|Bid||89.85 x 800|
|Ask||89.90 x 800|
|Day's Range||89.41 - 93.19|
|52 Week Range||30.20 - 98.96|
|Beta (5Y Monthly)||1.28|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 18, 2020 - Nov 23, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||90.39|
(Bloomberg Opinion) -- Although one in four of all adult Indians use tobacco, the country’s addiction runs far deeper. The government, too, has a toxic dependence. It’s called ITC Ltd. Formerly known as Imperial Tobacco of India, later renamed India Tobacco Company, and finally truncated to just ITC, the 110-year-old conglomerate is 29.4% owned by British American Tobacco Plc. About 28.5% is controlled by various Indian state-run insurance companies and a government-controlled bad bank.And therein lies the problem. The large quasi-state ownership is acting as a value trap. It’s preventing the $25 billion enterprise from being carved up into a pure cigarette company, owned by BAT, and a supply-chain platform like China’s Pinduoduo Inc., which is nearly four times bigger in enterprise value. It's a missed opportunity, not just for ITC’s minority shareholders, but for India. Now that the country is giving farmers the freedom to sell their produce outside state-designated market yards, a corporate buyer like ITC that has distribution capabilities in the smallest of Indian towns (thanks to cigarettes) has a shot at building a meaningful digital, agri-business franchise. One that’s able to obtain better prices for producers. As for the core tobacco business, London-based BAT has tried in the past to raise its stake and take over the cigarette maker, but local managers have seen it off using Indian financial institutions’ voting power. However, many investors are now wondering if empire-building by ITC’s management, in the garb of protecting national interests, has gone too far.A cash-strapped New Delhi, which is delaying fiscal support to an economy expected to lose a 10th of its real output this year to Covid-19, also needs to rethink its stance: What additional harm will befall if BAT wins ITC’s successful cigarette division, paying a hefty control premium to acquire smokers, a vanishing breed in developed markets? In return, India can wrest a time-bound commitment from the new owner to steer the revenue toward, say, 25% reduced-risk products like the Swedish snus and heat-not-burn devices. That will mean a fall in future healthcare costs from lower tar consumption. ITC scored 0.62 in Foundation for a Smoke-Free World’s 2020 Tobacco Transformation Index, better than China National Tobacco Corp., but way behind BAT, Philip Morris International Inc. and Swedish Match AB. “Companies that offer reduced-risk products are mostly focusing their efforts on selected high/medium income countries, where overall smoking rates are lower and cigarette sales are already declining,” says the new study. India can negotiate a better outcome with BAT.Let the $3.3 billion cash pile plus the non-tobacco parts — hotels, information technology, finance, fashion, potato crisps, paper, safety matches and what not — get sequestered under a separate holding company. The Indian managers get to keep what they can turn into a digital, agri-business-led supply chain, and sell the rest. This way, the government will extract much-needed budgetary resources. The value trapped in the conglomerate will get released.The deadlock between two equally poised large shareholders is hurting minority owners. The stalemate has gone on for too long. A quarter-century ago, the fight was over whether ITC should be setting up power plants. The state-led economy had just started liberalizing and there was an acute shortage of electricity. The Indian cigarette maker was sitting on a cash hoard. Had BAT wrested control, it wouldn’t have allowed the funds to be put into unrelated businesses. But BAT’s tenuous hold weakened after a currency-control violation saw a change in leadership at the Kolkata-based firm.Yogesh “Yogi” Deveshwar, the new chairman in 1996, took the government’s help to defeat BAT’s plan for a separate unit to sell international brands like 555 State Express and Benson & Hedges cigarettes in India. Since then, the local business has increasingly charted its own course. Now, BAT can’t even try to mount a bid for all of ITC because tobacco has been made off-limits for foreign direct investment since 2010. That, too, was done to keep ITC in Indian hands.To what end, though? As much as 84% of ITC’s $2.8 billion pretax profit last year came from cigarettes, but four-fifths of the $325 million-plus capital expenditure was in snacks, hotels and paper. The dividend payout ratio did jump last year to 81%, yet the previous 18 years’ average is just 50%, almost 20 percentage points lower than BAT’s distribution.The U.K. associate, which has just one representative on the Indian firm’s board, has returned $2.1 billion to its own shareholders via buybacks over the past six years. No such luck for ITC investors. They can’t be offered a buyback, lest it increases BAT’s shareholding. Widows and pensioners get a 6% dividend yield, 5 percentage point more than on the benchmark Nifty 50 index. It’s a bit like collecting pennies in front of a value-crunching steam roller. In the past 10 years, ITC shares have lost 11% of their dollar value, while an investment in Nestle India Ltd. has tripled. The opportunity ahead is clear. Agri-business offers the chance “for building a digital platform linking retailers with consumers, something that Chinese companies like Pinduoduo have done successfully," said Gaurav Patankar, head of emerging market equity strategy at Bloomberg Intelligence. As Mukesh Ambani, India’s richest man, and the 152-year-old Tata Group mimic platforms from the likes of Tencent Holdings Ltd. and Alibaba Group Holding Ltd., ITC can plug another gap, provided New Delhi gives up its addiction.Tobacco is toxic. India is finding that tobacco nationalism is an even harder habit to quit.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
NEW YORK, Oct. 20, 2020 (GLOBE NEWSWIRE) -- Wall Street Reporter, the trusted name in financial news since 1843, has published reports on the latest comments and insights from leaders at: Sea Limited (NYSE: SE), Logiq (OTC: LGIQ), Peak Fintech (OTC: PKKFF) (CSE: PKK), and Pinduoduo (NASDAQ: PDD).Accelerating digital transformation in Asia is driving explosive growth opportunities in sectors as diverse as fintech, agriculture, esports, and ecommerce. Wall Street Reporter highlights the latest comments from industry thought leaders:Sea Limited (NYSE: SE) Forrest Li, Chairman and Group CEO “Firing on All Cylinders” https://bit.ly/2FOjWoCPeak Fintech Group (OTC:PKKFF) (CSE: PKK) CEO Johnson Joseph: “China Fintech Revenues Ready to Explode” https://bit.ly/3maNi01Logiq, Inc. (OTC: LGIQ) President, Brent Suen: “The Shopify of Mobile in SE Asia w $40+ mil Revenues Run Rate” https://bit.ly/3g9H0KmPinduoduo Inc. (NASDAQ: PDD) David Liu, VP Strategy: “Digital Transformation of Agriculture is RMB 1 Trillion Opportunity” https://bit.ly/2FNBmSgSea Limited (NYSE: SE) Forrest Li, Chairman and Group CEO “Firing on All Cylinders” “...We are moving into the second half of 2020 firing on all cylinders. Each of our businesses is successfully adapting to capture the immediate growth opportunity in front of us. Each of them is also ideally positioned for the long-term with a significant runway ahead...We saw sustained and growing user engagement across our platforms through the second quarter and beyond. And this gives us further confidence that the rapid shift to digital lifestyles is in fact a permanent and irreversible change that will drive significant growth opportunities for Sea over the long term.”“...Garena had another excellent quarter and achieved several historical highs. We reached more people than ever before, with close to 500 million active users around the globe playing Garena games during the quarter. That represents an increase of 61% year-on-year. As we rolled out more new content than ever to entertain and engage our users, our paying user ratio improved further to hit 10%. Our quarterly paying user number grew at a very strong rate of 91% year-on-year to reach 49.9 million.”“...Shopee recorded accelerated growth across key metrics and in each of our markets, as more consumers and sellers turned to Shopee as their go-to shopping and selling destination...consumers and sellers in our region who are embracing e-commerce at an unprecedented pace…In the second quarter, we recorded accelerated growth in gross orders, which increased by 150% year-on-year to reach 615.9 million compared to 111% in the first quarter… In Indonesia, our largest market, our year-on-year growth rate in terms of orders further accelerated. We recorded over 260 million orders for the market in the second quarter, or a daily average of over 2.8 million orders, an increase of over 130% year-on-year.”“SeaMoney further accelerated growth in the second quarter. Accelerating digitalization is driving increased needs for quick and convenient online and contactless payment options, as well as other digital financial services... SeaMoney's focus continues to be leveraging on Sea's strategic leadership positions in some of the largest use cases for digital payments in e-commerce and digital entertainment….mobile wallet total payment volume increased to more than $1.6 billion for the second quarter compared to more than $1 billion in the first quarter...We see significant growth ahead in the digital payments and digital financial services segment, driven by the rapid expansion of the digital economy in our region...We will continue to invest efficiently in scaling up the SeaMoney business to solidify our leadership position across our markets.”Sea Limited (NYSE: SE) Q2 2020 Earnings Call Highlights: https://bit.ly/2FOjWoCLogiq, Inc. (OTC: LGIQ) President, Brent Suen: “The Shopify of Mobile in SE Asia ”w $40+ mil Revenues Run Rate”NEXT SUPER STOCK conference presenter Logiq, Inc (formerly Weyland Tech) (OTC: LGIQ) President Brent Suen recently spoke with Wall Street Reporter’s investor audience about LGIQ’s latest developments, including the acquisition of an AI technology company, accelerating revenue growth with a run-rate of $40 million, new fintech partnerships in the booming Indonesia market, and plans for NASDAQ uplisting. Brent also explained why LGIQ has compelling upside, when comparing valuation multiples, which is just a fraction of its peers in the e-commerce/fintech space such as SHOP, SE, STNE, and JMIA, which trade at 30X revenues.Watch LGIQ Next Super Stock livestream video: https://bit.ly/3g9H0KmClick here to join LGIQ NEXT SUPER STOCK livestream October 21: https://bit.ly/2PX0SpHPeak Fintech Group (OTC:PKKFF) (CSE: PKK) CEO Johnson Joseph: “China Fintech Revenues Ready to Explode”NEXT SUPER STOCK conference presenter Peak Fintech Group (OTC:PKKFF) (CSE: PKK) CEO Johnson Joseph, recently spoke with Wall Street Reporter’s investor audience about PKKFF fast growing China fintech business which serves connects small-medium business with commercial lending solutions. Joseph explained how Peak Fintech has already gained significant traction, generating over C$7.2 million revenue in Q 2020, and is now ready to start scaling revenues as it enters new markets in coming months.Watch PKKFF Next Super Stock livestream video: https://bit.ly/3maNi01October 20 - PKKFF signed an exclusive agreement with the parent company of national consumer electronics distributor Beijing Dianjing Company Ltd. ("BDC") to bring financing solutions to BDC's 60,000 online retail clients.BDC is a wholesale distributor of consumer electronics whose online retail clients sell laptops, smartphones and other consumer electronic products on China's top three e-commerce portals: Tmall, JD.com and Pinduoduo. BDC's clients, who collectively sell about $50B worth of consumer electronics per year, will be able to have up to 90% of the price of the products they purchase from BDC financed. Peak typically earns service fees ranging from 1% to 3% of the value of the credit amounts it helps facilitate, and this represents a total market opportunity of up to $1.35B in annual revenue potential.Click here to join PKKFF NEXT SUPER STOCK livestream October 21: https://bit.ly/2PX0SpHPinduoduo Inc. (NASDAQ: PDD) David Liu, VP Strategy: “Digital Transformation of Agriculture is RMB 1 Trillion Opportunity”“...We have successfully built a user base of nearly 600 million in record time...Our average daily parcel volume accounts for approximately 25% of China's daily parcel shipment. However, in terms of average spending per active buyers, we still see substantial upside potential...We plan to pursue more strategic investment and partnership opportunities that will allow us to accelerate digitization of our supply chain and enhance efficiency and values that could be shared with our consumers. In particular, we started our business in agriculture and we plan to continue our focus in agriculture as our next strategic priority. Agriculture is a sector that touches largest number of people and yet has had the least amount of digitization in the past decade.”“...Total addressable market in 2019 for PBOC agricultural goods sales in China was RMB 8.1 trillion, with less than 7% of these sales taking place online. In contrast, the online penetration for physical goods in total was 23% in 2019....Pinduoduo is already one of the leading e-commerce platforms for agriculture. In 2019, we generated RMB136.4 billion or 13.6% of our GMV from agriculture produce and related goods...Any technology that can improve productivity and efficiency of an agricultural value chain will have a huge impact...We are uniquely positioned to drive trends in China's agriculture system. ..Our aim is to further consolidate our position as China's number one online agriculture platform and to build a worldwide presence in agriculture...We expect to continue gaining market share in agriculture and we see potential for our agriculture GMV to exceed RMB 1 trillion in 5 years.”Pinduoduo Inc. (NASDAQ: PDD) Earnings Call Highlights: https://bit.ly/2FNBmSgWALL STREET REPORTERWall Street Reporter (Est. 1843) is the leading financial news provider, focused on giving investors direct access to CEO's of promising, publicly-traded companies, and market experts. www.WallStreetReporter.comAbout Wall Street Reporter’s Next Super Stock conference:Wall Street Reporter's NEXT SUPER STOCK Live! conference is dedicated to featuring select companies that have near-term catalysts in place which can drive transformational growth (and stock appreciation) in the months ahead. Click here to join next livestream event: https://www.wallstreetreporter.com/next-superstock-online-investor-conference/CONTACT:WALL STREET REPORTER(212) 871-2057 ext 7www.WallStreetReporter.com
The Chinese marketplace might seem like a safe bet on e-commerce growth, but investors should pay attention to these potential downsides.