Consumer Products and Services

Jardines can benefit from a spot of retail therapy

9 Mar 2018

Underlying earnings at the Anglo-Asian conglomerate soared to $1.6 bln in 2017. But Jardine Matheson’s food-retail arm is lagging, hampered by Southeast Asia. Exiting hypermarkets, while investing more in e-commerce and convenience stores, would be a good way forward.

China courts tech and Taiwan with Foxconn IPO

9 Mar 2018

The Apple assembler is set to list a $50 bln-plus subsidiary in Shanghai. Speedy approval shows China is serious about luring tech giants onto mainland exchanges. The People’s Republic is also keen to deepen financial ties with Taiwan, even as diplomatic relations sour.

Kraft Heinz next M&A meal could be breakfast

7 Mar 2018

The $83 billion food company looks due for a deal. Mondelez is a logical target but is expensive. Hershey is growing but gives Kraft less room for error. Kellogg is cheaper and offers room to cut costs, so long as Kraft can convince insiders to sell.

Ctrip may lose altitude as China travels

7 Mar 2018

The $25 bln online travel agency built a dominant position by aggressively buying small rivals. Now ones backed by giants Alibaba and Tencent are taking off in far flung cities, where tourism is booming. Ctrip's early lead looks precarious now it will have serious competition.

BlackRock puts gun-complex boards in crosshairs

2 Mar 2018

The $6 trln asset manager outlined steps to ensure the makers and sellers of AR-15s it owns through index funds make "a positive contribution to society." The philosophy of engagement can be more effective than divestment. For directors, their jobs are at stake.

AB InBev is one step short of a strong footing

1 Mar 2018

The world’s top brewer served up better-than-expected EBITDA in the fourth quarter and a welcome chaser of volume growth. That will soothe investor worries that ruthless cost cuts are hurting sales. Now it needs to reverse falling market share in its most important U.S. market.

Momo pairs well by swiping right on China’s Tinder

27 Feb 2018

The $7 bln social network is buying Tantan for at least $600 mln. It's yet another shift for Momo, whose original online courtship effort flopped and led it into video. Though lucrative, competition and censorship are getting stiffer. This new partner should spice things up.

Alibaba delivery deal could be tasty side dish

27 Feb 2018

The $500 bln e-commerce outfit may buy the rest of Chinese startup Ele.me, which gets meals from restaurants to homes. Simply battling rival Meituan Dianping would be costly. If it can enhance Alibaba's payments, groceries and parcels businesses, though, it makes much more sense.

AIA’s warchest is good omen for investors

27 Feb 2018

After a 28 pct surge in new business last year, the Asian life insurer is sitting on a cool $12 bln. It is hard to see all of that being consumed by modest M&A or investments in growth. That means before long shareholders should be in line for a big special dividend or buyback.

George Foreman Grill maker gets leaner, not meaner

26 Feb 2018

The maker of the famed kitchen device – as well as bits and bobs ranging from faucets to fish food – is combining with its majority owner in a deal valued at $10 billion. Spectrum Brands comes out with a neater structure. Its collection of businesses, though, is still messy.

Cox: Gun lobby meets match with economic protests

23 Feb 2018

Civil rights movements often embrace boycotts. Think of Gandhi's Salt March, suffragette strikes, South African divestment or MLK's final speech, where he told followers not to buy Coke. Now it's the NRA's turn, as consumers force all manner of companies to sever ties.

General Mills pays runaway price for Blue Buffalo

23 Feb 2018

The Cheerios maker is throwing an $8 billion bone at the natural-pet-food producer to beef up sales to furry darlings. The prospect of taking over the pantry is as appealing. But to make the investment stack up, General Mills’ new pet will need to grow faster than a puppy.

Apple tide will lift fewer Asian supply boats

23 Feb 2018

Disappointing iPhone X sales have hurt the value of Foxconn and others in the production chain. The lofty expectations could make recovery harder for many. Specialists like lens maker Largan, though, are better positioned to benefit from fewer but more profitable Apple handsets.

Big bank scam reveals India fixed half a problem

22 Feb 2018

A new bankruptcy code tackles a class of large shareholders by transferring power from tycoons to creditors. Government ownership, however, remains troubling, evidenced by the metastasizing $1.8 bln Punjab scandal. New Delhi's interference is the other 50 pct to address now.

Westfield’s $15 bln sale is dangerously discounted

22 Feb 2018

The takeover premium is down to just 5 pct of the mall operator's undisturbed price. Unibail-Rodamco shares, being used as currency, have tumbled and the cash component is worth less because of exchange rates. That leaves the deal vulnerable to huffy investors who may want more.

AA roadside repair prolongs debt hazard

21 Feb 2018

The UK breakdown group’s shares lost of a fifth of their value after its new CEO warned of lower earnings and slashed the dividend. A costly push to sign up younger members is necessary but risky. Pulling it off is the only way to shrink the company’s 2.7 bln pound debt load.

Rite Aid a weak prescription for Albertsons’ ills

20 Feb 2018

The Cerberus-owned grocery chain is buying the $2.3 bln pharmacy for little premium. It’s a way for Albertsons to go public after aborted IPO efforts. But pharma’s problems and Rite Aid’s lack of scale offer a wobbly crutch for the buyer’s flat sales and declining EBITDA.

Stuffed KFC only has itself to blame

20 Feb 2018

The fried-chicken chain owned by Yum Brands had to close hundreds of UK restaurants after running out of poultry. Its plan to cut costs by ditching a long-term supplier for a cheaper one backfired. The cock-up shows that chasing higher margins is no sure way to feather your nest.

Foxconn is manufacturing a higher value in China

20 Feb 2018

The Taiwan assembler of Apple's iPhone plans to spin off a subsidiary onto the Shanghai exchange. Fresh funds will help it push into cloud computing and robotics. Given the new-share pricing norm of about 23 times earnings, Foxconn should be engineering even greater benefits.

Reckitt lacks necessary polish for another deal

19 Feb 2018

After a poor 2017, the Dettol maker gave vague margin guidance for the year ahead. Baby food maker Mead Johnson is delivering better than expected savings, but integration has been tricky. No wonder investors are queasy about a possible bid for Pfizer’s Consumer Healthcare arm.