Virus may vindicate JD’s frail e-commerce strategy 2 Mar 2020 China’s $56 bln retailer expects first-quarter sales to rise at least 10%. As peers grapple with supply chain disruptions and labour shortages, JD’s less lucrative model of holding inventory and shipping goods looks more resilient. Pressure for rival Alibaba to follow will grow.
Elliott’s Twitter DM does Jack Dorsey a favor 1 Mar 2020 The activist investor wants to remove the CEO of the $26 bln social media company as it underperforms peers. Square, the fintech outfit he also runs, is a distraction. Twitter has opportunity better navigated with fresh eyes, and Dorsey could benefit from having fewer jobs, too.
Hong Kong property tycoon builds model buyout 28 Feb 2020 Peter Woo wants to take his $19 bln Wheelock empire private using cash and shares in subsidiaries. He’s shrewd to pull the plug on the discounted, thinly traded holding company while an epidemic threatens valuations. The 52% premium is fair, and a pleasant surprise for investors.
China’s virus lockdown premieres iQiyi’s next act 28 Feb 2020 Quarantine measures and contagion fears have kept millions at home, giving the country’s $18 bln answer to Netflix a boost. Luring paying subscribers with new movie releases and more looks smart. It’s a test of how the coronavirus might accelerate a shift in consumer habits.
New Reckitt Benckiser boss embarks on deep clean 27 Feb 2020 Laxman Narasimhan is making up for past neglect at the Dettol maker with a major overhaul. The pain of a 5 bln pound write-down on baby-food group Mead Johnson is only partly soothed by ambitious medium-term growth goals. Splitting the health and hygiene units will have to wait.
Viewsroom: Hong Kong in the time of Covid-19 27 Feb 2020 Small businesses are hurting, while bankers sit idle and families struggle with school closures and other containment efforts. Despite having only some 80 coronavirus cases, life – as well as retail, tourism and real estate – feels noticeably different in the Asian financial hub.
Budweiser gets a bitter taste of breakups 27 Feb 2020 Covid-19 may cost AB InBev’s Asia spinoff $170 mln in EBITDA from China for January and February. That’s some $3 bln of implied enterprise value, before factoring in the rest of the year or the region. There’s a price to pay for sprawl, but a narrower focus brings its own risks.
Consumer giants take rosy view of epidemic damage 26 Feb 2020 Spirits maker Diageo reckons the coronavirus outbreak could cost it 325 million pounds in sales this year, while Danone is forecasting a 100 million euro hit. But neither is factoring in the effect of the disease spreading much beyond Asia. Investors are already more bearish.
Nio’s $1.4 bln lifeline may pave a smoother road 26 Feb 2020 The cash-strapped U.S.-listed Chinese electric-car maker is close to securing funding from a municipal government in Anhui. Similar past agreements have failed to materialise but this one, with official ties, is a more promising immediate and longer-term pillar of support.
Super-app M&A would be sign of more rational times 25 Feb 2020 A mooted merger of Gojek and Grab could create a $23 bln Southeast Asian food-delivery-to-ride-hailing giant. Strategic investors are still keen to write cheques, but easy money from SoftBank and others is drying up fast. Consolidation is the best path to continued rapid growth.
Thai IPO tests waning market enthusiasm 20 Feb 2020 Central Retail shares opened flat on their debut. Cornerstone investors helped it price near the top of its range, although the economic timing couldn’t be worse. Thailand’s listing market has stayed hot even as post-IPO performance has cooled. One of these trends can’t last.
Apple jars investors into coronavirus realities 18 Feb 2020 The iPhone maker warned quarterly sales would miss earlier guidance as Chinese consumers and supply chains seize up. Corporate caution thus far has been shrugged off in the markets. The tech titan should help inject greater appreciation for the outbreak’s serious ripple effects.
Japan’s frail economy will struggle to fight virus 17 Feb 2020 GDP contracted by an annualised 6.3% last quarter, and that’s before any effects from the Wuhan outbreak. Monetary policy is stretched, the yen vulnerable and demand tepid. Reversing a badly timed consumption tax hike would help; banks charging corporate depositors could do more.
Virus could spur buyout appetite for Chinese food 17 Feb 2020 McDonald’s and Haidilao have closed stores as the epidemic spreads. They can weather the storm, but other big local chains are running low on cash. Until now, China’s $717 bln restaurant sector and private equity have remained wary of each other. That may be about to change.
Renault stuck tinkering with clunky Nissan tie-up 14 Feb 2020 The Japanese car giant disappointed again, logging its first quarterly loss since 2009 and cutting its profit forecast by 43% as the coronavirus hit sales and suppliers. With a merger shelved for now, recent tweaks to an alliance with Renault will need to pay quick dividends.
Samsung defies corporate governance logic 14 Feb 2020 The South Korean tech titan’s chairman has quit just months after heir Jay Y. Lee left the board. Even with yet another leadership crisis, Samsung stock trades at a record high and its valuation keeps soaring. As questions about growth mount, shareholders may regret the optimism.
Golden Goose may have one more egg to give 14 Feb 2020 Carlyle is selling the Italian fashion brand to Permira for 1.3 bln euros, three times what it paid in 2017. It’ll be the fourth buyout shop to back it. Fast growth explains the appeal and a luxury valuation of 13 times EBITDA. Moncler buoys the case for a deal to pay off again.
Nestlé revamp might require looser purse strings 13 Feb 2020 The Aero maker’s organic sales rose a decent 3.5% in 2019 as rivals struggle for growth. The next step could be acquisitions. CEO Mark Schneider has raised $15 bln selling units since 2018 and could dip into $20 bln of planned buybacks. Finding a bargain may be tricky, though.
Alibaba’s virus response is as much VC as ESG 13 Feb 2020 The Chinese e-commerce company is waiving merchant fees and slashing logistics costs. It’s just the sort of relief that local businesses need during a debilitating outbreak. And the startup-like use of cash-burning subsidies should help Alibaba keep customers and find new ones.
Aussie Caltex should fill up with Canadian cash 13 Feb 2020 Petrol station operator Couche-Tard has sweetened a bid for its peer Down Under to $5.9 bln. While only a 2% top-up, the alternatives are looking less appealing. The breakup value doesn’t quite stack up, especially in the current climate. It would be best for Caltex to accept.