Global anxiety recession does not affect LV; New Oriental plans to buy back $ 400 million

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Global Anxiety Recession Not Affecting LV

Luxury consumption is indeed less affected by cycles. When Wal-Mart was anxious to deal with the excess inventory, LVMH Group, the parent company of LV, was busy replenishing inventory-the rich didn’t care about increasing prices, so that there were not enough goods to sell.

In the first half of this year, LVMH’s various products – from wine to jewelry, from leather goods to famous watches – all achieved double-digit revenue growth, and LV, Dior, Fendi and other brands have record high profit margins.

CFO Jean-Jacques Guany said that people generally feel that the economy is about to fall into recession, and LVMH is not particularly pessimistic about the outlook. “We are not economists, we are managing a business, to take advantage of strong demand” and once consumption declines, “react quickly. , cutting costs and delaying store openings…it doesn’t seem like one of those times yet.”

  • From January to June this year, LVMH achieved 36.7 billion euros in revenue, a year-on-year increase of 28%.
  • Operating profit reached 10.235 billion euros, a year-on-year increase of 34%.
  • Operating profit margin was 27.9%, 1.3 percentage points higher than the same period last year.

In the first half of the year, the revenue and profits of the five major business groups increased almost across the board, except for watches and jewelry, which saw a slight decrease of 1%:

  • Wines and Spirits, with revenue of EUR 3.327 billion, up 23% year-on-year.
  • Profit of 1.154 billion euros, an increase of 25%.
  • Fashion and leather goods, with a revenue of 18.136 billion euros, a year-on-year increase of 31%.
  • Profit was 7.509 billion euros, a year-on-year increase of 33%.
  • Fragrances and skin care products, revenue of 3.618 billion euros, an increase of 20%.
  • Profit was 388 million euros, down 1% year-on-year.
  • Watches and jewelry, with revenue of EUR 4.909 billion, up 22% year-on-year.
  • Profit was 987 million euros, a year-on-year increase of 26%.
  • Boutique retail, with revenue of EUR 6.63 billion, up 30% year-on-year.
  • Profit of 367 million euros, an increase of 181%.

LVMH management attributed the strong performance to strong growth in Europe, Japan and the United States, the recovery of local hotels and restaurants, and the increase in duty-free consumption following the resumption of tourism, all helping wine and spirits continue to grow. The main reason for the decline in the profits of perfumes and cosmetics is that they relied too much on tourism consumption in the past. Affected by the high base last year, the profits fell slightly.

In addition to the growth of revenue and profit, the strength of the leather goods business is also reflected in the fact that LVMH raised prices for almost all brands by 3% to 8% in the second quarter. Asked by analysts if customers were resisting, management said the data spoke for itself and that it did not see “any backlash from customers.”

Revenue in China fell by double digits in the second quarter. But management also said at the earnings call that it sees signs that things are improving. (Gong Fangyi)

New Oriental to buy back US$400 million

On July 27, New Oriental released the latest financial data, they made 524 million US dollars in revenue and 105 million US dollars in operating losses from March to May this year. Revenue fell 56.8% and losses increased 3.2%.

  • Revenue and profit performance were basically in line with market expectations. The higher-than-expected loss may be related to the group’s increased investment in new businesses.
  • New businesses include: non-disciplinary training, digital learning systems, study tours, and teaching materials and equipment.
  • As of the end of May, the total number of teaching centers was 744, a decrease of 103 and 925 month-on-month and year-on-year respectively.
  • Management had previously expected the total number of teaching centers to drop below 700 by the end of the quarter.
  • Cash reserves and short-term investments totaled about $3 billion at the end of the quarter. In order to boost market confidence, New Oriental announced a repurchase of up to US$400 million, starting from July 28 and ending on May 31, 2023.
  • Management expects June-August revenue to be down 48% to 51% year over year, or about $641 million to $680 million. (Gong Fangyi)

Organization: Brand power of Chinese companies going overseas increased by 6%

On July 27, Kantar and Google released the “2022 Kantar BrandZ™ Top 50 Chinese Global Brands”. Based on consumers’ perceptions and evaluations of Chinese brands in 11 overseas markets, the research report pointed out that the overall brand power in 2022 will increase by 6%, and Chinese brands still have the potential to expand market share and enhance brand value in the global market.

  • ByteDance topped the list, with Huawei dropping to fifth. The second to fourth places are Alibaba, Lenovo and Xiaomi.
  • Top 5 companies have been them for four years in a row. ByteDance’s ranking continued to rise, Huawei continued to decline, and the other three fluctuated repeatedly.
  • The top five fastest growing brands are Ecovacs, ByteDance, SHEIN, Great Wall Motors and Anker.
  • Kantar calculates brand power based on Google Surveys, Google Search Index, and the Kantar BrandZ database. Brand Power is a BrandZ brand equity metric that measures the propensity of consumers to choose a particular brand.

In addition to the top 50 brands, the sub-list of global growth stars was selected for the first time this year. Among the 20 shortlisted companies, NIO and Huaxizi were on the list. In terms of category distribution, the top 50 lists are concentrated in consumer electronics and game categories, while growing star brands are dominated by fashion, home furnishing and smart life brands. (Intern Zeng Xing)

MINISO’s share price fell by more than 20% in two days, and the management denied the allegations of short-selling reports

On July 26, the short-selling agency BLUE ORCA CAPITAL released a short-selling report on MINISO. On the same day, the US stock MINISO closed down 14.98%.

MINISO issued an announcement on the Hong Kong Stock Exchange a day later in response, saying that the short-selling agency’s report was baseless and contained misleading conclusions and interpretations of company information. The Board of Directors decided to establish an independent committee to oversee the independent investigation of the allegations in the report.

Blue Whale Capital’s short-selling report mainly includes the following views:

It is questioned that MINISO hides store operating costs to increase valuation.

  • According to MINISO, among the more than 3,000 stores in China, only 5 are directly-operated stores, 3,146 are MINISO partner stores, and 17 are agency stores. The MINISO partner model can ensure asset-light operations and save company costs.
  • Blue Whale Capital suspects that the data of MINISO’s partner stores has been greatly exaggerated, and said that through a seven-month investigation, it was found that 620 retail stores were owned and operated by company executives or individuals, not independent franchises disclosed by the company. operate.
  • Huang Zheng, vice president and overseas chief operating officer of MINISO, owns 10 stores.
  • Blue Whale Capital believes that the information of Chinese media can be used as evidence. It intercepted the report of Yicai in mid-2019, which mentioned that the ratio of direct sales and franchise of MINISO is 4:6.

It is believed that Ye Guofu, the chairman of MINISO, transferred hundreds of millions of shareholders’ funds by registering a joint venture company.

It is believed that MINISO’s revenue is falling sharply.

  • Blue Whale Capital announced the information archived by Mingchuang on the Wayback Machine, showing that its revenue reached a peak of 17 billion yuan in 2018, a decrease of 40% from the current level.
  • Employees interviewed by them revealed that from its establishment to March 2019, MINISO closed more than 850 stores.
  • MINISO has reduced franchise fees by 63% in the past two years.

MINISO was established in 2013 and listed on the U.S. stock market in 2020. At present, it has fallen by more than 70% from its highest market value two years ago. After listing, it is still impossible to get rid of losses. From 2019 to 2021, the net profit of MINISO will be -274 million yuan, -229 million yuan and -1.298 billion yuan respectively.

  • In recent years, the expansion rate of Mingchuang stores has slowed down significantly. From 2019 to 2021, the growth rate of stores is 20%, 7.48%, and 11.76%, which is a big decline compared with the previous growth rate of over 30%.
  • On July 13, MINISO was listed on the Hong Kong Stock Exchange under the “dual main listing” model, and planned to raise HK$567 million, which broke on the day of listing. On July 27, Hong Kong stocks closed, and the stock price fell by more than 10%. (intern Xue Yujie)

Companies selling Coke, burgers and groceries continue to raise prices

Second-quarter earnings from McDonald’s, Coca-Cola and Unilever have all been released. McDonald’s and Coca-Cola’s second-quarter net profit fell by 46% and 27% year-on-year respectively, and Unilever’s net profit in the first half of the year fell by 7% year-on-year. Three companies that affect almost everyone in the world have mentioned in their financial reports that inflation makes The cost of raw materials, labor, etc. for products has risen, and they have to raise prices.

  • Unilever noted that prices for items including Hellmann mayonnaise, Cif cleaning products and Wall’s ice cream rose 11.2% in the second quarter, but at the expense of a 2.1% drop in sales and a loss of market share to other supermarkets’ own brands.
  • Unilever stressed that it has not yet passed on the full impact of rising costs to consumers and that inflation is likely to peak in the second half of the year – a possible signal that product prices will continue to rise.
  • McDonald’s revenue and net profit have both declined, indicating that food and material costs will increase by at least 12% year-on-year this year, and labor costs will increase by 10%. In order to make up for the loss caused by costs, McDonald’s food prices in the United States may increase by 8% to 9%. .
  • The price of McDonald’s cheeseburgers in the UK has risen by 20 per cent, the last time the cheeseburger rose in the UK after the 2008 global financial crisis.
  • In the second quarter of this year, Coca-Cola’s products increased by an average of 12%, the same rate as PepsiCo.
  • The impact of the price increase has not yet been reflected in sales. In the second quarter, global single-box sales increased by 8% year-on-year, mainly due to the recovery of outdoor businesses such as tourism.
  • Coca-Cola Chief Financial Officer John Murphy said prices are likely to rise in the coming months, given inflation.
  • In December last year, domestic Coca-Cola also bid farewell to the era of “3 yuan Coke”.
  • Finally, there is Wal-Mart, which has been plagued by various price levels, but CEO Doug McMillon warned about the decision to increase: “Rising prices are affecting the way customers spend, and it is expected that the purchase of ordinary goods will be reduced in the second half of this year.” Retail Industry A wave of price hikes is set off, and ordinary people may also fight inflation by downgrading their consumption. (intern Xue Yujie)


China’s gold production in the first half of the year increased by 14.36% year-on-year, but consumption declined.

The latest statistics from the China Gold Association show that in the first half of this year, the domestic raw gold output was 174.687 tons, a year-on-year increase of 14.36%. In terms of gold consumption, affected by factors such as frequent domestic epidemics and sharp fluctuations in gold prices, the national gold consumption in the first half of the year was 476.82 tons, a year-on-year decrease of 12.84%.

In the first half of the year, the profits of industrial enterprises above designated size increased by 1.0%.

In the first half of the year, industrial enterprises above designated size (industrial legal entities with main business income of 20 million yuan and above) realized a total profit of 427 million yuan, a year-on-year increase of 1.0%, and a year-on-year increase of 34.3% last year. Among the industrial enterprises above designated size, the total profits of state-controlled enterprises increased year-on-year, while the total profits of foreign, Hong Kong, Macao and Taiwan-invested enterprises and private enterprises decreased.

Tencent Games will rectify illegal accounts during the summer, or permanently ban them.

Tencent Games has released an announcement on the remediation of the game network environment in the summer. For accounts with illegal text, pictures, voice, or avatars containing illegal information, according to the degree of violation, the game account will be banned, the game account will be banned for a short time, or the game account will be permanently banned. punishment. Previously, Tencent Games stipulated that minors in summer can only log in to the game from 20:00 to 21:00 every Friday and Saturday, and launched the face recognition function for black products.

CDFG’s net profit in the first half of the year fell by more than 20% year-on-year.

China CDFG released a performance forecast. Net profit in the first half of the year was 3.938 billion yuan, a year-on-year decrease of 26.49%, and operating income also fell by more than 20%. CDF is the largest travel retail operator in China, mainly selling duty-free and tax-free goods for domestic and foreign tourists. The company said that the epidemic caused a sharp year-on-year decline in the passenger flow of the company’s duty-free stores, especially in Hainan. It is reported that in the first half of the year, the cumulative number of outlying islands at Hainan Airport dropped by 37%, and the year-on-year declines in April and May were both over 60%.

More than 2,000 local infected people have been infected in this round of epidemic in Guangxi.

  • On July 26, there were 79 new confirmed cases in the mainland, 15 in Gansu and 33 in Guangxi; 525 new asymptomatic infections were reported in the mainland, including 236 in Guangxi and 219 in Gansu.
  • Guangxi added “33+236”, mainly in Beihai City. Guangxi has reported a total of 2,094 confirmed cases.
  • Gansu added “15+219”, and social screening found 3 cases, all in Lanzhou.
  • Sichuan added “19+9”, two rounds of epidemics in Chengdu are intertwined, and the second round is in the development stage.
  • “2+14” was added in Shanghai, and 1 case of asymptomatic infection was found in community screening.
  • Twelve areas in Shanghai are classified as high- and medium-risk areas.
  • Four new local positive cases were reported in Wuhan, Hubei. From 4:00 on July 27, the main urban area of ​​Jiangxia District was temporarily controlled for three days.

Google’s second-quarter net profit fell 14%, and revenue growth was the slowest in nearly two years.

Google’s parent company Alphabet announced its second-quarter financial report that revenue in the second quarter was $69.69 billion, with revenue growth slowing to the lowest level in nearly two years, and net profit falling 14% year-on-year to $16 billion. Specific data shows that the slowdown in the advertising business growth is the main reason affecting Alphabet’s revenue. In addition, cloud business net profit loss widened to $858 million.

Microsoft’s second-quarter revenue of $51.87 billion was lower than previously estimated.

According to Microsoft’s second-quarter results, Microsoft’s revenue in the quarter was US$51.87 billion, a year-on-year increase of 12%, the lowest growth rate in the past two years. Net profit was $16.74 billion, a slight increase. Microsoft said that actual revenue and net profit were lower than previously estimated, mainly due to a stronger dollar, slowing PC sales and declining advertising revenue. The Azure Intelligent Cloud business had the best quarter, up 40% year over year.

Adidas lowered its revenue and profit forecast for this year.

On July 27, Adidas expected mid-to-high single-digit sales growth this year, after previously forecasting growth of more than 10%. At the same time, it lowered its profit forecast to US$1.3 billion due to the slow recovery of business in the Chinese market. Adidas said that due to the impact of the epidemic, revenue in the Chinese market is expected to decline at a double-digit rate in the second half of this year.

Mango TV raised membership prices for the second time this year.

On July 27, Mango TV announced that starting from 0:00 on August 9, the price of Mango TV members will be raised by 3 yuan to 10 yuan. Among them, the price of continuous monthly membership with the lowest monthly fee has risen to 22 yuan. At the beginning of this year, Mango has raised the price of continuous monthly/seasonal/yearly service.

Jiangxi Zhangshu City intermediary can get a financial incentive of 1,000 yuan for each suite sold.

Recently, Zhangshu City, Jiangxi Province announced that from July 1 to December 31 this year, registered intermediaries will receive a financial reward of 1,000 yuan for each set of commercial housing sold, and the bonus will be directly given to the intermediary. In addition to Zhangshu City, two cities in Jiangxi, Yichun and Fengcheng, have recently introduced policies to reward intermediaries for selling houses.

Au Leqi plans to continue to open hundreds of stores in China.

According to media reports, the German food supermarket chain Oleqi, which entered Shanghai in 2019, is planning to further expand the Chinese market. Roman Ratzinger, its head of the Chinese market, said that Shanghai and the Yangtze River Delta region are the areas that Oleqi is currently prioritizing, and in the future it may open 500 to 600 stores in Shanghai alone.

South Korean battery maker LG New Energy’s second-quarter net profit fell by more than 80%.

LG New Energy’s second-quarter net profit was 89.9 billion won (about 68.7 million U.S. dollars), down 85.7% from the same period last year. The decline in profits is affected by rising raw material prices. According to Benchmark Mineral Intelligence, a global battery supply chain agency, from early January 2020 to mid-January 2022, the prices of battery-grade cobalt and lithium carbonate have more than doubled and fivefolded, respectively.

Ming-Chi Kuo said demand for Android phones is weak and the worst is yet to come.

Analyst Ming-Chi Kuo said that some mobile phone component suppliers, such as the world’s largest gallium arsenide semiconductor foundry, are conservative in their forecasts for the second half of this year, mainly due to weak demand for Android phones and excessive inventory. According to Tianfeng Securities, 270 million orders for Android mobile phones have been cut off in the first half of the year. From June to July, Android mobile phone brands slowed down in order reductions, but Guo Mingchi believes that Android mobile phones have not yet passed the worst period.

EU member states have agreed to cut total natural gas volumes by 15% this winter.

On July 26, EU member states reached a political agreement to reduce gas demand by 15% from the average consumption over the past five years between August 1, 2022 and March 31, 2023. Affected by the natural gas supply crisis, on July 27, the price of natural gas in the European market exceeded US$2,300 per 1,000 cubic meters for the first time since March this year. On that day, the production capacity of Russian natural gas supplied to Europe through the “North Stream-1” pipeline has been cut to 20%. .

South Korean chip maker SK Hynix’s profit more than halved in the second quarter.

SK hynix’s operating profit rose to 4.2 trillion won ($3.2 billion) in the second quarter, a better-than-expected increase of 56% year-on-year. Hynix, the world’s second-biggest memory chip maker, said strong chip demand and a weaker won boosted its performance. It expects shipments of personal computers and smartphones to decline and demand for chips to slow in the second half of the year.

Due to excess inventory, Walmart is allowing stores to turn off automated inventory systems.

Walmart is allowing stores to shut down its Automated Inventory Ordering (ISA) system due to a severe overstock, an internal Walmart memo shows. Some employees revealed that Walmart’s inventory system will automatically order the materials already in the store, increasing inventory redundancy. Earlier, Walmart said its inventory increased by 32% in the first quarter due to inflation and supply chain impacts.

Text | Gong Fangyi Intern Xue Yujie Intern Zeng Xing

Editor | Gong Fangyi

The title picture comes from the movie “Bright Empire”

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