Consumer Products and Services

Review: Philip Green’s road to boom and bust

17 August 2018

The British retail tycoon thrived in an era of rampant consumerism, leveraged buyouts and tax avoidance. “Damaged Goods” reveals how this propelled him to the highest echelons of British society. His subsequent downfall is a cautionary tale for today’s troubled retailers.

JD’s shopping problem worsens bad financial habits

16 August 2018

Quarterly earnings at China's $46 bln web retailer halved year-on-year, as it pays up for new users. The market is maturing and competition with Alibaba is fierce. JD's off-piste bets, and its use of non-conventional accounting practices, are adding to the noise.

Carlsberg’s drinking game victory looks temporary

16 August 2018

The Danish brewer’s second-quarter sales grew a better-than-expected 7.6 pct. The World Cup turned its big Russian business from a drag into a boon. While Carlsberg now trades at a premium to Heineken and AB InBev, less exposure to emerging markets means the bump is temporary.

Airbnb’s China business could learn from Uber

16 August 2018

The flat-sharing giant faces stiff competition and regulatory risk in the People’s Republic, but that doesn’t mean it should cut and run like Uber did. Partnering with a domestic incumbent could help both sides cash in on China’s travel boom.

Race is on to be the Netflix of weed

15 August 2018

Constellation Brands’ $4 bln investment in cannabis producer Canopy Growth could kick off a feeding frenzy, akin to that over media content. Beer isn’t the only industry with turf to defend or skills applicable to marijuana. Valuations could get even higher than the customers.

China crackdown exposes Tencent’s gaming addiction

15 August 2018

Disappointing second-quarter revenue adds to fears of a slowdown at the Chinese web giant, which has shed $170 bln in market value in 2018. Now Beijing is restricting new video games. Despite heavy investment in new businesses, Tencent’s bottom line still depends on gamers.

Fried chicken risks diverting Beijing state fund

15 August 2018

China Investment Corporation may join a bid to take private the owner of local KFC outlets, Bloomberg reports. A takeout has merits, but is also a distraction for the $940 bln giant. Its mission is to invest foreign exchange reserves abroad, not dabble in private equity at home.

Alibaba deal seats SoftBank on both sides of table

8 August 2018

Masayoshi Son's $100 bln Vision Fund is mulling an investment in the Chinese e-commerce group's food delivery units. The billionaire is a board member of Alibaba, in which his SoftBank Group holds a 29 pct stake. Potential conflicts of interest in this cosy deal raise red flags.

Ola’s UK ride poses a new threat to Uber

7 August 2018

India’s top taxi-app firm is expanding into Britain, months after it sped into Australia. It's the $7 bln group's second intrusion into one of Uber’s global strongholds. With both startups backed by SoftBank, success would raise the pressure on Masayoshi Son to engineer a deal.

Chinese peer lending protests set political trap

7 August 2018

Beijing police on Monday stopped irate investors converging on the banking regulator and demanding compensation for losses from collapsed peer-to-peer lenders. Officials are partly responsible, yet a rescue would reinforce moral hazard. The risk is that discontent spreads.

Japan Tobacco coughs up for more frontier smokers

7 August 2018

The owner of Camel and Silk Cut is paying $1.5 bln – a hefty eight times revenue - for Bangladesh's second-largest cigarette company. Its latest emerging market splurge adds sales, but risks distracting the $50 bln giant from newer alternatives, where rivals are forging ahead.

SoftBank investors grapple with Vision distortions

6 August 2018

Earnings at Masayoshi Son’s group jumped tenfold to almost $3 bln in the three months to June, helped by the sale of Indian e-commerce outfit Flipkart. Shifting values in the giant Vision Fund add to the noise. SoftBank’s attempt to tidy up won’t close the stubborn discount.

Luxury investors take benign view on trade wars

3 August 2018

A growing spat between China and the U.S. threatens sales in the sector’s two most important markets. A weaker yuan would make overseas shopping pricier for spendthrift Chinese tourists too. With share prices near record highs, investors are exposed to anything but all-out peace.

Heineken beats honourable retreat from China

3 August 2018

The Dutch giant is handing its business in the People’s Republic to CR Beer and taking a $3.1 bln stake in the country’s top brewer. Focusing on other countries makes sense. Influencing the future of its brand in the world’s largest beer market, however, will be more challenging.

Stake sales could ease CK Hutchison’s debt drag

3 August 2018

The ports-to-telecom conglomerate reported strong first-half results. But recent large acquisitions have left new Chairman Victor Li facing a mounting debt pile. Selling part of its Watsons health and beauty chain or Husky Energy would ease the burden without yielding control.

New rules will spoil India’s e-commerce party

3 August 2018

A draft plan to force online retailers to limit discounts, among other things, shields mom-and-pop stores from competition and strikes a nationalist tone. That could dramatically upset the strategies of Amazon and Walmart and leave India's marketplace looking rather Chinese.

China’s prickly new watchdog can hit at home too

2 August 2018

Fresh from its role in torpedoing Qualcomm’s $44 bln NXP bid, Beijing’s all-in-one consumer regulator is now investigating the newly-listed Pinduoduo over fake goods, sending the stock down 10 pct. China has built a powerful champion: investors are right to be afraid.

Prada’s hottest trend is investor FOMO

1 August 2018

The Italian label grew first-half sales 9 percent thanks to spruced-up handbags. Operating margins are almost two-thirds below their peak, but a full turnaround is priced in. Fear of missing out on the next Gucci-style makeover makes shareholders reluctant to wait for results.

Asian videogame giant gives away online store

31 July 2018

Tencent-backed Sea, at $4.5 bln, trades at a 50 pct discount to the sum of its three parts, Breakingviews calculates. Investors essentially get the Shopee e-commerce business for free. With Alibaba-owned Lazada a big rival in Indonesia, the valuation gap may prove hard to close.

Heineken short on ideas to close AB InBev chasm

30 July 2018

The Dutch brewer’s shares fell after it said operating margins would dip this year instead of rise. The gap between its profitability and that of bigger rival AB InBev is widening. And beyond more craft beer, Heineken has few convincing ways to close it.