Consumer Products and Services

Healthscope’s property trick is takeover poison

22 Aug 2018

Having rejected two acquisition bids, the struggling Australian health group will put A$1 bln of hospitals into a trust in which it will sell 49 pct - then rent the facilities back. The cash will be useful, but operating costs and risk will rise, deterring more generous suitors.

Russia will keep on mixing toys and politics

21 Aug 2018

Strong first-half sales at children’s store Detsky Mir will help Sistema, which needs to sell its stake after a costly $1.5 billion settlement with Rosneft. A less politically risky owner might help the rapidly growing toy group’s low valuation. Yet that’s in no way guaranteed.

Hong Kong death offers humbling reminder to CEOs

21 Aug 2018

Shares of snack store operator CEC doubled following news that its founder had unexpectedly died. Research suggests such investor reactions are common, albeit usually less dramatic. Boards and bosses often contribute less value than they otherwise might think.

Mulberry hits every luxury branch on the way down

20 Aug 2018

Almost three-quarter of the bagmaker’s sales are in the tough UK market. That, and a costly push into Asia amid the threat of a China-U.S. trade war, explains why Mulberry’s shares are down 60 pct this year. A fresh hit from House of Fraser’s demise is par for the course.

Pepsi’s fizzy water deal may have flat aftertaste

20 Aug 2018

As CEO Indra Nooyi departs, the drinks giant is buying SodaStream for $3.2 bln. Diversifying into the high-growth carbonated water market has strategic logic, and Pepsi has cash. But new boss Ramon Laguarta will need sparkling revenue growth to make a decent return.

Review: Philip Green’s road to boom and bust

17 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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.