27 May 2025 | 4:37PM JST Unipres Corp. (5949.T) Stepping up cost savings to improve earnings structure, but volume outlook at major customer still unclear; stay Sell 5949.T 12m Price Target: ¥810 Price: ¥966 Downside: 16.1% Impact of Nissan restructuring not fully factored in Unipres' results briefing held on May 27 outlined the path to the company's FY3/26 operating profit guidance of ¥8 bn (vs. ¥12.2 bn in FY3/25). The company also announced its new 3-year medium-term plan for FY3/26-FY3/28. While sales a ...

Group 1: Inflation Trends in CEEMEA - Headline inflation in the CEE-3 countries showed significant declines: Poland decreased by 0.6pp to 4.3%yoy, Hungary down by 0.5pp to 4.2%yoy, and Czechia down by 0.9pp to 1.8%yoy[1][2] - In contrast, Israel experienced a notable increase in inflation from 3.3%yoy to 3.6%yoy, primarily due to a one-time 16% hike in airline fees[1] - Mixed inflation trends were observed in other regions, with Russia's inflation slightly down to 10.2%yoy, Turkey at 37.9%yoy, and South Africa up to 2.8%yoy[2] Group 2: Core Inflation Insights - Core inflation fell sharply in Czechia and Poland to 3.3%yoy and 3.6%yoy respectively, while it rose significantly in Ukraine to 11.5%yoy[3] - Core inflation remained stable in Hungary (5.2%yoy), Israel (3.1%yoy), Romania (4.7%yoy), Russia (9.4%yoy), South Africa (3.5%yoy), and Turkey (33.3%yoy)[3] Group 3: Economic Outlook and Forecasts - The CEEMEA outlook suggests a dovish stance due to ongoing disinflationary processes, with core inflation dynamics weakening across most countries except Russia, Ukraine, and Israel[4] - Average annual inflation forecasts for 2025 indicate lower expectations across several countries, with Czechia at 1.9%yoy, Hungary at 4.4%yoy, and Poland at 3.8%yoy, all below consensus[8][19][29]

Investment Rating - The report maintains a "Buy" rating for OneStream (OS), Vertex (VERX), and Waystar (WAY) based on increasing conviction following Q1 results and recent events [5][6][13]. Core Insights - The median stock in the SMID-cap software coverage is down approximately 15% year-to-date, contrasting with the S&P 500's decline of about 1%. Despite this, Q1 results were generally better than feared, with no companies lowering the high-end of their FY revenue guidance [17][19]. - The report emphasizes that management messaging has become crucial for share performance, with companies that provided clear guidance being rewarded, while those with less clarity faced negative reactions [37][39]. Key Themes Emerging from Q1 Results 1. Revenue performance was better than expected, with median revenue coming in about 1% ahead of consensus expectations [18][22]. 2. Profitability margins exceeded consensus by approximately 1.3%, although full-year outlooks remained largely unchanged [27][29]. 3. Management commentary was critical, influencing share performance more than formal guidance in some cases [37][38]. 4. Buyer behavior remained stable despite macro uncertainty, with some companies emphasizing faster time-to-value to address budget scrutiny [42][44]. 5. AI strategies are gaining focus, with companies beginning to discuss their AI roadmaps more deliberately [45][46]. Sub-Sector Takeaways - **Vertical Software**: Stocks are down about 10% year-to-date but have shown resilience with a median revenue and profitability performance coming in 2% and 9% ahead of consensus expectations, respectively [49][51]. - **Back Office Software**: Stocks are down approximately 10% year-to-date but have improved by about 16% since Q1 results, with median revenue and profitability also exceeding expectations [52][53]. - **Front Office Software**: Stocks have seen a significant decline of around 29% year-to-date, but median revenue and profitability were 1% and 6% ahead of guidance, respectively [54][56].

Depreciation: China Tower acquired 1.43mn towers from China telcos in 2015, and by Oct 2025, these tower assets will reach the end of 10-year depreciable life, and this would result in a steep drop in depreciation expenses in 2026 (hence a one-off strong net profit growth). Management noted the 1.43mn towers account for c.50% of the total acquisition in 2015 (close to Rmb200bn), and this implies each tower has depreciation expense of c.Rmb7k per year. Since the tower acquisition in 2015, China Tower decommi ...

Investment Rating - The report indicates a moderate growth in total store sales, with a rating of low single-digit growth (LSD) for the latest quad-week [1]. Core Insights - Total store sales increased by 2% in the latest quad-week, driven primarily by the Dairy category, while Frozen and Alcohol categories experienced declines [1]. - The report highlights a mixed performance in the Beverages sector, with non-alcoholic categories showing stable trends for carbonated soft drinks (CSDs), sparkling water, and sports drinks, while ready-to-drink (RTD) tea and coffee saw accelerated sales growth [2]. - In the Tobacco sector, sales growth trends remained stable for the overall cigarette category, although specific companies like IMB experienced a deceleration in growth [3]. Summary by Category HPC (Household and Personal Care) - HPC sales growth improved to 2.0% from 1.5% in the previous month, primarily driven by higher pricing, despite lower volume growth [10]. - KMB continued to show robust sales growth, while PG and CL experienced slight moderation in growth [10]. - KVUE and CHD saw improvements in sales growth, with KVUE benefiting from higher volume growth and CHD from improved volume trends [10]. Beverages - Non-alcoholic beverage sales trends were mixed, with stable trends for CSDs and sparkling water, while RTD tea and coffee saw accelerated growth [2]. - Alcoholic beverage sales trends modestly decelerated across all categories, with some companies like BF showing improved trends [2]. Tobacco - Overall sales growth in the cigarette category remained stable, but IMB saw a deceleration in growth trends [3]. Food - Sales in the Food category decelerated in the latest quad-week, contrasting with the growth seen in HPC [1]. Private Label - Private label's dollar share growth remained modest at the total store level, with slight fluctuations across various categories [9].

Economic Projections - The ECB is expected to revise down the annual average headline inflation projection to 1.7% for 2026, a decrease of 0.2 percentage points (pp) from previous estimates[5] - Core inflation projections are anticipated to be lowered to 1.8% in 2026, also a reduction of 0.2pp[17] - The growth forecast for the remainder of 2025 is likely to be downgraded to 0.1% quarter-on-quarter (non-annualized)[21] Market Variables Impact - The Euro appreciated by 4% against a basket of trade-weighted currencies and by 8% against the Dollar since the last projections[5] - Spot prices for oil and gas fell by 25% during the same period, significantly impacting inflation projections[5] - Changes in market variables are estimated to subtract 0.6pp from headline inflation and 0.3pp from core inflation projections in early 2026[12] Policy Implications - The anticipated revisions in inflation and growth projections provide strong motivation for the ECB to implement a 25 basis points (bp) cut at the upcoming meeting[21] - An additional rate cut to 1.75% is expected, likely occurring in July[21] - The new projections will also consider factors such as core inflation momentum and incoming wage data, which showed a cooling trend[15]

27 May 2025 | 11:06AM CDT Americas Food: NielsenIQ data thru 5/17: Solid total food sales, although continued pressure for packaged food Total food sales increased +2.2%/+3.2% y/y for R4/12-wks (in-line with the long-term trend of +LSD), driven by pricing and partially offset by lower volumes. However, we observed sales declines across most of our coverage, with greater pressure on center-of-store companies amid ongoing consumption shifts toward fresh and increasing competition from smaller brands and priva ...

Investment Ratings - Diageo: Sell [2] - Pernod: Buy [3] - Campari: Neutral [4] Core Insights - The US spirits market is experiencing a decline, with overall sales down -3.3% excluding RTDs, and a slight decline of -0.3% including RTDs, driven by a volume increase of +2.6% [6][27] - Diageo continues to lose market share, with volumes including RTDs declining -7.5% and sales down -3.7% [2][11] - Pernod's volumes declined -7.8%, but Jameson showed modest improvement, indicating some resilience in the brand [19] - Campari's performance is underwhelming, with volumes down -1.8% and sales falling -1.9%, despite some growth in Aperol [28] Summary by Company Diageo - The USA accounted for 36% of Diageo's FY24 sales and 46% of EBIT [2][17] - Key brands like Crown Royal and Don Julio showed mixed results, with Crown Royal volumes flat and Don Julio up +20% [11][16] - Vodka brands Smirnoff, Ketel One, and Ciroc all lost market share, with Ciroc declining -27.8% [11][12] Pernod - The USA accounted for 19% of Pernod's FY24 sales and 24% of EBIT [3][20] - Jameson volumes improved slightly by +0.2%, while Absolut and Malibu faced declines of -4.6% and -9.2% respectively [19][21] - Overall sales declined by -6.4%, indicating a challenging market environment [19][23] Campari - The USA accounted for 28% of Campari's FY24 sales [4][29] - Espolon volumes turned negative for the first time since June '23, while Aperol grew by +4.7% [28][31] - Sales fell -1.9%, with a broadly flat price/mix indicating pricing pressures [28][32]

Investment Rating - The report does not explicitly provide an investment rating for Innogrit, but it highlights positive views on related companies such as Huaqin and Lingyi, both rated as "Buy" [13]. Core Insights - Innogrit is positioned as a competitive player in the memory controller IC and SSD market, with a focus on enterprise-grade products that have higher entry barriers and longer switching cycles compared to consumer-grade products [3][6]. - The global enterprise SSD market is experiencing rapid growth, driven by an increasing volume of data, with China seeing a CAGR of 25-30% [4][6]. - Innogrit has successfully penetrated various enterprise-grade clients across local and global markets, including cloud service providers and large-scale enterprises in finance and energy sectors [3][6]. Company Profile - Innogrit is a memory controller IC design house established in 2017, focusing on the SSD market and offering products for consumer, enterprise, and data center markets [2]. - The company has launched over 10 memory controllers and has begun mass production of PCIe 5.0 memory controllers since 2024, with plans to release PCIe 6.0 products in 2026 [2]. Market Dynamics - The management of Innogrit believes that enterprise-grade products are less competitive than consumer-grade products due to their long switching cycles and higher reliability standards [3]. - The company has cumulatively shipped over 20 million memory controller ICs, 1 million industry-grade SSDs, and 250,000 enterprise SSDs, indicating a strong market presence [6].

Investment Rating - The report does not provide a specific investment rating for Longcheer (603341.SS) as it is categorized as "Not Covered" [1]. Core Insights - Longcheer is optimistic about its long-term growth prospects, driven by market share expansion in PCs and new opportunities in AI glasses and smart cockpit technology [1][7]. - The smartphone ODM business holds a global market share of 33% as of 2024, with expectations for margin recovery in 2025 due to stabilizing raw material prices [4][7]. - The company is entering new business segments, including AI glasses and automotive electronics, which are expected to contribute to growth [7]. Summary by Relevant Sections Company Overview - Longcheer (603341.SS) was established in 2002 and has become a global leader in consumer electronics ODM, with a diverse product line including smartphones, PCs, tablets, smart wearables, and automotive electronics [3]. Smartphone ODM Outlook - The smartphone ODM business is projected to recover margins in 2025 as raw material prices normalize, despite a saturated market [4][7]. - AI applications are anticipated to support future market growth, alongside increasing penetration rates in smartphone ODM [4]. New Business Development - The AI glasses segment is expected to see positive demand driven by new foundational models, while the penetration of AI PCs is projected to rise, enhancing the product replacement cycle [7]. - Longcheer's smart cockpit products are currently in testing and have begun to enter several local car OEMs, indicating a promising growth trajectory [7].