China Feihe

What’s happened? Developed Focus List constituent CHIF.HK reported strong
H1 results today after market close. Overall, revenue grew 48% y/y, while net
profit grew 52% y/y. EBIT grew 53% y/y. We recommend that investors add to
positions

Carabao Group

What’s happened? Emerging Focus List constituent CAG.TH reported strong Q2
results on August 7. Sales in Q2 grew 20.1% on a y/y basis, driven by
international revenue growth as well as 90% growth in third-party products for
distribution. We recommend holding on to the stock and adding to positions
once it traces back to its 50-DMA

A2 Milk

What’s happened? Developed Focus List constituent A2M.AU reported mixed
FY20 results. Revenue and EBITDA grew 32.8% and 32.9%, y/y, respectively, in
line with guidance, while EPS grew 33.5% y/y, narrowly missing estimates. We
recommend that investors hold on to the stock and add to positions once it
reclaims its 50-DMA

European Weekly Summary

Key points from this week’s report:

Please refer to the attached PDF for the full report.

 

  • The Stoxx 600 is in an Uptrend Under Pressure with five distribution days and is technically at a cornerstone. To be constructive, we look for the index to breach its key level of resistance, the 200-DMA, with leadership emerging.
  • Visibility remains low despite a better than expected Q2 earnings season; the market is pricing a V-shaped recovery: we see a “Buy the Rumors, Sell the News” Risk.
  • We believe that several opportunities remain for equity investors despite the low visibility on the recovery. First, lockdowns have accelerated several trends such as e-commerce penetration among consumer goods companies, increasing appeal of discount retail models, consumer spending on DIY and home improvement, staycation boom and increasing environmentally consciousness & alternative energy.
  • With interest rates likely to remain low, we believe that the market will be keen to pay higher multiples to have exposure to growth sectors such as Technology.
  • We also recommend to overweight Staples: the sector displays currently the best average earnings growth profile, an attractive valuation after underperforming the general market over 26 and 52-weeks. 

Ausnutria

What’s happened? Developed Focus List constituent AUST.HK posted mixed Q2
results on August 14. Overall, revenue grew 23% y/y, while net profit grew 65%
y/y, beating estimates. We recommend that investors add to positions once it
reclaims its 50-DMA

Yeti Holdings

What’s happened? Yeti released strong Q2 FY20 results, with better-thanexpected revenue and EPS, yesterday before market open. Despite the good results, the stock closed 1.6% lower. We recommend that investors hold the
stock and look for support at its 50-DMA, $42.63

Tata Consumers Limited

What’s happened? Emerging Focus List constituent TEA.IN reported strong Q1
results. Overall, revenue grew 13% y/y, while net profit grew 82% y/y, ahead of
consensus. We recommend that investors hold on to the stock and add to the
positions if it traces back to its 50-DMA.

Nissin Foods

What’s happened? As per the preliminary review, the company is likely to
record net profit growth of 30% y/y in H1. Growth was driven by an increased
demand for premium noodles in Hong Kong and mainland China. It
simultaneously brought economies of scale into play, which boosted margins.
We recommend investors to add to the positions once it traces back to 50-DMA.

Monster Beverages Corporation

What’s happened? US Focus List constituent Monster Beverages reported
strong Q2 results on August 4 after market close. Revenue growth was flat,
beating estimates by 8%, while EPS grew 11%, beating consensus by 20%. We
recommend that investors hold on to the stock and add to positions if it traces
back to its 50-DMA

Freshpet

What’s happened? Freshpet reported strong Q2 results on August 3. Revenue
grew 33.1%, driven by distribution and velocity gains, beating estimates by 5%,
while adjusted EBITDA during the quarter was $11.2M, beating consensus by
$4.5M. We recommend that investors hold on to the stock and add to the
positions if it traces back to its 50-DMA