industry metrics by focusing on regular price selling, leveraging the company’s market advantages, enhancing customer service, and managing costs.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Advance Auto Parts: Does It Have A Sustainable Competitive Advantage? – Major Drivers
- Advance Auto Parts delivered a mixed set of results for the previous quarter with revenues above the analyst consensus.
- Their net sales increased during the quarter.
- During Q2, Advance Auto Parts observed increase in DIY omnichannel and DIFM.
Last Week in Event SPACE: Nikkei 225 Flow, Aquila Acquisition, Axiata, Intage, Liontown/Albemarle
- The Nikkei Index Team announced the changes to the Nikkei 225. That triggers flows of about ¥480bn a side, and some big, big changes.
- As interest rates and inflation remain high, investors will (should) continue to prefer lower-risk investments over higher-risk growth companies such as de-SPACed Aquila Acquisition Corporation (7836 HK).
- The Liontown Resources (LTR AU) / Albemarle Corp (ALB US) transaction looks done. However, Gina Rinehart may have other ideas.
Nongfu Spring (9633 HK): Within Striking Distance
- Nongfu Spring (9633 HK) has been trading flat since April 2021, even though earnings have grown 36% yoy in 2021, 19% yoy in 2022, and 25% yoy in 1H23.
- We believe a forward PE lower than 35x would be a great entry price for Nongfu (37x currently), with upside potential in earnings from explosive growth in unsweetened tea.
- A business that has a long run-way for growth, strong management, strengthening moat, great cash flow, and on top of that counter-cyclical, deserves a premium valuation anywhere in the world.
After Selling the Property, There Appears to Be No Set Plan for How the Cash Will Be Used
- The need to obtain investment capital for future business development or the presence of stakeholders with a strong desire to improve asset efficiency may be the catalyst for selling property.
- Of course, cash should be used to return to shareholders, but the stock market expects more profit growth, so higher profit margins and ROE are required.
- The data from Ministry of Finance indicates that cash still hasn’t been spent on investments. Cash appears to be currently being used reluctantly for investments that will generate future profits.
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