Emerging Market Links + The Week Ahead (May 27, 2024)
The Chinese, Hong Kong and South African stock markets are probably the world’s three most hated stock markets right now with South Africa having a potential doomsday election later this week (May 29th). As covered in yesterday’s post, the probabilities for a doomsday result might not be as great as foreign and even South African investors have priced into the market (see our South African stocks tagged posts) while Chinese domestic investors are buying up shares in the hates Chinese market that foreigners are still too afraid to touch.
Mexico is another country about to have elections (June 2nd) and the Financial Times has noted the country’s budget problems has politicians looking for money from various sectors of the economy (which is benefiting from nearshoring trends). As notorious bank robber Willy Sutton once answered to a question about why he robs banks (“because that’s where the money is…”), it looks like Mexican politicians are looking for ways to rob the country’s banking sector (which is also dominated by foreign banks…)
Finally, Brazil’s supreme court (which effectively runs the country…) has overturned two more ‘Car Wash’ corruption convictions – those of Lula political ally and those against industrialist Marcelo Odebrecht who’s companies were among those at the center of siphoning money from Petrobras. While that may be minor news, its another sign of more backsliding in Brazil for investors.
$ = behind a paywall
🇨🇳 CMBI Research China & Hong Kong Stock Picks (April 2024) Partially $
Weichai Power, BYD Company, Guangzhou Automobile Group, SANY International, Hangzhou Tigermed Consulting, Yonyou Network Technology, GoerTek, Vesync, Luxshare Precision Industry, Ping An, Zhejiang Dingli Machinery, Great Wall Motor, New Oriental Education, Xiaomi Corp, Li Ning, Jiangsu Hengli Hydraulic, Zhongji Innolight, Bosideng International Holdings, Xtep, ANTA Sports Products, Tongda Group Holdings, Shenzhen Mindray Bio-Medical Electronics, Tencent, FIT Hon Teng, Q Technology, Alibaba, GigaCloud Technology, Baidu, NetEase, Tongcheng Travel Holdings, TK Group Holdings, Akeso, Yunkang Group, Haidilao International Holding, China Life Insurance, Haier Smart Home, Nayuki Holdings, Atour Lifestyle Holdings, RemeGen, PICC Property and Casualty Co Ltd, Joinn Laboratories China, Jinxin Fertility Group, CMGE Technology, Zoomlion Heavy Industry, Huitongda Network & China MeiDong Auto Holdings
20+ high conviction stock ideas: Li Auto, Geely Automobile, Weichai Power, Zhejiang Dingli, Bosideng International Holdings, Haier Smart Home, Vesync, Kweichow Moutai, BeiGene, PICC P&C, Tencent, Alibaba, Pinduoduo, Amazon.com, Netflix, Kuaishou, GigaCloud, CR Land, FIT Hon Teng, Xiaomi, BYDE, Innolight & Kingdee
🌐 EM Fund Stock Picks & Country Commentaries (May 26, 2024) Partially $
Frontier market investing tips, South Africa’s doomsday election (May 29) + SA is a value investor’s dream, fund warning signs (when to re-evaluate owning one), “five Ds” driving global inflation, etc
$ = behind a paywall / 🗃️ = Archived article
🇨🇳 Alibaba Group: A Story Of Cross-Border E-commerce Scale-up! – Major Drivers (SmartKarma) $
Alibaba Group (NYSE: BABA)’s March Quarter and Full Fiscal Year 2024 results show that major segments such as the Taobao and Tmall Group, Alibaba International Digital Commerce, and core public cloud offerings are experiencing growth.
The Taobao and Tmall Group achieved double-digit year-over year growth, while Alibaba International Digital Commerce revenue increased by 45%.
Moreover, AI related revenue increased triple digit year-over-year, demonstrating the potential of AI technology in fueling the company’s growth.
🇨🇳 Alibaba Earnings Review: 20% Undervalued! (Capitalist Letters)
Alibaba Group (NYSE: BABA) posted satisfactory earnings, though, it got sold off. This is indeed unsurprising given that the new trend in the market is selling off stocks upon actually satisfactory performances.
In my previous post, I had described the problem: The market is way ahead of itself.
When expectations are off the roof, it’s actually impossible to satisfy them. Though this looks really unpleasant, it actually creates opportunities for the intelligent investor.
🇨🇳 My notes on Alibaba’s Q1 2024 (Investing in China)
The dumpster fire is still burning but things look better
I found Alibaba Group (NYSE: BABA)‘s Q1 2024 earnings unspectacular, but a few things piqued my interest or at least differed from common perception. Previously, under Daniel Zhang’s leadership, the company was an absolute dumpster fire – see my last article on that.
Even after the new management took over, they seemed to struggle with that mess. Distributing the cloud business – yes, then no. IPO of Cainiao and Freshippo – yes, then no. However, this is not a complaint about the current management, led by Joseph Tsai. Joseph Tsai is great; I just want to highlight the issues during Daniel Zhang’s tenure.
🇨🇳 Alibaba raises $5bn for share buybacks as it warns of AI challenges (FT) $ 🗃️
🇨🇳 Sun Art (6808 HK): FY24 Unimpressive, But All Eyes On Potential Alibaba Sale (SmartKarma) $
Sun Art Retail (HKG: 6808 / FRA: SRI / OTCMKTS: SURRY / SURRF)‘s FY24 (fiscal year ending March) numbers were overall unimpressive, with sales down 13% yoy and net loss increasing to RMB1.6bn.
The new CEO’s strategy is to refocus on SSSG of offline traffic and restore price competitiveness. April and May SSSG improved.
The stock is up 20% since my initial insight on the name in March, and I believe more upside remains.
🇨🇳 (PDD Holdings (PDD US,BUY,TP US$172) TP Change): Squeezing Supplier Base for Its Own Benefit, Globally (SmartKarma) $
PDD Holdings (NASDAQ: PDD) reported C1Q24 top-line, non-GAAP EBIT, and non-GAAP net income 1.3%, 67.0%, and 80.0% vs. our estimate, and 13.9%, 82.0%, and 94.7% vs. consensus, respectively;
Temu unit economics improvement drove the 1Q beat. Per order outlay on marketing and fulfilment declined 20-25% qoq, we estimate;
PDD continues to effectively squeeze merchants for its benefit, while also benefiting from weak consumer sentiment in China and overseas. We maintain BUY, and raise TP to US$172, implying 12.3x CY24 PE.
🇨🇳 PDD (PDD US): 1Q24, Rev Up by 131% and Margin Reaching Historical High (SmartKarma) $
Total revenue rose by 131% in 1Q24 with advertising up by 56% YoY and commission up by 327% YoY.
In 1Q24, both the operating profit and the operating margin reached record highs.
The historical price / sales ratios suggests a significant upside. Buy.
🇨🇳 Is Temu already close to breakeven? (Momentum Works)
Wednesday night (22 May) Asian time, PDD Holdings (NASDAQ: PDD), the parent of Temu, released its 2024 Q1 results. The results are again defying the most optimistic expectations: revenue was up 131% YoY, operating profit up 275%; whilst net profit up 246%.
The stock market again responded ambivalently to the results. The prices moved up and down during the first trading after the results, eventually settling at a mild 1.13% above previous day closing. The second day though, it went up a further 4.45%.
Some facts and thoughts:
🇨🇳 Lenovo: Revisiting AI Growth Potential And Valuations (Rating Upgrade) (Seeking Alpha) $
The outlook for Lenovo Group (HKG: 0992 / FRA: LHL / LHL1 / OTCMKTS: LNVGY / LNVGF)‘s key businesses is favorable, considering the positive read-throughs from the company’s above-expectations Q4 results and relevant third-party industry research.
Lenovo’s stock is trading below fair valuation based on a comparison of its P/E metric with peers and its bottom line growth forecasts.
I have assessed LNVGY to be an undervalued AI play, which has prompted me to raise my rating for the name to a Buy.
🇨🇳 White House’s squeeze on Nvidia chip exports is turning into a win for Huawei (Caixin) $
The lower-end artificial intelligence (AI) chips that Nvidia Corp (NASDAQ: NVDA) is exporting to China in order to skirt U.S. export controls are so underwhelming that local tech firms are turning to Huawei Technologies Co. Ltd.
It comes as the Chinese national champion begins to benefit from desperation among domestic tech firms to source the AI chips they need to train large language models (LLMs) for ChatGPT-like tools.
🇨🇳 XM / Xiaomi (1810 HK): 1Q24, Revenue Up by 27%, Smartphone Shipments Ranked Global No. 3 (Caixin) $
Xiaomi (HKG: 1810 / FRA: 3CP / OTCMKTS: XIACF)
Total revenue growth rate climbed up 27% YoY in 1Q24 with all businesses growing strongly.
Smartphone shipments grew by 34% YoY and achieved global No. 3.
In 1Q24, the gross margins of all major businesses obviously improved.
🇨🇳 KS / Kuaishou (1024 HK): 1Q24, Strong GMV and Historical High Op Margin Again (SmartKarma) $
Kuaishou Technology (HKG: 1024 / LON: 0A74 / OTCMKTS: KUASF / KSHTY)
In 1Q24, revenue grew by 17% YoY and e-commerce GMV grew by 28% YoY.
Both the operating margin and the operating profit reached historical highs in 1Q24.
We set an upside of 47% and the price target at HK$86.00. Buy.
🇨🇳 GigaCloud Technology Inc – Another China Hustle Inflating Key Metrics Using Undisclosed Related Party Shell Companies (Grizzly Reports)
GigaCloud Technology (NASDAQ: GCT) is a Chinese e-commerce company whose stock has tripled in recent months on excitement of the B2B marketplace, GigaB2B, which we believe is misunderstood.
According to GCT, GigaB2B has thousands of buyers and sellers, and its gross merchandise value (GMV) has climbed to $907m up >300% from 2020. Meanwhile GCT’s revenue has grown >150% during the same period.
GigaB2B’s web traffic does not square with its growth story. Data shows that GigaB2B only has approximately 50 visits per month currently. Even at its peak in June 2022 (around GCT’s IPO), the platform only saw 1,000 visits per month.
How does a platform generate so much revenue growth amid negligible web traffic? We believe GCT operates a complex web of undisclosed related party shell companies it uses to transact with itself and exaggerate marketplace growth. Consequently, we believe investors have been misled by reported key metrics including 1P revenue, 3P revenue, GigaB2B GMV, and Off-Platform revenues. (see introduction for definitions)
🇨🇳 Trip.com (9961 HK): 1Q24, Quite Good Quarter, But Stock Up by 37% in Three Months (SmartKarma) $
In 1Q24, Trip.com (NASDAQ: TCOM)’s revenue grew strongly by 29% YoY with all business booming.
China and Trip achieved a lot overseas travelers in March and the Labor Day Holidays.
However, the stock price has risen 37% in the past three months.
🇨🇳 Executive’s loose lips on ‘wolf culture’ cost Baidu billions (Bamboo Works)
The search engine operator’s market value shrank by more than HK$6 billion after its head of communications drew public outrage over comments on China’s ‘996’ work culture
Baidu (NASDAQ: BIDU)’s shares fell in both Hong Kong and New York, wiping out about HK$6 billion yuan in market value, after a senior executive’s remarks on her tough work philosophy
The case underscores the importance of public opinion for Chinese companies, and how online criticism can lead to big headaches
🇨🇳 Li Auto (LI US): 1Q24, A List of Bad News (SmartKarma) $
Li Auto (NASDAQ: LI)
Operating profit turned negative in 1Q24 compared to 1Q23 due to the price war and the failure of new model.
The company disappeared from the industry top-10 list of sales volume and revenue growth slowed down to zero in April.
All cross-sectional comparisons suggest a Sell rating for the stock.
🇨🇳 ATRenew feeds on national recycling campaign, strong JD.com ties (Bamboo Works)
The company’s revenue rose 27% in the first quarter and it forecast similar growth ahead, as it benefits from a stepped-up Beijing campaign to promote more recycling
ATRenew (NYSE: RERE) posted strong first-quarter revenue growth and predicted similar gains in the second quarter as China steps up a recent recycling campaign
The company’s stock has more than doubled from an early February low, part of a broader recent rally for U.S.-listed Chinese companies
🇨🇳 Canaan gets left behind in latest crypto bull run (Bamboo Works)
The maker of crypto currency mining machines reported its revenue dropped in the first quarter despite a big bitcoin rally
Canaan (NASDAQ: CAN)’s revenue fell 36% year-on-year in the first quarter even as the prices of bitcoin and other cryptocurrencies skyrocketed
Demand for the company’s mining machines waned as a sharp drop in the amount of new bitcoin being created substantially curtailed the profitability of crypto mining
🇨🇳 Amer Sports first-quarter revenue beats expectations on strong China sales (Caixin) $
Chinese-owned Finnish sports-equipment maker Amer Sports (NYSE: AS) posted first-quarter revenue that beat market expectations, driven by strong demand in China.
The maker of Wilson tennis rackets, Salomon ski boots and Arc’teryx outdoor gear reported revenue of $1.18 billion in the first quarter of this year, up 13% from a year earlier, according to earnings results released Tuesday. That beat the average estimate of $1.13 billion by Yahoo Finance analysts.
🇨🇳 Nissin Foods serves up profit gains even as revenue declines (Bamboo Works)
The instant noodle maker was hit by slowing consumption in Hong Kong and Mainland China, with downside factors likely to dampen its performance for the rest of the year
Nissin Foods (TYO: 2897 / HKG: 1475 / FRA: NF2 / OTCMKTS: NFPDF) reported its revenue fell 7.1% in the first quarter, even as its profit rose by a similar 7.31% due to falling raw material costs
The company acquired sister firm Nissin Vietnam last year, hoping to boost its slow growth by expanding from its home China base to Vietnam
🇨🇳 Chinese bottled water giant Nongfu Spring takes legal action against its haters (Caixin) $
Nongfu Spring (HKG: 9633 / OTCMKTS: NNFSF) said Monday it has taken legal action against people that it accused of spreading false rumors about its founder and products, following a widespread boycott of the Chinese beverage giant in late February.
The Hangzhou-based drinks-maker, known for its eponymous bottled water, was thrust into a firestorm of online anger on Feb. 25, after its billionaire founder Zhong Shanshan attended a memorial service for Zong Qinghou, founder of rival Hangzhou Wahaha Group Co. Ltd., who died that month.
🇨🇳 Offshore China ETFs Rebalance Preview: Three Changes in June; Cutoff Today (SmartKarma) $
🇨🇳 Inaugural operating profit fails to lift 111 Inc. (Bamboo Works)
The drug distributor expects to benefit from an ongoing crackdown on corruption in its industry due to the company’s focus on distribution to pharmacies rather than hospitals
111 Inc. (NASDAQ: YI)’s revenue fell in the first quarter from an unusually high base in the year-ago period when drug demand spiked after China ended its pandemic restrictions
The company’s stock remains depressed, trading at a P/S ratio of just 0.05, despite reporting its first-ever operating profit in its latest quarterly report
🇨🇳 BeiGene’s aggressive expansion brings revenue jolt (Bamboo Works)
The innovative drug maker’s product revenue rose 82% to $747 million in the first quarter, with its star drug on pace to possibly net $2 billion for the year
BeiGene (NASDAQ: BGNE) made progress in taking its key monoclonal antibody drug Tislelizumab overseas in the first quarter, with a U.S. debut expected in the second half of the year
At a time when its peers are cutting staff, the company added 1,400 employees over the last year, bringing its total to 10,600
🇨🇳 Forget the pricey collectibles. Bloks Group targets investors with cheap licensed toys (Bamboo Works)
One of China’s top toymakers has filed for a Hong Kong IPO, posting explosive growth as it pivots from educational products for toddlers to collectibles for kids and teens
Shanghai-based Bloks Group hopes to attract investors to its Hong Kong IPO with soaring revenue following its recent pivot to cheap assembly character toys
With GMV up 170% in 2023 and revenue more than tripling in this year’s first quarter, Bloks calls itself “the fastest-growing toy company of scale in the world”
🇭🇰 Swire Pacific: Why Class B Shares Are The Better Investment (Seeking Alpha) $
Swire Pacific (HKG: 0019 / 0087 / OTCMKTS: SWRAY) has made several changes to its portfolio over the last few years, most notably divesting Swire Pacific Offshore and the US bottling business.
The most important asset remains the 82 percent stake in Swire Properties (HKG: 1972 / OTCMKTS: SWPFF), which focuses on the Hong Kong commercial property market.
The company is valued at a sizeable discount to the sum of its parts.
Class B shares offer a significantly cheaper way to gain exposure to the same underlying business.
🇲🇴 Macau satellite biz Emperor Ent in US$84mln HK apt deal (GGRAsia)
An offshore unit of Macau satellite casino promoter Emperor Entertainment Hotel Ltd (HKG: 0296 / FRA: EM7A) is to acquire a 25-storey building in the Central district of Hong Kong from a connected company, for a total consideration of HKD655.2 million (US$83.9 million).
Emperor Entertainment Hotel, which promotes the Grand Emperor Hotel and casino in downtown Macau, said in a Friday filing to the Hong Kong Stock Exchange that the deal with a unit of Emperor International Holdings Ltd was to “expand its assets portfolio within the scope of its principal business”.
It added: “Emperor Entertainment Hotel has been engaging in the provision of hospitality services in the past two decades, and currently operates a number of hotels and serviced apartments in Hong Kong and Macau.”
🇲🇴 SJM maybe ‘slight positive’ cash flow in 2024: Lucror (GGRAsia)
Credit analyst Leonard Law stated: “Our fundamental credit bias on SJM Holdings (HKG: 0880 / FRA: 3MG1 / KRX: 025530 / OTCMKTS: SJMHF / SJMHY) is ‘stable’. We expect the company to generate slight positive free cash flow in 2024, which would facilitate gradual net debt reduction.”
Lucror said factors supporting SJM Holdings’ move toward positive cash flow included that a recently-announced strategic acquisition of a number of assets from its parent company, the privately-held Sociedade de Turismo e Diversões de Macau SA (STDM), involved minimal outlay relative to SJM’s HKD4.95 billion cash balance as of March-end.
🇲🇴 SJM boss Daisy Ho spends US$3.4mln on firm’s shares (GGRAsia)
Macau casino operator SJM Holdings (HKG: 0880 / FRA: 3MG1 / KRX: 025530 / OTCMKTS: SJMHF / SJMHY) chairman Daisy Ho Chiu Fung (pictured in a file photo) has spent about HKD26.5 million (US$3.39 million) this month to acquire an aggregate of nearly 8.83 million shares in the company.
SJM Holdings released its first-quarter unaudited results on May 9. The firm reported a first-quarter loss attributable to shareholders of HKD74 million, compared with a loss of HKD869 million in the prior-year quarter.
🇹🇼 TSMC: The Most Mission-Critical Company on Earth (MBI Deep Dives) $
You can listen to the Deep Dive here
Perhaps more astonishingly, Taiwan Semiconductor Manufacturing Company (TSMC) (NYSE: TSM) has a de-facto monopoly with ~90% market share in the leading edge nodes (manufacturing processes with the smallest transistor sizes and highest densities). Leading edge nodes are crucial for applications requiring the highest computing performance like supercomputers, advanced servers, high-end PCs/laptops, smartphones, AI/machine learning, and military/defense systems. As a result, the very basic tenet of modern life is essentially standing on the shoulders of one company based in Taiwan.
But how did a company in Taiwan end up being so mission-critical for nearly all leading technology companies today?
🇹🇼 Hon Hai: Focus On AI Server Growth Rather Than Earnings Miss (Rating Upgrade) (Seeking Alpha) $
Hon Hai Precision Industry Co (TPE: 2317 / FRA: HHP2 / OTCMKTS: HNHPF)‘s Q1 2024 earnings were below expectations due to non-operating factors, but its first quarter operating profit was slightly above the consensus forecast.
HNHAF’s actual April 2024 sales performance and the sell-side analysts’ consensus full-year FY 2024 financial forecasts are favorable.
I revise my rating for Hon Hai to a Buy, in view of the positive outlook for its AI server business.
🇹🇼 Asian Dividend Gems: Grape King Bio (Asian Dividend Stocks)
Grape King Bio (TPE: 1707) has one of the most remarkable consistency in profit margins among all Asian F&B companies. Its net margins ranged from 13% to 15% in the past decade.
The company’s dividend yield increased from 3.8% in 2021 to 4.1% in 2022, and 4.4% in 2023. Its annual dividend payout averaged 69.6% from 2019 to 2023.
Established in 1969, Grape King Bio is one of the leading health food, drink, and supplement products manufacturers in Taiwan.
🇹🇼 Gogoro: Still Expensive Despite Potential Recovery In Sales (Seeking Alpha) $
The company’s operating revenues went down by 12.1% year-on-year to $69.7 million, while the gross margin slumped to 6.4%.
In my view, Q2 and Q3 should be stronger thanks to the start of sales of Pulse and Jego and an improvement in scooter sales in Taiwan.
Yet, Gogoro (NASDAQ: GGR) is likely to remain in the red over the remainder of 2024, FCF is nowhere near positive territory, and the price to book value ratio is 1.6x.
While short selling seems viable, it could be best for risk-averse investors to avoid this stock as the short squeeze risk is high.
🇹🇼 Foodpanda sells its most valuable asset to Uber (Momentum Works) $
🇰🇷 Trading Idea Post Changes to KOSPI 200 and KOSDAQ 150 (Douglas Research Insights) $
KRX announced changes to KOSPI 200 and KOSDAQ 150 indices. In KOSPI 200, 6 were added and 6 were removed. In KOSDAQ 150, 13 were added and 13 were removed.
The six additions to KOSPI 200 had an average share price increase of 17.7% YTD. The six deletions had an average share price decline of 2.5% YTD.
One trading idea post the announcement of the KOSPI 200 and KOSDAQ 150 rebalances is to highlight the potential underperformers (including 20 lowest market cap stocks in KOSPI200/KOSDAQ150 post rebalance).
🇰🇷 Kangwon Land management outlines plan to up foreigner play (GGRAsia)
The only locals-casino in South Korea, the publicly-owned Kangwon Land (KRX: 035250) resort (pictured), has outlined to GGRAsia some of the steps it is taking to boost its appeal to foreign players, including potential upgrade of facilities and services offered to VIPs.
In April, the property’s operator Kangwon Land Inc, announced a KRW2.5-trillion (US$1.84-billion currently) new phase for the property, that will triple the size of its casino space by 2032.
Earlier this year the resort made sales agency agreements with entities in Taiwan and in the Philippines, to tap overseas markets.
🇰🇷 A Pop in Major K-Pop Stocks Driven by Potential Easing of Korean Contents Restrictions by China (Douglas Research Insights) $
The major K-Pop stocks had the biggest up day so far this year on 23 May, driven by potential easing of Korean cultural contents restrictions by the Chinese government.
In the past nine years, there has been a ban on Korean singers’ performances in China.
Among the major K-Pop stocks, we continue to have a Positive View on SM Entertainment Co Ltd (KOSDAQ: 041510) but bearish on HYBE (KRX: 352820) and YG Entertainment (KOSDAQ: 122870).
🇰🇷 Hansol Holdings Announces a Tender Offer of 18.53% Stake in Hansol Logistics (Douglas Research Insights) $
After the market close on 20 May, Hansol Holdings (KRX: 004150) announced that it is pursuing a tender offer for an additional 18.53% stake in its affiliate Hansol Logistics (KRX: 009180).
The tender offer price is 3,000 won, which is 22% higher than the close price on 20 May. The tender offer period is from 21 May to 10 June.
We have a positive view of this tender offer. Hansol Logistics trades at EV/EBITDA of 1.8x, P/E of 3.7x, and P/B of 0.6x based on 2023 figures.
🇰🇷 HYBE: Block Deal Sale of SM Entertainment (Douglas Research Insights) $
After the market close on 27 May, HYBE (KRX: 352820) announced that it will conduct a block deal sale of 0.75 million to 0.94 million shares of SM Entertainment Co Ltd (KOSDAQ: 041510).
The block deal sale price discount is 4% to 5.5% discount to the closing price on 27 May (95,800 won).
One of the major positive, recent issues facing the Korean K-Pop related stocks has been the potential easing of Korean content restrictions by China.
🇰🇷 Block Deal Sales of 200 Billion Won Worth of Ecopro Materials by BRV Capital (Douglas Research Insights) $
After the market close on 20 May, it was reported that Blue Run Ventures (BRV) sold 204.1 billion won (US$150 million) worth of Ecopro Materials (KRX: 450080) in a block deal sale.
The block deal sale price was 93,000 won, a 9.7% discount to the closing price on 20 May (103,000 won).
This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming years.
🇰🇷 Shift Up IPO Valuation Analysis (Douglas Research Insights) $
Shift Up (462870 KS) is getting ready to complete its IPO in KOSPI in June 2024. Established in 2013, Shift Up is one of the leading game developers in Korea. The company is offering 7.25 million shares in this IPO, of which 100% are new shares. The IPO price range is 47,000 won to 60,000 won. The IPO offering amount is 340.8 billion won to 435 billion won.
Our base case valuation of Shift Up is target price of 95,510 won, which is 59% higher than the high end of the IPO price range (60,000 won).
We believe Shift Up deserves higher valuation multiples than its peers mainly due to higher sales growth, much higher operating margins, and higher ROE.
Since its launch in April of this year, Stellar Blade (PS console game) has ranked first in sales in eight countries, including the United States, United Kingdom, Canada, and Japan.
🇰🇷 Raspberry Pi IPO Preview (Douglas Research Insights) $
Established in 2012, Raspberry Pi is getting ready to complete its IPO in London soon. Raspberry Pi provides small, single-board computers.
Raspberry Pi is backed by Sony (NYSE: SONY) and Arm Holdings PLC (NASDAQ: ARM) Nearly 72% of the company’s sales come from commercial customers embedding its products into various consumer devices and other systems.
The company generated sales of US$265.8 million (up 41.5% YoY) and operating profit of US$37.5 million (up 87% YoY) in 2023.
🇸🇬 Grab: Southeast Asia’s Rideshare Titan Deserves A Buy (Seeking Alpha) $
Grab Holdings Limited (NASDAQ: GRAB), the Singapore-based rideshare giant, has significant long-term potential in the fast-growing Southeast Asian market.
The company is experiencing profitability in its deliveries segment and aims to double adjusted EBITDA margins in this space.
Grab’s multi-pronged business, including mobility and financial services, is growing rapidly and offers additional revenue streams.
The company is still trading at a reasonable ~3.5x current-year revenue multiple, with multiple catalysts for further growth and margin expansion.
🇸🇬 Grab Remains Expensive – Likely To Trade Sideways In Intermediate Term (Seeking Alpha) $
Grab Holdings Limited (NASDAQ: GRAB) is the UBER equivalent in Southeast Asia, benefiting from the latter’s departure in 2019 and the well-diversified Super App offerings.
GRAB’s “hyper-local approach” has directly contributed to its robust top/ bottom lines, with FY2024 expected to be its first year of positive adj EBITDA margins.
Much of the top/ bottom line tailwinds are attributed to its sticky offerings, growing customer base, and robust opportunities in the high margin advertising business.
However, despite its recovery and promising raised FY2024 guidance, GRAB remains expensive compared to its Super App peers.
As a result, the stock is likely to trade sideways as it slowly grows into its premium valuations in the intermediate term.
🇸🇬 Grab Holdings: Strong Market Leadership Is Fending Off Competitors (Seeking Alpha) $
Grab Holdings Limited (NASDAQ: GRAB) is a Southeast Asian super app that is a market leader in mobility and delivery segments, with a strong moat and potential for long-term profitable growth.
In 1Q24, Grab’s mobility business delivered GMV growth of 27% YoY, implying that it is taking market share away from its closest competitor, Gojek.
Similar to the mobility segment, the 19% GMV growth for its delivery business implies it is taking market share away from its competitor, Foodpanda.
The Company’s financial services segment, though still in its early stages of development, has the potential to achieve strong revenue growth and robust EBITDA margins after its launch DigiBank in Indonesia.
🇸🇬 SEA Ltd: 1Q24 Segment + Group Analysis (Value Investing Substack)
🇸🇬 Sea Limited: Solid Growth And Improved Profitability Profile – Better Late Than Never (Seeking Alpha) $
Sea Limited (NYSE: SE) has outperformed the market thus far, thanks to its solid performance across the E-commerce, Finance, and Gaming segments, exceeding expectations.
The management’s reiterated FY2024 guidance has also contributed to the raised consensus forward estimates through FY2026.
Combined with the healthy balance sheet and minimal near-term risks from GoTo/ TikTok, we believe that SE appears to be reasonably valued compared to its peers.
The management continues to ramp up Shopee’s content ecosystem, while sustaining its live streaming efforts and improving its logistics management, boosting the stickiness/ experience of its consumer base.
However, this also means that SE’s FY2024 positive adj EBITDA margins may potentially be underwhelming. Investors beware.
🇸🇬 4 Singapore Retail REITs Sporting Distribution Yields of 5.5% or Higher (Seeking Alpha) $
Here are four Singapore-listed retail REITs with distribution yields of 5.5% or more that income investors may wish to place on their buy watchlist.
Frasers Centrepoint Trust (SGX: J69U / OTCMKTS: FRZCF), or FCT, is a retail REIT with a portfolio of nine suburban retail malls and an office building.
Lendlease Global Commercial REIT (SGX: JYEU / OTCMKTS: LLGCF), or LREIT, owns a portfolio of retail and commercial properties in Singapore and Milan, Italy.
United Hampshire US REIT (SGX: ODBU / OTCMKTS: UNHRF), or UHREIT, owns a portfolio of 20 predominantly grocery and necessity-based properties along with two self-storage properties.
Sasseur REIT (SGX: CRPU) is an outlet retail mall REIT with four outlet mall assets in Chongqing, Kunming, and Hefei in China.
🇸🇬 Better Buy: CapitaLand Integrated Commercial Trust Vs CapitaLand Ascendas REIT (Seeking Alpha) $
We compare two popular REITs under the CapitaLand banner to see which makes the better investment.
This round, we decided to look at two popular REITs with Capitaland Investment (SGX: 9CI / FRA: 5NU / OTCMKTS: CLILF) as their sponsor.
The REITs are CapitaLand Integrated Commercial Trust (SGX: C38U / OTCMKTS: CPAMF), or CICT; and CapitaLand Ascendas REIT (SGX: A17U / OTCMKTS: ACDSF), or CLAR.
CICT is a retail cum commercial REIT while CLAR is Singapore’s oldest industrial REIT.
Read on to find out which REIT is the most attractive choice for income investors.
🇸🇬 City Developments: A Real Estate Powerhouse Under The Radar (Seeking Alpha) $
City Developments Limited (SGX: C09 / FRA: CDE / OTCMKTS: CDEVY) offers an attractive valuation despite market headwinds, with a significant discount to net asset value, and promising segments in hotel management and fund management.
The company faces challenges, including a highly leveraged balance sheet, exposure to weak real estate markets like China and the UK, and higher financing costs due to rising interest rates.
Despite these risks, City Developments has remained profitable and has a strong reputation and many quality assets, making it a potentially rewarding investment.
🇸🇬 Singapore Airlines Reported Record Profits for FY2024: Can its Share Price Soar? (The Smart Investor)
Singapore’s flagship carrier delivered an impressive performance, but can its share price reclaim the high achieved earlier this year?
Air travel is booming with a strong surge in demand for holidays that has seen visitor numbers in Singapore hit 5.7 million year-to-date or 90% of pre-pandemic levels.
This news should be music to Singapore Airlines (SGX: C6L / FRA: SIA1 / OTCMKTS: SINGY / SINGF), or SIA, ears.
The blue-chip airline had just released its fiscal 2024 (FY2024) earnings that saw both its operating and net profit hit new records.
With the record profits, can the airline reclaim its 52-week high again? We dig deeper to find out.
A solid performance to end the fiscal year
Record passenger load factor offset by lower cargo yields
Growing both its fleet and network of routes
Building its KrisFlyer membership base
Multiple headwinds identified
Get Smart: Turbulence ahead
🇸🇬 Singtel Reports Stronger Underlying Net Profit for FY2024, Ups Dividend by 52%: 5 Highlights from the Telco’s Earnings (The Smart Investor)
Singtel (SGX: Z74 / FRA: SIT / SIT4 / OTCMKTS: SGAPY / SNGNF)’s is the next blue-chip company to announce its fiscal 2024 (FY2024) earnings for the year ending 31 March 2024.
The telco did not disappoint as it unveiled a new growth plan, Singtel28, while upping its total dividend to shareholders.
Although net profit plunged because of exceptional losses, the group’s underlying net profit and return on invested capital continue to head higher.
Here are five important highlights from Singtel’s latest earnings report.
A better underlying net profit performance
Intense competition in Singapore
Growth in mobile customer base for Optus
Encouraging progress for the Digital InfraCo division
Higher dividends boosted by a value realisation dividend
🇮🇳 Kansai Paint (4613 JP) (Asian Century Stocks)
India-focused Japanese paint manufacturer at 10x forward P/E
Kansai Paint (TYO: 4613 / FRA: KAP / OTCMKTS: KSANF) – US$2.9 billion) is the world’s 8th largest paint manufacturer with a special focus on automotive paint.
Kansai Paint also has a large architectural paint franchise with a large presence in emerging markets like India (Kansai Nerolac Paints Ltd (NSE: KANSAINER / BOM: 500165) and South Africa. These are sold to contractors or directly to consumers through distributors like paint shops. This segment represents 28% of revenues
🇮🇳 MakeMyTrip: Encouraging Performance Across Hotels And Packages Segment (Seeking Alpha) $
Makemytrip (NASDAQ: MMYT) stock has continued to see strong growth in revenue.
Performance across the Hotels and Packages segment has been encouraging.
I continue to take a bullish view on MakeMyTrip.
🇿🇦 Sibanye Stillwater Stock: A Cyclical Swing Underway (Seeking Alpha) $
Despite poor financial results and liquidity concerns, there is a cyclical upward momentum that may lead to a medium-term price rise for Sibanye Stillwater Ltd (NYSE: SBSW) Limited.
The company is actively restructuring and implementing cost-cutting measures, which may lead to significant savings in the future.
The market’s negative perception of future prospects and the potential for higher prices of key PGM metals support the potential upside for SBSW.
I rate SBSW stock as a “Buy” today – for the medium term.
🇿🇦 Quantum Foods earnings soar, but avian flu risk clouds outlook (IOL)
Quantum Foods Holdings Ltd (JSE: QFH) did really well to turn its 13% decline in half year revenue into a whopping 320% increase in operating profit to R61 million after trading conditions improved for poultry producers, in spite of the impact of avian flu.
Headline earnings a share (HEPS) increased by 651% to 21.7 cents, from 2.9 cents in the prior corresponding period. Earnings per share increased by 664% to 22.1 cents, from 2.9 cents.
🇿🇦 Astral starts to recover from last year’s bird flu and load-shedding losses (IOL)
Astral Foods (JSE: ARL / OTCMKTS: ALFDF) saw the benefits from initiatives to recover from last year’s load shedding and bird flu come home to roost, with half-year operating profit up a massive 461.2% to R550 million, which was at the upper end of its profit forecast range.
However, significant risks remain for the rest of the year.
The group had embarked on a “Re-Set, Re-focus and Re-start” campaign (Project 3R) after last year’s poor performance, which had proven successful so far and which aimed to reinforce Astral’s best cost poultry producer position and improve profitability, CEO Chris Schutte said yesterday.
🇿🇦 Pick n Pay share price rises as its restructuring plans gather pace (IOL)
Pick ‘n Pay (JSE: PIK / FRA: PIK) yesterday said it would report big losses in its year to February 25 results due to write-downs and large once-off costs, but its shareholders appeared surprisingly upbeat as the share price gained up to 8% at one stage yesterday.
The iconic South Africa grocery chain said in a trading statement yesterday its earnings would be impacted by a R2.8 billion non-cash asset impairment of its core Pick n Pay Supermarkets stores.
🇿🇦 Bumpy road ahead for NHI, says CEO of Life Healthcare after interim earnings uplift (IOL)
Life Healthcare Group Holdings (JSE: LHC / FRA: L53 / OTCMKTS: LTGHY / LTGHF) CEO, Peter Wharton-Hood, has criticised the National Health Insurance (NHI) scheme which was signed into law by President Cyril Ramaphosa last week, saying it was a missed opportunity to expand sustainable access to healthcare.
This comes as the business sector has widely criticised the NHI, with Business Leadership SA saying the scheme was a political gimmick ahead of the general elections next week.
🇿🇦 4Sight Holdings profit leaps as it heads into AI in the workplace (IOL)
Revenue increased 57.7% to R1.1 billion. Operating profit was up 76.9% to R39.04 million. Revenue was made up mainly of income from licences, software as a service, consulting, support and maintenance and sale of physical goods. Some R660.4m of revenue was derived from South Africa and R397m from the Rest of Africa segment. The final dividend brought the dividend for the year to 5 cents a share.
4Sight Holdings Ltd (JSE: 4SI), describing itself as a “global pioneer in diversified technology”, said Friday it had actualised its vision of Enterprise Digital Transformation, with a focus on achieving Enterprise 5.0.
This was done by merging Operational Technologies (OT) and Information Technology (IT) with the Business Environment (BE). The aim was to harness the power of Artificial Intelligence (AI) to enhance productivity and transform the way of work across various industries and sectors.
🇿🇦 Concerns over impairments hit HCI stocks on JSE (IOL)
SHARES in Hosken Consolidated Investments Limited (JSE: HCI / OTCMKTS: HKCIF) closed 1% weaker after yesterday’s trade session on the JSE amid concerns over impairments suffered from its attempted exposure in oil exploration.
HCI had eased by 1.04% to R171.62 by the close of yesterday’s trade session. The company’s stock is down by up to 4.71% in the past seven days.
🇿🇦 Southern Sun declares maiden dividend, sees further growth from policy certainty (IOL)
Southern Sun (JSE: SSU) yesterday declared its first ever dividend since listing after wealthy and international tourists helped to drive earnings in the full year to end March 2024, and said that a more certain government policy framework would boost hotel room occupancy.
Marcel von Aulock, the CEO of the multinational hospitality group, told Business Report in an interview yesterday there was potential to boost Southern Sun’s occupancy levels from the current 58.6% to around 65% with a better economic environment and more certain policy framework.
🇵🇱 I made a huge mistake (Compounding Quality) $
Selling Text SA (WSE: TXT / LON: 0QTE / FRA: 886 / OTCMKTS: LCHTF) and adding to another stock
Text SA’s moat is (probably) less strong than I initially thought.
🇵🇱 Grupa Toya (value at risk newsletter)
(Note: In Polish)
TOYA SA (WSE: TOA / FRA: 6PJ) is an importer and distributor of power tools and hand tools for both professional and domestic use. The company creates products under its own brands and outsources their production to third parties. The products offered are primarily sourced from Chinese manufacturers. Toya generates approximately 50% of its revenue outside Poland.
The Toya Group is an entity with a long history of systematic scale-up. The current market valuation can be considered moderately attractive. In 2024, a return to dividend payments and improved revenue growth can be expected. The results for the first quarter of 2024 should be considered solid.
🇵🇱 Allegro Stock May Be A Great Polish E-Commerce Pick For Your Portfolio (Seeking Alpha) $
Allegro.eu SA (WSE: ALE / FRA: AL0 / OTCMKTS: ALEGF) is a strong e-commerce company in Poland with potential for expansion in neighboring regions.
The company’s Q4 2023 results showed growth in active buyers, GMV, and consolidated sales.
Allegro aims to transform its struggling Mall segment and launch international marketplaces to accelerate growth.
Allegro’s GMV, revenue, and EBITDA are growing, and with net income recovering in 2023, this positive trend should boost its stock in the medium term.
In my opinion, Allegro is an excellent stock pick on the Polish stock market for those who have been looking at emerging markets (especially Central and Eastern Europe) for a long time.
🇵🇱 Auto Partner: The Impact of Poland’s New Minimum Wage Laws (The Wolf of Harcourt Street)
Auto Partner SA (WSE: APR / FRA: 6KF) Q1 2024 Earnings Analysis
Auto Partner’s (APR) market share of the auto parts market in Poland remains unchanged at 10%. International markets account for 50% of sales. About 70% of APR’s orders are placed online, but for international markets, 99% of orders are placed online.
In the domestic market in Poland, repair workshops account for almost two-thirds of all revenue. Specialized stores and non-specialized repairers and retailers account for 30% and 8% of revenue, respectively.
🌎 Corporacion America Airports Stock: An Interesting Valuation Case (Seeking Alpha) $
Corporación América Airports (NYSE: CAAP) operates 52 airports in six countries, primarily in Latin America.
The company posted strong Q1 2024 earnings, with revenues increasing 13.4% and operating income growing 22.4%.
The stock is undervalued and has significant upside potential, driven by potential growth in 2025 and 2026 and the possibility of multiple expansion.
🌎 Corporación América Airports: Earnings Growth Requires Minimal Additional Capital, Increasing Returns (Seeking Alpha) $
Corporación América Airports (NYSE: CAAP) has seen a 20% increase in its stock price following our last publication.
Passenger volumes are returning to pre-Covid levels, and earnings are growing rapidly with each dollar of incremental capital investment.
CAAP has competitive advantages from its extensive ownership of airport assets, particularly in Argentina, and its non-aeronautical revenue sources indexed to inflation.
🌎 MercadoLibre – A deep dive into this Latin American industry leader (Rijnberk InvestInsights)
MercadoLibre (NASDAQ: MELI) is undoubtedly one of the most attractive long-term investments, with a significant runway of growth and expansion ahead of it thanks to its two very nicely positioned platforms.
In terms of insider transactions, there are also no red flags. There have only been seven transactions over the last 12 months, all of which were buys.
Therefore, I view shares as very favorably priced and MELI as a great investment opportunity. Even if we assume a conservative 40x multiple on our FY26 EPS projection, this translates into a two-year target price of $2432 or potential annual returns of almost 13% annually.
Overall, we remain very bullish on the company’s prospects and believe shares are favorably priced at current prices of around $1750. We remain active buyers, although we would start accumulating shares more aggressively if these would return to prices below $1500-1600.
🇦🇷 🇱🇺 Adecoagro’s FY24 Is Challenged By Sugar Prices, And The Company Is Still A Hold (Seeking Alpha) $
Adecoagro Sa (NYSE: AGRO) is a South American farming company with sugarcane and farming segments in Brazil and Argentina.
The sugarcane and ethanol business has performed well due to higher production offsetting lower prices.
The farming segment has recovered strongly after a drought, with production increasing 60% YoY in 1Q24.
The company’s near-term future is challenged by falling sugar prices. On a cycle-average basis, AGRO stock is still not an opportunity.
🇧🇷 XP Inc: The Post-Earnings Sell-Off Is A Buying Opportunity (Seeking Alpha) $
XP Inc (NASDAQ: XP)’s share price is down nearly 15% since its Q1 earnings release, and down 30% since the beginning of this year.
Falling interest rates in Brazil will be a tailwind for revenue growth in upcoming quarters.
Shares are attractively valued, and management is returning capital to shareholders through share repurchases and dividends.
🇧🇷 PagSeguro Q1 Review: A Smart Bet Despite Foreign Market Risks (Upgrade) (Seeking Alpha) $
PagSeguro Digital (NYSE: PAGS) is a cheaply priced Brazilian fintech with strong growth rates expected in 2024.
Despite declining merchant figures, PagSeguro’s financials and earnings results are positive.
The company is projected to deliver a 20% CAGR in 2024, making it an attractively priced investment opportunity.
🇧🇷 Nubank (Red Beryl)
The largest neo-bank outside Asia, with 100m customers.
Nu Holdings (NYSE: NU) is the bank-holding company for Nubank, the largest neo-bank outside Asia with 100m customers. Nubank is based in Brazil, where it continues to grow at ~60% p.a., and has recently entered Mexico and Colombia, where it is accelerating from a low base.
We acknowledge the US is a much better economy than Brazil and Mexico, but at 24x Q4-2023 Run Rate Earnings (after SBC and exceptionals) we feel we are appropriately remunerated for the risk. We believe this is a truly unique situation and we are therefore proud owners of Nubank.
🇧🇷 Nu Holdings: Q1 2024, Promising New Growth Avenues, But Not Now (Seeking Alpha) $
Nu Holdings (NYSE: NU) ‘s 1Q24 results were in line with market expectations, despite profits growing 167% YoY.
There may be a deterioration in credit quality, with delinquency rates rising.
Nu’s entry into the Brazilian telecom market could be a potential growth avenue for the company.
🇧🇷 Banco Bradesco: It Takes Time For A Giant To Turn Around (Seeking Alpha) $
Banco Bradesco (NYSE: BBD)‘s financial indicators have been heavily impacted by banking digitization and increased competition.
The bank’s managers are introducing changes to the company’s structure, processes, and culture in response to these challenges.
However, despite the discounted valuation there is still no clear inflection point in the company’s results, which raises skepticism.
🇧🇷 CEMIG Q1: Lukewarm Results And Few Updates Regarding Risks (Seeking Alpha) $
Companhia Energética de Minas Gerais (CEMIG) (NYSE: CIG)
The 1Q24 results were discreet. However, some points were very positive, such as new divestments.
The risks of federalization, which I believed to be remote, have not materialized. However, this remains the main risk for the company, and is on my radar.
The discrepancy in the company’s valuation metrics versus peers draws attention. I see no reason for an average discount of more than 20% compared to peers
🇧🇷 Eletrobrás Q1 2024: Lower Than Expected, But With Dilution Of Risks (Seeking Alpha) $
Eletrobras Participacoes S/A (BVMF: LIPR3) released 1Q24 results slightly below expectations but made advances in managing its energy balance.
The company continues to trade at discounted multiples compared to peers, presenting a buying opportunity.
Despite political pressure, 1Q24 showed that legal risks may be reducing.
🇧🇷 Petrobras: Prates Ousting Breaks Uneasy Balance Between Government And Shareholder Interests (Seeking Alpha) $
Petrobras (NYSE: PBR / PBR-A) reported a softer Q1 with profits down ~38% YoY as higher refining costs and lower product volumes cut Downstream profits by 37%.
Following the earnings release, the company announced it would part ways with CEO Jean Paul Prates who had recently clashed with the government in a dispute over dividend payments.
Successor CEO Magda Chambriard is well-aligned with the government and has been a vocal supporter of additional investments, likely pushing future capex higher and depressing FCF.
Following ADNOC dropping as a bidder, Petrobras management now “does not rule out” acquiring a Braskem (NYSE: BAK) stake itself which I further view as more politically than financially motivated.
With the uneasy balance between government and shareholder interests tipping towards the government, I reiterate my cautious stance and see the possibility of shares rerating lower.
🇧🇷 Vale: Rising Iron Ore Prices A Boon, But Momentum Challenges Persist (Seeking Alpha) $
Iron ore prices have rebounded in Q2, benefiting Brazil-based Vale (NYSE: VALE), the largest producer of iron ore.
Vale’s Q1 net profit was hampered by weakness in commodity prices, but a resource rebound could boost earnings in the current quarter.
Vale’s valuation is compelling, but its technical chart shows caution, with key support at $11 and resistance at $15.
🇧🇷 Vale Stock: I Sense A Value Trap (Seeking Alpha) $
Vale (NYSE: VALE) stock trades at a low forward P/E of only 5.3x.
However, market consensus expects a decline in VALE’s EPS in the years ahead, leading to a higher implied FWD P/E.
I see such a gloomy projection as quite plausible given China’s struggling economy and VALE’s large exposure to the China market.
🇧🇷 JBS: Valuation Gap Closing After Good Q1, Still A Buy, With More Caution (Seeking Alpha) $
JBS SA (BVMF: JBSS3 / OTCMKTS: JBSAY)‘s 1Q24 results showed a margin recovery and strong performance across most segments, except for US Beef.
The company’s net debt-to-EBITDA ratio is expected to be below 3x by the end of the year, allowing for potential increases in dividends.
JBS’s stock price has increased significantly, but it still offers an attractive valuation and potential for speculation in the US Beef segment.
🇲🇽 Investing in Mexico: A start on all Mexican stocks (Bos Invest Substack)
Mexico benefits from nearshoring and high interest rates that might decrease. This combination makes it a potentially interesting country to invest in. I went over all the stocks on the Mexbol. Below the noteworthy things that I found.
🇲🇽 All Mexican stocks part 2: first potential diamond (Bos Invest Substack)
Grupo Ollamani: Recently spun off from Grupo Televisa (NYSE: TV).
Ollamani SAB (BMV: AGUILASCPO) is involved in soccer, gambling, and publication. Most important are: Aguilas Club – a professional soccer team, Aztec stadium, and PlayCity – gambling and raffle brands in Mexico.
Aleatica SAB de CV (BMV: ALEATIC):
Active in the management of transportation and airport infrastructure. The Company’s concessions portfolio comprises a number of toll roads, which interconnect the urban zones of the Federal District and the states of Mexico and Puebla. Furthermore, it is also involved in the integral management of Toluca International Airport.(petrochemical and synthetic fiber, refrigerated food, and telecommunications businesses) Alfa SAB de CV (BMV: ALFAA): This combination of assets does not look synergistic to me. In combination with debt and losses in the current year leads to next.
Alpek SAB de CV (BMV: ALPEKA / FRA: 27A / OTCMKTS: ALPKF): The Company’s activities are divided into two business segments: Polyester and Plastics & Chemicals.
Alsea SAB de CV (BMV: ALSEA / FRA: 4FU / OTCMKTS: ALSSF): Main activity is the operation of franchises. Main ones are Starbucks, Domino’s Pizza, and Burger King.
Consorcio Ara SAB de CV (BMV: ARA / FRA: 4GJ / OTCMKTS: CNRFF):
The company is active in construction and focuses primarily on the development of housing and shopping centres.
🇵🇦 Copa Holdings: A Superior Airline Stock To Buy (Seeking Alpha) $
Copa Holdings (NYSE: CPA) stock has outperformed the S&P 500, with a 54% increase compared to 27%.
Copa Airlines reported impressive margins and cost management, despite the impact of the Boeing 737 MAX 9 grounding.
The company maintains its guidance for capacity expansion and operating margin, but adjusts unit revenue and non-fuel unit cost expectations.
$ = behind a paywall / 🗃️ = Archived article
🌏 Asian family offices double down on alternatives (The Asset) 🗃️
Diversification and search for higher returns whet risk appetite for asset class with modest outlook in the near term
Family offices prefer to invest in private equity, real estate, infrastructure, and hedge funds for diversification, while venture capital attracts family offices for its potentially high absolute returns. On the other hand, private debt and real estate are chosen for their reliable income streams.
Private equity and venture capital are the most popular among family offices so far, although infrastructure is being considered the most for investment by family offices in the next 12 months, Preqin data shows.
🌏 Asia seen as ‘growth stock’ in global real estate portfolio (The Asset) 🗃️ & Why Asia Now (Hines)
Total value of investible real estate in region expected to continue growing to comprise the largest share globally
Investing in developed Asia’s real estate sector can help boost risk-adjusted returns and reduce downside volatility for global institutional investors, Hines, a global real estate investment manager, asserts in its Why Asia Now research paper (Download the full paper to learn more about the case for investing in Asia real estate.).
🇨🇳 British firms expecting hard time in China market, lobby group warns (Reuters)
The British Chamber of Commerce in China said in its position paper that the 48 measures Beijing has introduced since August to restore investor confidence fell short of “meaningful opening up” and that geopolitical tensions weighed heavy on the minds of British investors.
While foreign direct investment represents only 3% of total investment in China, it has been falling for two consecutive years and had been seen as a signal of confidence in the world’s second-largest economy and a way to sharpen the competitiveness of Chinese firms.
🇨🇳 Bulls beat a path to China stock shop but foreigners dare not go in (Reuters)
Emboldened by China’s latest measures and pledges to fix the weakest parts of its struggling economy, domestic investors are scooping up shares in a cheap stock market, while most foreign investors are hopeful but taking it slow.
Last week’s sweeping measures to support the property sector, which authorities dubbed as historic, were the latest in a series of steps China has taken since February in a bid to boost consumption, funnel state money into priority sectors and underpin the stock market.
Capital flow data shows that rally has primarily been driven by mainland investors returning to a market they abandoned during the pandemic years. Foreign money has been a trickle.
🇿🇦 SA fund managers expect local equities on JSE to rally post election (IOL)
South African fund managers surveyed by the Bank of America (BofA) are expecting local equities to rally post next week’s elections with a preference tilted towards domestic stocks, although political risks are rising.
In its latest South Africa Fund Manager Survey, BofA said yesterday local fund managers had flagged uncertainty ahead of the election, but were optimistic that domestic stocks would rally post the election.
🇧🇷 Brazil’s supreme court overturns ‘Car Wash’ corruption convictions (FT) $ 🗃️
🇲🇽 Reality checks await investors enjoying Mexico’s party (FT) $ 🗃️
Bankers and companies are optimistic but there are some critical areas of concern
Yet an outsider arriving late at the Mexico party might be struck by something else: the revellers are doing their level best not to notice: four large elephants wandering around the room.
🇲🇽 Mexico’s next leader faces gaping budget hole (FT) $ 🗃️
🇲🇽 Mexico eyes tax squeeze on banks to raise revenue (FT) $ 🗃️
Mexico is eyeing ways to squeeze the country’s banks for more tax revenue as it turns to a sector dominated by big Spanish and US lenders to help plug a hole in the public finances.
Officials have discussed a range of revenue-raising measures across sectors to reduce the fiscal deficit projected to be left by the outgoing president, Andrés Manuel López Obrador, this year.
The options discussed for banks include restricting tax deductions, and even imposing a windfall tax on profits, though efforts like the latter that require a change in the law are unlikely for now, said three people familiar with the discussions.
🌐 When economies crash: the world’s worst financial crises (Starsinsider)
Note: Investing.com has a full calendar for most global stock exchanges BUT you may need an Investing.com account, then hit “Filter,” and select the countries you wish to see company earnings from. Otherwise, purple (below) are upcoming earnings for US listed international stocks (Finviz.com):
Click here for the full weekly calendar from Investing.com containing frontier and emerging market economic events or releases (my filter excludes USA, Canada, EU, Australia & NZ).
Frontier and emerging market highlights (from IFES’s Election Guide calendar):
India Indian People’s Assembly Apr 19, 2024 (d) Ongoing Apr 11, 2019
South Africa South African National Assembly May 29, 2024 (d) Confirmed May 8, 2019
Mexico Mexican Senate Jun 2, 2024
