Stocks’ Details

Scentre Group (ASX: SCG)

Scope of growth for in-store specialty sales - Scentre Group, whose strategy is to own pre-eminent retail property portfolio in Australia and in New Zealand, is extremely well-placed for future growth. SCG has recently cancelled 5,760,128 shares for buy-back. The Group confirmed its guidance for full-year growth in funds from operations (FFO) of approximately 4 per cent and also confirmed a distribution guidance of 22.16 cents per security. It was noted that total specialty in-store sales were up by 2.0 per cent for the quarter ending on 31 March 2018 and by 1.4 per cent for the year ending on 31 March 2018 as compared to previous year. Total stable portfolio sales were up by 1.1 per cent for the quarter as well as for the year ending on 31 March 2018. It commenced the redevelopment of NZ$790 million for Westfield Newmarket in 2018. The Group successfully opened the $80 million of redevelopment of Westfield Plenty Valley in March 2018 and 100 per cent of it was leased. All of its active developments are progressing well.


Retailer in-store sales Growth Trend (Source: Company Reports)

The REIT is expected to get support from population growth, employment growth, and household cashflows. The Group believes in creating extraordinary places, connecting and enriching communities. Currently, the group has a dividend yield of 5.15 per cent and this is expected to grow in the coming months. The share prices climbed up by 7.65 per cent in last three months and were up by 2.18 per cent in last one month. It is expected that the in-stores specialty sales will see a lift from employment growth, better household cash flow and population growth. By looking at the positive market sentiments and current retail landscape, we recommend to “Buy” the stock at the current market price of $4.23.
 

Treasury Wine Estates Limited (ASX: TWE)

Challenges related to supply issues in China - Treasury Wine is an approved Trusted Trader by the Australian Border Force (Customs) and is recognised by GACC.It confirmed that it is comfortable with the sustainability of its operating model in China, to build a portfolio of brands, and working on its disciplined approach to manage the inventory levels with its customers. This approach supports its growth in North Asia. TWE actively monitors shipments, depletions and stock levels of its retail and distributor partners. It respects and corporates with authorities and relevant agencies in China to meet all regulatory requirements. The Company reaps benefits from its global operating model and it can allocate Luxury wines across regions, channels and fiscal years. This reflects that brand scarcity is preserved and Luxury wine will be benefited from further maturation. The Board is focussed on executing and embedding important route-to-market changes in the United States with simultaneously deriving positive earnings momentum in ANZ, Asia and Europe. It was noted that the Group was facing challenges in terms of supply, particularly, in China.Recently Artisan Partners Asset Management Inc (APAM) ceased to be the substantial holder of the Group since 30 May 2018.The stock has been down by 3.29 per cent in last one month owing to the latest challenges but recovered in last five days and climbed up by 2.6 per cent as at 12 June 2018. The stock can be avoided as of now at the current market price of $17.22 by looking at the prevailing supply issues and lack of potential catalysts.


EBITS Contribution for 1HFY18 (Source: Company Reports)

 
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