Daily BriefsThematic (Sector/Industry)

Daily Brief Thematic (Sector/Industry): Ohayo Japan | New Records and more

In today’s briefing:

  • Ohayo Japan | New Records
  • How to Stimulate China’s Consumption, Part III
  • Online Game Monitor: June 2-16, 2024
  • INDUSTRY REPORT – Furniture/Furnishings Weekly
  • The Highlights – Cannabis News for the Week Ending June 14, 2024

Ohayo Japan | New Records

By Mark Chadwick

  • Record Highs: The S&P 500 hit a new record, rising 0.77% to 5,473.23, driven by optimism in economic data and potential rate cuts.  
  • Tech Surge: Major tech stocks, including Apple (+2%) and Microsoft (+1%), led gains. Broadcom surged 5.4%, while Nvidia edged slightly lower despite a record high.  
  • Investment Optimism: Citigroup raised its S&P 500 year-end forecast to 5,600, anticipating continued tech strength and earnings growth, amid cautious hedge fund positioning and potential volatility ahead.

How to Stimulate China’s Consumption, Part III

By Andy Fu

  • As Chinese population ages, healthcare is a major source of consumption. Yet we are the most pessimistic for it to become a pillar of consumption;
  • Low healthcare spending in China is achieved by underpaying doctors and nurses. Enhancing life quality, instead of only curing disease, can meaningfully improve consumption; 
  • However, consumer healthcare begets a larger and more common economic phenomenon, which is underpricing. The issue of underpricing stems from low compliance cost, in our opinion.

Online Game Monitor: June 2-16, 2024

By Stan Zhao

  • Bilibili’s <Three Kingdom: MDTX> achieved excellent results on its release day, leading us to raise our AGB estimation by ~20%.
  • Tencent’s <Naruto> and <Fight of Golden Spatula> have seen a rapid rise in player reputation due to the success of recent events and operations, leading us to raise their estimates;
  • NetEase’s <Justice Mobile> has experienced a decline in gross billings due to the game’s lifespan, while pre-registrations for <Where Winds Meet> have reached a new high. We adjusted accordingly.

INDUSTRY REPORT – Furniture/Furnishings Weekly

By Water Tower Research

  • Furniture/furnishings stocks trailed the broader market.
  • The Water Tower Research Commercial/Contract Index (-1.7%), Residential Manufacturers & Suppliers Index (-2.0%), and Home Goods Retailers Index (-2.0%) trailed the broader market indexes and the Mass Retailers Index (-1.3% to +1.3%) last week.
  • LOVE 1Q25 paints a picture of continued weakness in residential furniture even as the company appears to be continuing to gain share. 

The Highlights – Cannabis News for the Week Ending June 14, 2024

By Water Tower Research

  • This week, MSOS dropped 9.34%, while YOLO fell 4.46%. All the top 10 (by enterprise value) MSOs finished down.
  • Verano (NEO: VRNO, OTCQX: VRNOF) -17.11% and Cannabist (NEO: CBST, OTCQX: CBSTF) -14.17% felt the most pain. Jushi (CSE: JUSH, OTCQX: JUSHF) held up best, losing 5.17% over the past five sessions.
  • MSOS peaked 1,223 days ago on February 10, 2021, and is in a -87.31% drawdown. .

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