Consumer Products and Services

Apple’s reinvention risks are yet to be priced in

29 October 2020

Services revenue surged 16% in its last quarter to $14.5 bln. With iPhone markets mature, it's the main reason Apple's stock price has doubled in two years. Yet rivals and regulators have that business in their sights. The company's $1.9 trln valuation assumes they get nowhere.

Corona Capital: Utah Jazz, Comcast, Kraft

29 October 2020

Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.

Pandemic complicates AB InBev’s debt rehab

29 October 2020

The $93 billion brewer canned its interim dividend but its ideal leverage of 2 times EBITDA remains out of reach. CEO Carlos Brito is expected to step down soon, his successor will need cash to invest in brands hit by Covid-19. Selling another chunk of the Asian unit would help.

Daimler bags lux joyride on Aston Martin’s dime

28 October 2020

The $59 bln Mercedes-maker has traded some of its technology for a 20% stake in the James Bond marque as part of a wider 1.2 bln pound rescue. In return for access to battery-operated cars, CEO Ola Kaellenius gets a free option on a super-premium brand. It’s a trip worth taking.

Nomura cashes last post-dated efficiency cheque

28 October 2020

Chief Executive Kentaro Okuda pledged to reinvent the bank when he took over in April, and now he’s delivered higher pre-tax profit in its three main units with record input from overseas. Earlier revamps did a lot of lifting. That cues Okuda to start a deeper overhaul.

It’s time for Sheldon Adelson to leave Las Vegas

28 October 2020

His $37 bln casino company may sell U.S. assets for $6 bln to double down on fast-growing Asian markets. That would thin its hedge against risks in Chinese Macau, but Nevada contributes barely 10% of earnings. Las Vegas Sands could use the cash for deals – and debts.

Big banks are ill-suited to be biodiversity cops

28 October 2020

Under pressure from investors and regulators, lenders have woken up to the financial risks of climate change. Activists are pushing for similar urgency in protecting the world’s variety of plants, animals and insects. But any big shift requires governments to lay down the law.

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.

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.

Cox: China addiction looms as big corporate risk

22 October 2020

The People’s Republic has subdued Covid-19 while the West struggles. Its GDP grew 4.9% last quarter as consumers resumed consuming. From Ford to Durex, Hermès to Unilever, multinationals are developing a Chinese demand dependency that could backfire politically and financially.

Unilever finds better recipe with new growth focus

22 October 2020

The Magnum maker’s sales jumped in the third quarter. CEO Alan Jope hopes price cuts and higher spending on marketing will ensure this is not a one-off. Sacrificing a goal of lifting the operating margin is the right thing to do. But more guidance would inspire more confidence.

Virus tests faith in food delivery economics

21 October 2020

The $285 bln industry is split between companies that connect restaurants with customers online, and those that also deliver the food. The former has better margins, but the latter has expanded the market. With demand for takeouts surging, it’s time to see who’s more profitable.

Nestlé without KitKats is logical next step

21 October 2020

The $340 bln Swiss giant’s food and drink business is shrinking, while CEO Mark Schneider is bulking up in pet care and health science. Covid-19 is accelerating the shift. Selling or spinning off confectionery, worth say $30 bln, could unlock value and sidestep a sugar backlash.

Remy’s Chinese premium may leave sour aftertaste

20 October 2020

The Cointreau maker’s shares are up over 40% this year while rivals have struggled. The main difference: it’s more exposed to China, whose economy is dealing with Covid-19 better. Yet its valuation premium doesn’t leave much space for geopolitical surprises.

Ambani succession is chance to divide and rule

20 October 2020

Asia’s richest man could divvy up the $200 bln Reliance empire between his three children. That would help avoid a repeat of his epic sibling feud. Yet scale and breadth bring influence. A carve-up that manages to keep family interests aligned could create a legacy to rival the Agnellis.

Danone shakeup needs bigger ESG splash

19 October 2020

The French dairy group is reviewing assets to restore its flagging growth. Yet disposals covering just 2% of sales look lacklustre. Selling the shrinking water unit would give CEO Emmanuel Faber cash for deals and boost the 37 bln euro company’s appeal with sustainable investors.

Panic buying scrambles tech circuitry

16 October 2020

The world's top contract chipmaker, TSMC, expects a 30% rise in sales this year. That’s flattered by customers from Apple to Huawei stockpiling semiconductors amid supply chain disruptions and U.S.-China tensions. Such hoarding makes it harder than usual to discern future demand.

CICC seeks edge in increasingly cutthroat market

15 October 2020

The investment bank leading Ant’s IPO is planning a $1 bln secondary listing in Shanghai. It could fund mergers as officials push industry consolidation and help fend off Wall Street rivals. Local peers are also angling for super-broker status, making more capital essential.

Australia’s Crown trapped inside its gilded cage

15 October 2020

The $4 bln casino empire is facing intense regulatory scrutiny for allegedly dodgy dealings involving Chinese high-rollers. It puts a new resort licence in jeopardy. Billionaire James Packer also has conceded the ownership structure may need changing, but it could be a hard sell.

P&G learns climate rebuke is no longer glacial

14 October 2020

BlackRock joined other shareholders to reject the $359 bln firm’s claim that it does plenty to protect forests. Reporting on efforts to save trees is an easy ask that companies, like Exxon, have worked around. Still, it gives investors a launching pad to push for more.