Companies & Funds

Corona Capital: Snus, Construction M&A, Capgemini

27 October 2020

Concise views on the pandemic’s corporate and financial fallout: Chewing tobacco’s renaissance carries a long-term health cost; a plasterboard sale exposes Oz group Boral’s past mistakes; and the $21 bln French IT group’s third-quarter results reveal some virus immunity.

Noel Quinn deftly sails HSBC into stiff winds

27 October 2020

A 36% fall in quarterly profit was better than feared thanks in part to choppy markets. The CEO’s plan to wring more fees out of customers is also welcome. Low interest rates are only one problem, though. UK, U.S. and Chinese authorities loom too large over the bank’s prospects.

BP’s investment case falls between two stools

27 October 2020

The $54 bln oil major’s shares have sunk further than peers in recent months. Boss Bernard Looney won’t mind if his renewable energy shift leads oil bulls to prefer Exxon Mobil. He might get more bothered if investors find rival Total’s green transition more compelling.

Santander’s global blessing may be a virus curse

27 October 2020

Quarterly earnings at the $34 bln Spanish bank rallied, helped by booming loans in Brazil. That justifies boss Ana Botin’s Latin America growth focus. But with over half of profit from states with high Covid-19 infection rates, her global reach may not remain an advantage.

Ant’s $312 bln valuation puts faith in fast growth

27 October 2020

Both the Hong Kong and Shanghai shares priced with a lucky number eight. To achieve the symbolised prosperity, the Chinese fintech giant’s profit would have to double by 2022 based on the conservative 24 times multiple. Much rides on winning over customers and regulators alike.

Moutai’s charitable turn will be real market drag

27 October 2020

The Chinese liquor champion’s mediocre third-quarter results shaved $14 bln from its market cap on Monday. The $309 bln index heavyweight is giving handouts to local governments even as state investors dump shares the company gave them. Worse, there’s probably more to come.

U.S. election could be Twitter’s darkest day

26 October 2020

The $40 bln firm, Facebook and other online platforms can’t win in the Nov. 3 ballot. Banning political ads and premature claims of victory will be controversial and messy. Breakingviews imagines Jack Dorsey proposing one radical option to Mark Zuckerberg: a temporary shutdown.

Wicked big Dunkin’ deal more saccharine than sweet

26 October 2020

The Massachusetts coffee-and-donuts chain looks set to be gobbled up by Arby’s-and-Sonic owner Inspire Brands for $9 bln. Dunkin’ weathered the pandemic well enough. But the valuation is as gut-busting as one of its French crullers, and restaurant roll-ups are light on synergies.

Joe Biden is private equity’s tax boogeyman

26 October 2020

The White House wannabe aims to eradicate the perk that mints money for buyout barons. His broader plans would add to the pain for firms like Blackstone and KKR which restructured to exploit Donald Trump's tax cuts. Shareholders, clients and staff could end up at loggerheads.

Bayer’s M&A comeback is reassuringly expensive

26 October 2020

The drugs-to-seeds company is buying gene therapy specialist Asklepios BioPharmaceutical for $4 bln. It’s a rich price, but the German group needs to offset patent expiries and shake off the disastrous Monsanto deal. Expanding in a rapidly growing sector offers some protection.

Coke bottler serves up flat cross-border deal

26 October 2020

Europe’s main distributor of the iconic soda offered $6.2 bln for its Aussie peer, hoping to tap fizzier markets and expand beyond Coke. Though Coca-Cola is taking a discount for part of its 31% stake in the target, scant synergies fail to justify the premium for other investors.

Corona Capital: Mixed market messages, Chile votes

26 October 2020

Concise views on the pandemic’s corporate and financial fallout: Global stocks slumped on Monday as Covid-19 cases rose – yet some prognosticators are readying for major stimulus; and Chile has shown that pandemics don’t have to squash voter turnout.

SAP’s shifting goalposts puncture Covid-19 hopes

26 October 2020

CEO Christian Klein scrapped his 2023 financial targets, wiping 20% off the $174 bln giant’s market worth. New 2025 goals imply a large pandemic-induced boost to cloud computing, which may merit a higher multiple. Investors smarting from Monday’s selloff are apt to wait and see.

Samsung chairman bequeaths a tainted empire

25 October 2020

Lee Kun-hee, who transformed a noodle business into a smartphone and chipmaking colossus, has died at 78. The second-generation leader's mark on Korea Inc will endure, as do scandals that follow the family. Their challenge is to clean up the messy parts of his $355 bln legacy.

Corona Capital: Gilead Sciences, Virtual Santa

23 October 2020

Concise views on the pandemic’s corporate and financial fallout: Remdesivir gets formal approval; Santa goes missing from Macy’s.

Jes Staley’s Barclays strategy will go stale

23 October 2020

The CEO’s decision to keep a big trading unit has helped the $25 bln group in 2020. That’s a minor win given a fading market boom and the lender’s low valuation. As the board plans for Staley’s eventual exit, a candidate willing to cut investment banking would be the best choice.

Renault acceleration just leaves it further adrift

23 October 2020

Strong pricing means the French carmaker now forecasts positive free cash flow for the second half of 2020. But German rival Daimler’s greater Chinese presence means its operating profit for the year will be level with 2019. Worse, Renault doesn’t even look particularly cheap.

Hyundai is primed for a chaebol tune-up

23 October 2020

Days after heir Euisun Chung officially ascended to run the South Korean conglomerate, it warned of another $3 bln charge for engine problems. The results, however, should show how electric cars are paying off. That would provide momentum to tackle a broader restructuring.

Four-year deal delay dims the romance of M&A

23 October 2020

China Oceanwide’s $2.7 bln takeover of Genworth has been postponed for the 16th time since it was unveiled in October 2016. Blame politics and the pandemic for the wait. Mergers that take this long to consummate make it hard to recall the benefits they were meant to provide.

Goldman’s clawback is small but pointy

22 October 2020

CEO David Solomon and others will forfeit $174 mln of bonus payments to resolve the 1MDB bribery scandal. But there’s a question mark over former COO Gary Cohn, who cashed in when he went into politics in 2017. That career change shouldn't shield anyone from past sins.