Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened on the market today?

Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. 🏘️ China Property Fears Sting Markets

2. 👶🏻 A Double Upgrade for Baby Bunting

3. 💻 JB Hi-Fi's Revenue Record

4. 🚗 Carsales Revs up Profits

5. 👀 Amazon's Surveillance Saga

The Recap

Driving Success: Carsales Speeds to Record Earnings Post Acquisitions

The ASX200 ended the start of the week down -0.86% to 7,277.0. Carsales was among the winners of earnings season today, rising by 6.9% after reporting an increase of revenue of 18% and underlying profit of 43%.

The big macro story of the day is China's economic recovery being hindered by its worsening property sector, with the Hang Seng dropping 2% on Monday. Property investment is contracting due to a major developer's debt crisis and a decline in housing sales. July Industrial Output and Retail sales to be released tomorrow are expected to show moderate output, sales, and investment increases.

JB Hi-Fi, Aurizon, Bendigo & Adelaide Bank and LendLease Group were just some other companies reporting earnings. Check out our company earnings summary section to see how they all fared.

Lots of red on the screen today, with Materials (-1.74%) and REITs (-1.18%) the worst of the eight sectors that ended the day down. Telco (+0.81%) and Energy (+0.47%) were the best of the three sectors in the green.

Hang onto your hats; tomorrow will see the following companies report: Challenger, Charter Hall Retail REIT, Cochlear, CSL, Deterra Royalties, GUD Holdings, HealthCo Wellness REIT, Life360, SG Fleet, Sims, Temple & Webster, Treasury Wines.

Locally another quiet week for economic data, with wage inflation for Q1 due tomorrow and employment data on Thursday.

ASX200 Stock Snapshot

Economic News

• Britain's economy grew unexpectedly in Q2, setting the stage for more interest rate hikes by the Bank of England, but it has yet to reach its pre-COVID level.

• The U.S Producer Price Index, which tracks the average price change businesses pay suppliers, rose 0.8% annually. Thus was above June’s upwardly revised increase of 0.2% and higher than expectations for a 0.7% gain,

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Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Earnings

Company Earnings Summary

A quick snapshot of the companies who reported earnings today

• Ansell sales fell after a sharp slowdown in demand for single-use gloves in the medical system post a spike during the Covid-19 pandemic.

• Aurizon reported a drop in earnings in a challenging operating environment due to prolonged wet weather. Earnings from coal haulage fell 16%.

• Bendigo & Adelaide Bank - increased cash profits by 15.3% to a record $576.9 million. It increased the full-year dividend to 61c p/s.

• GPT Group - booked investment property valuation declines of $341.3 million, which drove down statutory profit.

Quick Singles

🪃 Local News

• Bank of Queensland announced that Managing Director and CEO Patrick Allaway will continue in his role and that the search process for a new CEO has been discontinued.

• Cooper Energy expects to recognise a non-cash pre-tax impairment of A$20-33 million against the current carrying value of the Casino Henry Netherby cash-generating unit (CGU).

• Starpharma has announced that it has negotiated a commercial settlement agreement with Mundipharma in relation to the VivaGel® BV product. Starpharma will receive a US$4.25M (~A$6.54M) cash payment from Mundipharma.

• SkyCity Entertainment has set aside $45 million for a possible AUSTRAC civil penalty and related legal costs connected to its Adelaide operations.

• Strike Energy is set to expedite the growth of its Perth Basin business by acquiring Talon Energy. As per the agreement, Talon shareholders will receive 0.4828 new Strike shares for each Talon share held. Talon’s board has unanimously recommended the proposed transaction.

• TPG Telecom told the market it would not seek a review of the Australian Competition Tribunal’s determination which affirmed the ACCC’s decision not to authorise the regional network sharing arrangement with Telstra.

🌏 Around The Globe

• Amazon employees WFH a little more than the company would like are being watched. An email went out to some employees who, based on their badge swipes, hadn’t been coming into the office at least three days a week as per company policy.

• Taylor Swift’s Eras tour is expected to become the first tour to hit $1 billion, eclipsing the current record holder, Elton John’s Farewell Yellow Brick Road tour at $900m+.

• X CEO Linda Yaccarino claims that the company is almost breaking even after a loss in advertisers who are slowly returning to the platform.

• Ride-sharing company Lyft wants to end surge pricing, with the CEO saying, “Riders hate it [surge pricing] with a fiery passion.”

• Harsh weather has devastated crops in Florida, Brazil and Mexico, propelling Orange Juice futures to climb to over $3 per pound, a 65% increase from last year.

₿ Crypto Corner

• Bittrex has agreed to pay $24 million to settle charges from the SEC after accusing the bankrupt crypto exchange of operating an illegal securities exchange.

• China plans to crack down on crypto and deep fake AI after a surge in identity theft and digital crimes. The Chinese Ministry of Public Security revealed that there had been 79 cases of fraud involving deep fake AI, such as impersonation via digital face swap, leading to the arrest of 515 individuals.

• According to a financial disclosure released last month, Donald Trump holds between $250,000 - $500,000 of assets in an Ethereum wallet.

• The U.S. Securities and Exchange Commission has delayed its decision on the high-profile spot Bitcoin exchange-traded fund application from ARK 21Shares. The regulator said it needs more time before deciding on the application.

Movers and Shakers

✅ Biggest Gainers

• Baby Bunting (BBN) could be in the early stages of a revival, with the beaten-down stock rising 9.5% today after brokers Morgans and Ord Minnett raised their ratings to an Add and Accumulate, respectively. Both brokers increased their price targets to $2.50 and $2.35.

• Carsales (CAR) was one of the biggest winners of the companies who reported earnings, ending the day up 6.9% to $26.33. The Online vehicle classified advertising group reported a 301% increase to $646 million for FY23, following acquisitions of US-based Trader Interactive and Brazil’s Webmotors. A dividend of 32.5c per share was issued. No FY24 guidance was provided, with the company saying: We expect to deliver very strong growth in Revenue and Adjusted EBITDA and strong growth in Adjusted NPAT in FY24

🔻Biggest Fallers

• Lendlease Group (LLC) dropped by 2.8% after it reported a statutory loss after tax of $232 million for the year ended June 30, mainly due to a $295 million provision because of industry-wide action by the UK government relating to residential buildings. Core operating profit after tax – the group’s measure of underlying earnings – was $257 million for the year, down 7 per cent on the prior year.

• Beach Energy (BPT) reported a 24% decrease in profits for FY23 due to lower domestic gas production and sales, resulting in a drop of 11% in oil equivalent production compared to the previous year. The company forecasts a production of 18.0-21.0 MMboe and a capital expenditure of $850-$1,000 million for FY24. As a result, shares ended down 3.6% to $1.61.

Deep Dive

JB Hi-Fi's Revenue Record
Amidst Profit Dip

JB Hi-Fi reported FY23 earnings today, which were received positively, beating analysts’ estimates, with the share price ending the day 2.75% higher to $48.51. A drop in profit from FY22 meant a cut in the dividend, with the company also adding that sales in FY24 are down Y/Y so far.

Financial Highlights:

• Sales - $9.63 billion, +4.3% vs. FY22, +35.7% vs. pre-Covid

• EBIT - $769.0 million, -3.2% vs. FY22, +106.3% vs. pre-Covid

• NPAT - $524.6 million, -3.7% vs. FY22, +110.0% vs. pre-Covid

Comparable sales were up 4.8%, supported by communications, audio, accessories, games, hardware and services, whilst there was a decline in the movies category. Online sales fell by 20.9% to $940 million, now making up 14.4% of total sales as shoppers return to shopping in retail stores.

Group CEO Terry Smart said, “We are pleased to report record sales and earnings per share for FY23. In a challenging retail environment, we remained top of mind for shoppers and grew our market share by continuing to drive our value offering, leveraging the strength of our multichannel offer and maintaining our high levels of customer service.”

JB Hi-Fi Reports under three key segments:

• JB Hi-Fi Australia: A 5.6% rise in total sales, reaching $6.55 billion. Online sales, however, saw a 20.9% decline but were still up by 264.3% compared to pre-Covid FY19.

• JB Hi-Fi New Zealand: An 11.3% increase in total sales, amounting to NZD292.1 million. Online sales dropped by 25.7% but were up by 141.9% against pre-Covid FY19 figures.

• The Good Guys: A modest 0.8% growth in total sales, totalling $2.81 billion. Online sales decreased by 14.1% but were up by 160.5% compared to pre-Covid FY19.

The total dividend for FY23 was $3.12 p/s, down $0.04 p/s or 1.3%, representing 65% of NPAT. Compared to pre-Covid FY19, the total dividend was up $1.70 p/s or 119.7%. The final dividend will be paid on 8 September 2023.

July Outlook

An early look at the July sales shows mixed results, with the AU business down. However, NZ is tracking higher:

• Total sales growth for JB HI-FI Australia was -1.8%, with comparable sales growth of -2.9%. As compared to pre Covid FY19, total sales growth was 38.7%;

• Total sales growth for JB HI-FI New Zealand was 10.0%, with comparable sales growth of 10.0%. As compared to pre Covid FY19, total sales growth was 27.9%; and

• Total sales growth for The Good Guys was -12.0%, with comparable sales growth of -12.0%. As compared to pre-Covid FY19, total sales growth was 22.0%.

No further guidance was provided for FY24.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of 8th of August

1. Core Lithium (CXO) - 10.88%

2. Flight Centre (FLT) - 10.16%

3. IDP Education (IEL) - 9.38%

4. JB Hi-Fi (JBH) - 8.07%

5. Select Harvest (SHV) - 7.91%

6. Syrah Resources (SYR) - 7.85%

7. Mesoblast (MSB) - 7.55%

8. Pilbara Resources (PLS) - 7.50%

9. Brainchip (BRN) - 7.49%

10. Lake Resources (LKE) - 6.93%

📊Broker Ratings

What do the brokers have to say?

• Coronado Global Resources (CRN) - Upgrade to Accumulate from Hold (Ord Minnett). Target Price $1.70.

• Baby Bunting (BBN) - Upgrade to Add from Hold (Morgans). Target Price $2.50

• Baby Bunting (BBN) - Upgrade to Accumulate from Hold (Ord Minnett). Target Price $2.35

• Nick Scali (NCK) - Upgrade to Buy from Neutral (Citi). Target Price $14.35

📅 Economic Calendar

Data to keep an eye on this week

Reader Review

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.