Top Trends and High Conviction Themes Q1 2026 Building the Future: Navigating the Next Wave Contents 03 Welcome 04 Developing a Thematic Investment Strategy | 06 | Asia in the | 10 | Asia's Data Centre Boom | | --- | --- | --- | --- | | | New World Order | 12 | China's Innovation Champions | | | | 14 | Power Up Asian Shareholder Returns | | | | 16 | High Quality Asian Credit | | 18 | Disruptive Technologies | 21 | Aerospace and Security | | | | 23 | Evolving AI Ecosystem | | | Climate Action | 28 | Energy S ...

Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2026 were $124.7 million, a decrease of $5 million or 3.9% compared to the prior year [14] - EBITDA for the quarter was $15 million, indicating solid profitability despite lower sales [5] - Gross margin decreased to 24.3%, down 2.3% year-over-year, primarily due to lower production absorption and tariffs [15] - Net income was $1.9 million, compared to $4.5 million in the prior year, with earnings per share at $0.04 versus $0.10 a year ago [15] Business Line Data and Key Metrics Changes - Handgun unit shipments into the sporting goods channel were down 1.9%, while adjusted sell-through at retail was up 7.7%, indicating market share growth [6] - Long gun shipments into the sporting goods channel declined 5.1%, with NICS down 8.3%, reflecting typical seasonal demand patterns [7] - Overall firearm unit shipments into the sporting goods category were up 3.3%, outperforming the market which was down 2.7% [7] Market Data and Key Metrics Changes - The market for firearms remains healthy and stable, with the company gaining market share during the quarter [6] - Average selling prices (ASPs) increased by 3.5% year-over-year, with handguns at $418 and long guns at $602 [8] - Distributor inventory declined over 5% sequentially and 15% year-over-year, indicating strong sell-through and positioning for future demand [14] Company Strategy and Development Direction - The company continues to focus on innovation-driven growth, disciplined cost management, and maintaining a strong balance sheet [12] - The grand opening of the Smith & Wesson Academy aims to enhance training offerings for law enforcement and consumers, contributing to brand strength [10][11] - The capital allocation strategy remains unchanged, focusing on business investment, financial flexibility, and returning value to stockholders [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and product assortment, expecting Q3 sales to be 8%-10% higher than Q3 fiscal 2025 [17] - Despite uncertainties regarding macroeconomic conditions, the company anticipates continued healthy cash generation and improved gross margins in Q3 [17][18] - The company expects operating expenses in Q3 to be about 15% higher than in Q2 due to events like the SHOT Show and new product development costs [18] Other Important Information - The company ended the quarter with $27.3 million in cash and investments, and $90 million in borrowings on its line of credit [16] - A quarterly dividend of $0.13 has been authorized, to be paid to stockholders of record on December 18 [17] Q&A Session Summary Question: Input costs and gross margins outlook - Management indicated that tariff impacts may increase in the back half of the year but should not materially affect profitability [20] - Absorption is expected to improve due to increased operating days and reduced inventory levels [22] Question: Operating expenses outlook - Operating expenses are generally consistent year-to-year, with expected increases for the SHOT Show and other activities [23] Question: Q4 outlook - Management is optimistic about Q4, expecting high single-digit to low double-digit growth compared to Q3 [25]

Summary of Central Garden & Pet Company Conference Call Company Overview - **Company**: Central Garden & Pet Company (NasdaqGS:CENT) - **Date**: December 02, 2025 Key Points Industry Insights - **Pet Industry Trends**: The pet industry is experiencing a transition back to long-term growth rates of 2%-4% after a COVID-related surge in pet adoptions. The company is optimistic about regaining household penetration by late 2026 or 2027 [6][7][8] - **Durables and Live Animals**: The softness in durables includes live animals, with a noted decline in demand post-COVID. However, the live animal business showed growth in Q4, indicating potential recovery [6][7] - **Cat Products**: There is an opportunity for growth in the cat product segment, which has been historically underserved. The company aims to increase its exposure in this category [10] Product Innovation and Strategy - **Focus on Innovation**: The company is shifting from a cost and cash focus to a growth agenda, emphasizing innovation and M&A to drive top-line growth [11][12] - **SKU Rationalization**: Continuous SKU rationalization is a priority, with a focus on private label partnerships to enhance retail relationships [13][31] - **Equine Products**: The equine segment is performing well due to effective branding and marketing strategies, including collaborations with influencers [15][17] Market Dynamics - **Aquatics Category**: The aquatics segment has been soft, attributed to a lack of innovation. The company is working on improving consumer success in this area through better product engineering and technology integration [23][24] - **Lawn & Garden Performance**: The Lawn & Garden segment has gained shelf space and market share, driven by strong execution and partnerships with retailers [26][28] Financial Outlook - **Cash Position**: The company has a strong cash balance of nearly $900 million, with plans to allocate it towards M&A in core categories, particularly pet consumables [37][39] - **Pricing Strategy**: The company plans to implement a 1% price increase to offset rising commodity costs and tariffs, indicating a challenging pricing environment [57][58] Consumer Behavior - **Private Label vs. Branded Products**: There has not been a significant shift towards private label products yet, but the company anticipates that consumer value sensitivity may lead to increased private label performance in the future [60] Operational Challenges - **Seasonality in Lawn & Garden**: The Lawn & Garden category has been slower to transition online compared to other categories, with only 10% of sales coming from online channels. The company expects gradual growth in this area [34][35] Strategic Considerations - **Potential for Diversification**: The company is open to exploring acquisitions outside its core categories if they present strong synergies and market potential [47][49] Cost Management - **Continuous Improvement**: The company emphasizes ongoing cost-saving initiatives and operational efficiencies, with a focus on integrating acquired businesses [52][53] Conclusion Central Garden & Pet Company is navigating a transitional phase in the pet and lawn & garden industries, focusing on innovation, strategic partnerships, and effective cost management to drive growth. The company remains optimistic about future opportunities, particularly in the pet segment, while also addressing challenges in pricing and market dynamics.

Core Insights - The article emphasizes the shift in institutional investors' strategies from "short-term speculation" to "long-term value discovery" in response to the "14th Five-Year Plan" which aims to enhance the inclusiveness of capital markets [2][4] - It highlights the importance of a robust institutional framework that facilitates long-term investments, particularly in areas like pension finance, which is seen as both a source of monthly income for residents and a long-term capital for the state [5][6] Group 1: Institutional Investor Behavior - The primary shift in decision-making perspective is from "short-term speculation" to "long-term value discovery," focusing on sectors with policy certainty and long-term trends like technological and green transformations [2][3] - Institutional investors are expected to transition from "holding assets" to "risk allocation," managing volatility through a more flexible and diverse set of financial tools [2][4] - Investment strategies will increasingly lean towards "passive factor" approaches, utilizing quantitative methods and Smart Beta tools to capture long-term style premiums [3] Group 2: Enhancing Capital Market Functionality - The article suggests that improving transparency of information is crucial for attracting institutional investments, allowing companies to clearly disclose their innovation and performance metrics [4] - It advocates for the development of third-party professional ratings to provide institutions with reliable benchmarks for investment decisions [4] - The introduction of diverse investment products such as technology innovation bonds and themed funds is essential to create viable investment opportunities [4] Group 3: Pension Finance Challenges and Innovations - Key shortcomings in pension finance include insufficient reserves, an imbalanced structure, and a lack of long-term friendly products that provide stable cash flows [5] - Future innovations should focus on developing products that ensure monthly payouts, increasing the proportion of long-term assets, and optimizing tax incentives to encourage participation [5][6] - The dual nature of pension finance is highlighted, serving both as a source of monthly income for residents and as a long-term capital source for the state [6] Group 4: Shenzhen's Financial Innovations - Shenzhen's innovation lies in creating an ecosystem that capitalizes on uncertainty, with government-led angel funds and a robust venture capital environment to support early-stage technology projects [6][7] - The establishment of a closed-loop system for fundraising, investment, management, and exit through the Shenzhen Stock Exchange enhances capital circulation [6][8] - The city aims to become a center for "patient capital," attracting long-term investments in technology and foundational research [8][10] Group 5: Regional Financial Collaboration - The article discusses the need for a clear financial division of labor between Hong Kong and Shenzhen, with Hong Kong focusing on international capital and Shenzhen on local innovation [9][10] - Shenzhen is positioned to be a pricing center for innovative capital, a processing hub for cross-border capital, and a connector of financial capabilities between the two cities [10]

Core Insights - The article highlights the transformation of the liquor industry from price-driven to value-driven sales, particularly during the "Double 11" shopping festival, emphasizing brand influence and consumer experience [1][4] - Jian Nan Chun achieved the highest transaction volume in the liquor industry on the Tmall platform during "Double 11," showcasing its strong brand power and market recognition [4][8] - The collaboration with the National Museum of China to create the "Bing Wu Ma Year Zodiac Wine" reflects Jian Nan Chun's strategy of cultural empowerment and innovation to drive growth [5][6] Industry Trends - The online liquor market is shifting towards value-driven growth, with brand strength and product quality becoming key drivers of sales [4][5] - The increasing rationality in consumer decision-making and the fragmentation of purchasing channels are influencing how brands like Jian Nan Chun adapt their strategies [4][5] Company Performance - Jian Nan Chun's consistent performance during "Double 11" highlights its stability and growth within the liquor industry, maintaining a leading position [8][9] - The brand's long-term strategy focuses on quality, cultural empowerment, and technological innovation, which has contributed to its strong market presence [9][10] - The introduction of innovative products like the "Bing Wu Ma Year Zodiac Wine" demonstrates Jian Nan Chun's ability to cater to diverse consumer needs and expand its market reach [6][7]

Financial Data and Key Metrics Changes - Underlying revenue growth for Q3 was 5%, consistent with H1 run rate, driven by sports medicine and advanced wound management [2][3] - Revenue for the quarter was $1.5 billion, with a reported growth of 6.3% due to a 130 basis point tailwind from foreign exchange [5] - Free cash flow guidance raised from over $600 million to around $750 million, reflecting improved working capital discipline and operational efficiencies [3][12] Business Line Data and Key Metrics Changes - Orthopedics grew 4.1% on an underlying basis, with strong performance in hips in the US offsetting softer knee sales [5][7] - Trauma and extremities grew 7.5%, with strong contributions from Evos plating system and Atos shoulder [8] - Advanced wound management grew 6%, with advanced wound care growing 1.1% and Bioactives up 12.2% [9][10] Market Data and Key Metrics Changes - US market grew 5.5%, while other established markets grew 3.9% and emerging markets grew 5.4% [5] - Excluding China, underlying revenue growth was 6.4%, with joint repair growth at 13% [3][9] - China headwinds are beginning to abate, with expectations of a gradual recovery [3][8] Company Strategy and Development Direction - Innovation remains central to growth, with over half of growth coming from products launched in the last five years [13][15] - The company is focused on cash and capital efficiency, expecting further margin expansion beyond 2025 [12][42] - Upcoming capital markets day will outline the next phase of growth and midterm priorities [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting revenue guidance for Q4, supported by new customer integrations and product placements [21][31] - The impact of Medicare reimbursement changes is anticipated to be a headwind for Advanced Wound Management sales in 2026 [10][41] - Management acknowledged the ongoing portfolio rationalization in US knees, which has led to some volume loss but remains a strategic focus [27][39] Other Important Information - The company launched several new products, including the Alevi Complete Care dressing and the Legion medial stabilized knee [14][15] - The company is committed to building a sustainable business in China, evaluating product lines for investment [43] Q&A Session Summary Question: Concerns about revenue guidance and Q4 performance - Management remains confident in Q4 revenue guidance, citing strong sales funnel and new customer integrations [21][31] Question: US knees performance and portfolio rationalization impact - Management acknowledged the gap between US knees and market performance, attributing it to ongoing portfolio rationalization [27][39] Question: Margin guidance and headwinds for 2026 - Management expects margin expansion despite headwinds from knees and hips, with specific guidance to be provided at the capital markets day [40][42] Question: Pricing trends and competitive landscape - Management noted a return to more normalized pricing levels in orthopedics, with expectations of continued competitive positioning [64][65] Question: Other recon performance and expectations for Q4 - Management expressed optimism about Q4 performance in other recon, citing strong placements and utilization [71]

Financial Data and Key Metrics Changes - Graphic Packaging's sales for Q3 2025 were $2.2 billion, with adjusted EBITDA of $383 million and an adjusted EBITDA margin of 17.5%. Adjusted EPS was $0.58 [5][22][24] - Year-on-year volumes were down 2%, but the company outperformed most markets served [10][12] Business Line Data and Key Metrics Changes - The innovation platform contributed approximately $52 million in sales, representing about 2% of total sales [35] - The company reported a modest deceleration in packaging sales, down approximately 2% year-over-year, excluding the effect of foreign exchange [14] Market Data and Key Metrics Changes - The grocery volumes showed pressure, with upper-income consumers spending differently while lower-income consumers cut back due to rising food prices [9][10] - Food and household products remained steady, while beverage and food service markets were weaker [13][18] Company Strategy and Development Direction - The Waco facility is a critical investment aimed at enhancing the company's competitive advantage in recycled paperboard, expected to ramp up production over 12-18 months [8][9] - The company is transitioning from Vision 2025 to Vision 2030, focusing on free cash flow generation [5][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the consumer packaging environment but expressed confidence in the company's ability to improve margins as demand normalizes [23][24] - The company plans to focus on cost control and inventory reduction to navigate the current market dynamics [24][25] Other Important Information - The company repurchased approximately 6.8 million shares year-to-date, reducing shares outstanding by 2.3% in 2025 [23] - A $400 million delayed draw term loan was secured to manage upcoming bond maturities, providing financial flexibility [27] Q&A Session Summary Question: Did the end markets track expectations in Q3? - Management clarified that there was no share loss; customer purchasing patterns affected volumetric performance, with the company outperforming overall market trends [35][36] Question: Confidence in Waco's EBITDA contribution for next year? - Management expressed high confidence in Waco delivering the expected $80 million EBITDA contribution, with adjustments based on market volumes [37][38] Question: Opportunities for productivity improvement? - Management highlighted various levers to improve efficiency, including capital expenditure reduction and inventory management [44][46] Question: Trends in the food service market? - Management noted that fast casual dining is under pressure, while quick service restaurants are performing better, with innovation expected to drive volume growth [50][51] Question: Impact of competitive price pressure on SBS and CUK? - Management confirmed that they have not lost market share and emphasized the cost advantages of coated recycled paperboard over bleached alternatives [60][61] Question: Clarification on Waco's start-up costs? - Management indicated that the start-up costs of $65-$75 million are primarily operating costs incurred during the facility's ramp-up, with a portion expected to carry into 2026 [80][83]

Financial Data and Key Metrics Changes - Order intake grew by 8%, marking the fourth consecutive quarter of improvement, reflecting robust demand and disciplined execution [4][5] - Comparable sales growth increased to 3% year-on-year, with adjusted EBITDA margin expanding by 50 basis points to 12.3% despite tariff impacts [4][5][24] - Year-to-date order book is up 6% compared to last year, with free cash flow expected to be between EUR 0.2 billion and EUR 0.4 billion for the full year [5][30] Business Line Data and Key Metrics Changes - Personal Health segment saw an 11% increase in comparable sales, driven by strong demand across grooming, oral healthcare, and childcare [21][22] - Connected Care achieved 5% comparable sales growth, supported by strong monitoring solutions, while Diagnostic Imaging experienced a modest decline [20][21] - Diagnosis and Treatment (D&T) comparable sales improved by 1% year-over-year, with Image-Guided Therapy showing solid growth [18][19] Market Data and Key Metrics Changes - North America remains a key growth driver, with strong demand for hospital patient monitoring solutions and a double-digit order intake growth [6][16] - In China, tender activity is gradually increasing, but centralized procurement is causing longer processing times and tougher competition [17][44] - Capital spending remains stable in Europe and Latin America, while India and Saudi Arabia continue to invest in healthcare and digitization [17] Company Strategy and Development Direction - The company is focused on driving measurable improvements in collaboration with global regulators and reinforcing trust among stakeholders [14] - Continued investment in innovation is expected to fuel growth, with a strong emphasis on AI to enhance productivity across various segments [26] - The company plans to showcase progress under its 2023 to 2025 plan at the upcoming capital markets day in February 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year commitments, with expectations for comparable sales growth in the range of 1%-3% [30][31] - The impact of tariffs is anticipated to be between EUR 150 million and EUR 200 million for the full year, with ongoing mitigation efforts [24][30] - Management remains cautious about the near-term outlook for China but is optimistic about long-term growth potential [17][44] Other Important Information - The company passed six out of nine FDA inspections with no observations, reflecting progress in quality systems [12][13] - Adjusted diluted EPS from continued operations rose to EUR 0.36, up 13% year-over-year, driven by higher earnings [27] - Free cash flow performance improved significantly, with EUR 172 million reported for the quarter [28] Q&A Session Summary Question: Future price hikes and inflation impact - Management indicated that price increases may occur due to inflationary pressures, but growth remains a critical focus [34] Question: Contribution of China to Personal Health sales - Management clarified that there was no restocking effect in China, and broad-based growth was observed across all businesses [35] Question: Maintaining productivity momentum into 2026 - Management expressed confidence in continuing productivity improvements, with a focus on mitigating tariff impacts [36] Question: Order timing in D&T and diagnostic imaging sales outlook - Management noted that order timing is uneven, with expectations for improvement in Q4 [38] Question: Impact of Section 232 on imaging and connected care - Management is actively engaging in discussions regarding tariffs and is preparing to mitigate any potential impacts [40][41] Question: GE's decision to sell its Chinese business - Management highlighted competitive positioning and innovation as key differentiators in the market [49] Question: Currency headwinds for next year - Management expects some currency headwinds in Q4, which will be factored into future guidance [50] Question: Downgrade of D&T sales guidance - Management confirmed that the downgrade is primarily related to China, with longer conversion cycles also impacting sales [54][56]

Core Insights - Align Technology, Inc. is a leading global medical device company specializing in Invisalign clear aligners and iTero intraoral scanners, competing in the dental and orthodontics industry [1] - The company has a market capitalization of approximately $10.15 billion, indicating its significant presence in the industry [4][6] - Align's stock has shown volatility with a 52-week range of $246.19 to $122, reflecting both challenges and growth potential [4][6] Financial Performance - During the Q3 2025 earnings call, Align's stock price was $140.08, marking a 6.19% increase or $8.17 from the previous day [3] - The stock price fluctuated between $139.39 and $150.78 during the trading day, indicating active investor interest [3] - Jonathan Block from Stifel Nicolaus set a price target of $200 for Align Technology, suggesting a potential increase of about 41.29% from the stock price of $141.55 at that time [2][6] Market Sentiment - Analysts, including Jonathan Block, reiterated a buy rating for Align Technology, reflecting positive sentiment regarding the company's future prospects [5] - The company's innovative products and strategic direction have positioned it favorably within the dental and orthodontics sector, driving growth and investor interest [1][5]

Financial Data and Key Metrics Changes - Consolidated sales for Q3 2025 were $582 million, up over 9% year over year, driven by strong organic contribution and pricing actions [5][9] - Adjusted fully diluted earnings per share increased by 11% to $1.30 for Q3 2025 compared to $1.17 for Q3 2024 [9] - Gross profit was $208.7 million, up from $189.7 million in the prior year, with gross profit as a percentage of net sales at 35.9%, an increase of 20 basis points [9][10] - Operating income rose to $85.1 million, a 16% increase from $73.5 million in the prior year, with an operating income margin of 14.6%, up from 13.8% [10][11] Business Segment Data and Key Metrics Changes - Water Systems sales increased by 11% year over year, with strong performance in Europe, the U.S., and Canada, despite softer housing starts [6][11] - Energy Systems sales were up nearly 15% year over year, with significant growth in the U.S., Europe, and India, and a healthy order intake [7][14] - Distribution segment sales increased by 3.4%, marking the strongest pricing performance in over two years, driven by both price and volume [8][13] Market Data and Key Metrics Changes - U.S. and Canadian Water Systems sales were up 9%, with large dewatering equipment sales increasing by 38% [11][12] - Energy Systems sales in the U.S. and Canada increased by 11%, while sales outside these regions rose by 26% [14] - The groundwater market in the U.S. was relatively flat, but the company expects low single-digit growth due to high replacement rates [44] Company Strategy and Development Direction - The company is focused on growth acceleration, resilient margins, strategic investments, and top-tier talent, with ongoing innovation and capacity expansion [17][19] - New product launches in the pressure-boosting market are expected to drive growth, with a total addressable market in the high hundreds of millions of dollars [35] - The company is expanding its global footprint with a new factory in Izmir, Turkey, to enhance capabilities in Eastern Europe and the Middle East [19][68] Management's Comments on Operating Environment and Future Outlook - Management anticipates a subdued market in the U.S. and Canada for 2026, but expects volume growth driven by innovation and strong channel relationships [24][26] - The company is optimistic about growth opportunities outside the U.S., particularly in Latin America and emerging markets [25][42] - Management highlighted the importance of maintaining strong cost discipline and strategic pricing to navigate macroeconomic challenges [4][10] Other Important Information - The company announced a quarterly cash dividend of $0.265, payable on November 20 [16] - The effective tax rate for the quarter was 27%, up from 24% in the prior year, influenced by increased foreign earnings [15] Q&A Session Summary Question: Outlook for end markets moving into next year - Management expects a flattish market in the U.S. and Canada but anticipates volume growth due to strong channel relationships and new product introductions [24][26] Question: Energy Systems margin profile - Management indicated that tariffs were a significant factor affecting margins, with expectations for incremental price increases in the coming year [28][29] Question: Backlog growth in Energy Systems - The backlog is up year over year, with favorable growth prospects for 2026 driven by ongoing investments in fuel and infrastructure [41][42] Question: Groundwater performance in North America - The groundwater market is expected to remain stable, with low single-digit growth anticipated due to high replacement rates [44] Question: Distribution business margin improvements - Management highlighted strategic cost management and improved efficiency as key drivers for margin enhancements in the Distribution segment [62][63]