Consumer Products and Services

Pret A Manger is new pawn in global coffee wars

29 May 2018

JAB is acquiring the UK food outlet for $2 billion. After spending roughly $30 bln on coffee and food chains over the past two years, the German conglomerate is a growing threat to larger rivals Nestle and Starbucks. An agile and ambitious model gives it a good shot at success.

Nestlé would benefit from a sugar detox

28 May 2018

The Swiss food group’s CEO wants to spruce up a tired portfolio by buying and selling brands worth 10 percent of group sales, or about $9 bln. The recent Starbucks licensing deal gets him around halfway there. Offloading low-margin confectionery brands is the next logical step.

Macau will struggle to kick its gambling addiction

28 May 2018

The Chinese region wants to be more like Las Vegas, and focus on varied nightlife and family fare. One official says resorts could generate 40 pct of revenue beyond the casinos. It's a worthwhile target for Galaxy and peers, but Macau's infrastructure is one of many hurdles.

U.S.-China spat poses serious hazard for WTO

25 May 2018

The two countries are sparring at the Geneva-based organisation about how the WTO should handle Beijing’s brand of state capitalism. A U.S. threat to veto the appointment of judges could paralyse the trading body’s dispute resolution mechanism – and hold the outfit to ransom.

Smurfit Kappa’s aloofness looks justified, for now

24 May 2018

The Irish packager spent 460 mln euros on a Dutch mill after snubbing a bid from International Paper. That may bolster the case for staying solo, even if its obduracy is angering shareholders. But the U.S. group can afford to pay more, and make Smurfit’s cold shoulder untenable.

Samsonite short case piles up Hong Kong’s baggage

24 May 2018

An experienced stock sceptic has laid into the $6 bln luggage-maker’s governance and accounting. It’s a bigger and better-known company than the Chinese minnows typically targeted. For a market relaxing standards to broaden its appeal, Samsonite gives investors more to unpack.

U.S. threatens autos with scorched-earth gambit

24 May 2018

Raising the prospect of tariffs on all vehicle and parts imports may just be President Trump's fuel-injected bargaining ploy for NAFTA negotiations. If the levies actually happen, it could bring a few more jobs stateside. But it'd leave domestic and foreign automakers reeling.

Adobe pays princely sum to add to virtual realm

22 May 2018

Graphics design and video production may be the $120 bln software juggernaut’s crown jewels, but Adobe wants to expand in the lucrative land of helping companies go digital. Magento could be key to unlocking faster growth. Yet at 11 times trailing sales, it’s a stiff price.

Singapore Airlines is cruising comfortably

18 May 2018

The $10 bln flag carrier beat forecasts with a 148 pct jump in annual earnings. Its overhaul is working, and a plan to absorb regional arm SilkAir looks sensible. There is more to do, but the group can afford to take its time evaluating growth options, including India.

Ocado investment case requires heavy guesswork

17 May 2018

The UK retailer’s shares rose 45 pct after U.S. grocer Kroger agreed to use its online-delivery technology and take a 5 pct stake. The deal solves Ocado’s cash flow problems. But a valuation of almost four times sales is toppy given scant detail on its international partnerships.

Royal Mail puts absurd twist on golden handshake

17 May 2018

The UK postal service’s 5.8 mln pound payment to new CEO Rico Back is a familiar way to get a chosen candidate to jump ship. Yet Back already works for a Royal Mail subsidiary. It adds a layer of farce to so-called “buyouts” that have hit investor pockets and board reputations.

Viral game can unlock Tencent’s treasure chest

16 May 2018

The online giant has shed $95 bln of market value this year amid worries about falling margins. A 48 pct jump in first-quarter revenue helps ease those concerns. The Chinese launch of Fortnite, the game that has gripped teens across the world, also plays to Tencent’s strengths.

A Hollywood star may be born in Hong Kong

16 May 2018

STX, behind movies such as Jackie Chan's "The Foreigner", is ready for a stock-market premiere. Backers Tencent and John Malone co-star but the IPO features China, where the young studio has an edge. A somewhat original script also should support a valuation of at least $2.5 bln.

Speed matters for Toshiba’s new CEO

15 May 2018

Nobuaki Kurumatani’s plan for life after memory chips, while vague, suggests a welcome focus on returns. Electronics giants are slow-moving juggernauts, but with hedge funds to keep onside, he needs the $17 bln Japanese group to move faster than rivals like Hitachi have before.

China pivot reduces Foxconn’s appeal

15 May 2018

A Shanghai listing will separate out some of the $52 bln Taiwanese group’s most exciting businesses. It is buying back stock to offset the impact on its own earnings. That doesn’t change the fact that it is turning into an awkward mix of holding company and contract manufacturer.

Walmart wages dangerously big online war in India

9 May 2018

Even as an e-commerce push at home stumbles, the mega-retailer is plowing $16 bln into Flipkart. It pits Walmart against Amazon in a huge unprofitable market, and also challenges Alibaba, which backs Paytm Mall. After missteps in China, this will be a make-or-break overseas deal.

Billionaire’s Burberry sale is fashionably early

9 May 2018

The luxury brand’s top investor, a vehicle of Albert Frere, has sold its 6.6 pct stake. It’s an odd move for the typically long-term owner. But Burberry’s valuation rivals peers like LVMH, and boss Marco Gobbetti’s turnaround will be a lengthy process. It’s a good time to exit.

Hong Kong mall deal feeds economic-hub dreams

9 May 2018

New World Development will invest $2.5 bln to build a sprawling retail centre by the city's remote airport. The pricey project goes beyond wooing flyers, though. It's a bold bet that troubled infrastructure initiatives to link mainland China, Hong Kong and Macau will pay off.

A Fujifilm cash bid for Xerox would work on paper

8 May 2018

Carl Icahn is fighting the Japanese company's complex plan to take control of its U.S. partner, but he's open to a cleaner $11 bln deal. That just about stacks up for Fujifilm in terms of debt needed and an investment return. It'd be far harder to justify strategically, though.

JD’s Alibaba defence strains “jam tomorrow” model

8 May 2018

Quarterly sales at the Chinese web retailer jumped by a third to $16 bln. But investments in logistics and new tech squeezed operating margins. For investors, JD's fierce battle with Jack Ma's e-commerce giant means profitability could well continue to be the chief casualty.