China Feihe

Key points from this report:

 

  • Buy China Feihe (CHIF.HK): The stock broke out of a stage-one 11-week consolidation on strong volume and is trading constructively above its key moving averages.
  • The stock combines strong technical ratings (RS Rating 87, A/D Rating B+) and best possible fundamental ratings (SMR Rating A, EPS Rank of 99).
  • Since 2016, China Feihe’s margins have been consistently expanding, driven by the growing contribution of the high-end milk formu­la segment. Going forward, we see China Feihe as a key beneficiary of premiumization and the ongoing consolidation trends in the milk industry.
  • Consensus expects revenue growth to accelerate to 45% and 30% in 2020 and 2021, respectively (from 26% in 2019), led by its leading share in the premium Chinese infant formula market and driven by exceptional online sales growth.

China Feihe

O’Neil Methodology
• Buy: The stock broke out of a stage-one 11-week consolidation on strong volume and is trading constructively above its
key moving averages.
• Technical ratings: RS Rating 87, A/D Rating B+.
• Best fundamental ratings: Composite Rating 99, SMR Rating A, EPS Rank of 99.
• Since 2016, margins have been consistently expanding, driven by the growing contribution of the high-end milk formula segment.
• We see China Feihe as a key beneficiary of premiumization and the ongoing consolidation trends in the milk industry.
Consensus expects revenue growth to accelerate to 45% and 30% in 2020 and 2021, respectively (from 26% in 2019),
led by its leading share in the premium Chinese infant formula market and driven by exceptional online sales growth.

O’Neil Consumer/Retail Weekly

THG Holdings ( THG.GB; $10B market cap ): THG Group is a vertically integrated British digital
commerce group with a portfolio of ~7 prestige-owned brands across skincare, hair care, and cosmetics,
and ~1,000 third-party beauty brands sold through its portfolio of websites. The company is poised to grow
on the back of strong leadership position, opportunity to increase total addressable market, and strong
potential in the Ingenuity commerce platform. The stock is breaking out of a 10-week IPO base on good
volume and is actionable. See our Note here.

Emerging Markets
Emami( EML.IN;$2.5B market cap ): We are adding Emami ( EML.IN ) to our Emerging Markets Focus List as the stock has broken out of a stage-one, 10-week cup base on strong volume. Strong exposure to rural
areas, reduction in promoter pledge, expansion in distribution, and new product launches are the key
positives for the stock. See our report here.
here.

Tata Consumer Products

Key points from this report:

 

  • Buy Tata Consumer Products: The stock broke out of a stage-two 14-week cup base on strong volume a few days ago and has recently traced back to pivot on low volume. It is actionable.
  • The stock has top O’Neil Ratings, including a Composite Rating of 99, an SMR Rating of B, and an EPS Rank of 92.
  • With its strategy of premiumization along with the reorganization of its international business and the recent integration of consumer products from Tata Chemicals, the company is entering a new growth phase. Revenue is expected to grow in the high single digits and EPS in the high double digits,

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • European Markets Under Pressure: the Stoxx 600 was moved to an Uptrend Under Pressure owing to concerns over COVID-19 and Brexit. Out of the 17 indices we cover in the region, 14 are now in an Uptrend Under Pressure, including major indices such as the FTSE 100, the CAC 40, and the DAX 30. We advise caution and recommend investors to book some profits from extended names.
  • Sectors: in terms of groups, short-term momentum is improving among Health Care and Technology while deteriorating among financials, suggesting a pause in the Value versus Growth trade.
  • Focus List: Global Fashion Group (GFGX.DE) was added last week to our European Focus List. Other actionable ideas include: Ferrari (RACE.IT), Partners Group Holding (PGHN.CH), Encavis (CAPX.DE), Indutrade (INDT.SE), and Trigano (TRI.FR).

Nike

What’s happened? Nike announced strong Q2 FY21 results (ending November)
on December 18. This was driven by strong international and digital growth. We
recommend that investors hold on to positions and look for immediate support
at the 50-DMA

Malibu Boats

Malibu Boats Inc. manufactures and markets a diverse range of recreational power-
boats. The company is a leader in the performance sport boat market in the U.S. with

~31.3% share. The company’s brands include Malibu, Axis, and Cobalt (acquired in
July 2017). Additionally, the company acquired Pursuit Boats from S2 Yachts in August

2018, widening its premium brand offerings. The brands cater to different catego-
ries within the powerboat business. Malibu is a premium brand that offers the latest

innovation in performance, comfort, and convenience. Retail prices for Malibu ranged

from $60K to $190K in 2019. Axis was launched in 2009 in a more affordable price range of $60K to $110K with more ba-
sic features and options to upgrade. Cobalt retails in the range of $60K to $770K and Pursuit retails from $80K to $800K.

DraftKings

DraftKings (DKNG) operates in the large and growing online gambling and sports
betting industry. It generates revenue through three offerings: Daily Fantasy Sports
(DFS), Sportbook, and iGaming (blackjack, slots, etc.). The company offers online
sports betting (OSB) in 10 states including Colorado, Illinois, Indiana, Iowa, New

Hampshire, and New Jersey. iGaming is available in three states while DFS is avail-
able in 43 states. DKNG has ~60% share of DFS in the U.S. with 4M+ users and

eight years of customer data.