CEO INSIGHTS – Week Ending 13 July 2018 By NAOS Asset Management

iStock-146052933

“The share bike industry has huge potential, and while there are undeniable set up costs we have a clear path to profitability in Australia” Mina Nada, General Manager, Mobike Australia

As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.

Retail

”We have more than doubled the production of RM boots in Adelaide. We have added a phenomenal number of jobs. We are now actively considering potentially opening a second factory. Not many brands are increasing production locally” Ravi Thakran, Chairman, L Catterton Asia

Australian Economy

“There will be opportunities from BRI [China’s Belt and Road Initiative] — not only for infrastructure but for agriculture and food, for education, and tourism and medical services” Elizabeth Gaines, CEO, Fortescue

Energy

“New coal is a bad idea for New South Wales – coal needs to run most of the time to be economic, but the market needs flexibility, not baseload” Mark Collette, Executive Energy, Energy Australia

“Without increased gas competition from a new source of supply, consumers will need to pay more to keep Queensland gas destined for export here in Australia” AGL Spokesman

Iron Ore

“We don’t think the impact [from the US tariffs] on steel, and therefore demand for our iron ore, will be significant” Elizabeth Gaines, CEO, Fortescue

Platform Providers

“We are excited about the year ahead, with key client wins to accelerate growth. With significant industry forces driving change, particularly in Australia but also across global markets, we are well placed to benefit from the move to transparent and efficient adviser and investment solutions” Michael Ohanessian, CEO, Praemium

Fintech

“Regulators are starting to focus on the operational risks associated with retail payment systems and whether the operators and the participants are meeting appropriately high standards of resilience” Michelle Bullock, Assistant Governor, RBA

Infrastructure Software

“We believe the infrastructure software market in the large part is mature and will consolidate. We think those that will win in that consolidation will be players of scale with operational efficiency because that's what happens in every other industry in the world” Kevin Loosemore, Executive Chairman, Micro Focus

Pets

“10 years ago, China was not a nation of pets, but today has grown to No.3 for pet population. We believe China will overtake the USA and Brazil to become the top pet populated country in three to four years" Ravi Thakran, Chairman, L Catterton Asia

“Revenue across the general practice [veterinary] clinics was below expectations in May and June” National Veterinary Care Market Announcement

Agriculture

“The dry conditions in Qld and northern NSW have curtailed crop protection sales in the third quarter whilst recent rainfall across WA, SA and Tasmania are expected to positively impact rural supplies activity in these markets over the course of the fourth quarter” Ruralco Market Announcement

“Continuing the trend from the first half, a buoyant wool and sheep market and stable cattle volumes in the third quarter have partially offset the impact from decreases in cattle prices” Ruralco Market Announcement

Carbonated Soft Drinks

“We had high single-digit organic revenue growth in Australia. We're encouraged by the momentum we're seeing across many of our key international markets” Indra Nooyi, CEO, PepsiCo

US Economy

“Manufacturing end markets remain stable at high levels, growing 13.3% with sustained strength in most sub-verticals” Holden Lewis, Executive VP and CEO, Fastenal (USA)

Thank you for reading.

Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.

SUBSCRIBE TO OUR NAOS NEWS AND INSIGHTS

Enter your name and email address, then click ‘Submit’