Reckitt to sell a business in China but still loves the emerging markets. Chris Bailey writes...

Kefi – Victory for Tom Winnifrith & PL as executive greed gravy train sent into reverse. Read HERE

Back in late April I observed that the multinational consumer goods company Reckitt (RKT) saw ‘raised hygiene habits’ and hence had ‘confidence in long term growth’. This helped keep me positive about the share with a seventy-five quid share price target, equivalent to a fifteen percent share price appreciation potential even before you factor in a solid dividend yield. So what to make of an announcement now that the company is to ‘sell its infant formula business in China for US$2.2 billion’?

SHOCKING: Remote Monitored Systems shows that on the AIM Sewer it's one free money rule for the spivs and another for the rest of us. Read from The Sheriff of AIM HERE

Well the first observation is that technically it came on Saturday and was no great surprise given that I had noted back in late April that the company was planning this. As it happens it will retain an 8% stake in the Infant Formula and Child Nutrition (IFCN) business of China, which will now be predominately owned by Primavera Capital Group, describing itself as ‘a leading China-based investment firm, focusing on private equity and special situations opportunities’. Yes, smell the potential to be loved by the government in Beijing. The world of Chinese infant and child demand is evolving. As you may have read the other week, the Seventh National Population Census may have shown a modest proportional increase in those aged up to fourteen years old...but also a much bigger proportional increase in those aged above sixty. Give it less than ten years and patently China will overtly see an ageing population, even if young adults there can now have three children if they like. Anyhow you can certainly debate whether medium-term it is wise or not to buy such a business.

Itaconix – just how soon did this Woodford dog need balance sheet improvement? Read HERE

It managed sales in the year to the end of 2020 of £3.4 billion in China (and £5.4 billion to the US and rest of the world). Either way, as a result of the sale, Reckitt ‘expects to incur a net loss of around £2.5 billion principally relating to the re-evaluation of goodwill and intangible assets for IFCN China’. Elsewhere though the company expects to ‘incur cash tax costs of around £300 million and transaction and other costs of around £200 million’, but the fact that the deal is happening itself means that the net debt/adjusted EBITDA ratio is set to fall 0.2x to 2.2x. That’s why the shares are up a tad.

Longboat Energy is likely to be a popular oil explorer after completion of its farm in deals says Gary Newman HERE

Frankly Reckitt has far bigger interests out there across multiple emerging markets, including China. Back in April for example I noted that ‘it sees more cough/cold (health business) and Durex sale improvement as more economies open up’ among other angles. This is why I own the stock and see it as a good value FTSE-100 play. As many consumer and/or medical companies are working out, demand and profits are progressively best coming from the ageing population in all countries around the world. Continue to BUY Reckitt shares.

Life remains far from easy for SSP Group. Read more from Chris Bailey HERE

Filed under: Reckitt, Kefi, Remote Monitored Systems, Itaconix, Longboat Energy, SSP Group

Tandem Group - positive interims & outlook...

09/24/2021

PZ Cussons - a bad day Buy suggests Chris Bailey...

09/23/2021

Touchstar - interims & expects full-year ahead of expectations, Buy says HotStockRockets...

09/22/2021

Kier Group will undoubtedly like more government spending says Chris Bailey...

09/21/2021

Jadestone Energy - interims, production and cash flow growth to come...

09/20/2021

B.P. Marsh & Partners - half-year trading update, reasons for confidence...

09/17/2021

AltynGold - interims, results of capex look promising...

09/16/2021

Horizonte Minerals - project funding nearing a conclusion. Buy says Gary Newman...

09/15/2021

Wishbone Gold - further step to exploration progress. An update from HotStockRockets...

09/14/2021

Gold & Bluebird Merchant Ventures a buy? Nigel Somerville writes...

09/13/2021

Asiamet Resources - drilling update highlights further potential, Buy...

09/10/2021

CMC Markets - buy the recent weakness? Gary Newman reviews...

09/09/2021

Still a Headlam lover post its first half numbers says Chris Bailey

09/08/2021

EnQuest - interims, some production disappointment but still clear value potential?...

09/07/2021

Jadestone Energy - long-term attractions from this successful share tip?...

09/06/2021

Essentra - further recovery upside...

09/03/2021

Barclays - acquisition news. Still two quid & out? Chris Bailey reviews...

09/02/2021

Polymetal - value & growth potential? Gary Newman writes...

09/01/2021

Kefi Gold & Copper - more positive news considers HotStockRockets...

08/31/2021

Kefi Gold & Copper - Tulu Kapi funding update. Positive but how much?...

08/27/2021

Touchstone Exploration - Q2 update, remains a Buy says HotStockRockets...

08/26/2021

Anglo Asian Mining - Zafar maiden JORC Mineral Resource adds to potential

08/25/2021

Ibstock - based on broader issues than the Sunday press suggested, but a buy says Chris Bailey

08/24/2021

SkinBioTherapeutics - Business Update, high margin profit potential moving closer...

08/23/2021

OptiBiotix Health - extends Seed Health territories. Strong Buy...

08/20/2021

Jubilee Metals - positive production and prices says Gary Newman...

08/19/2021

BP - Q2 2021 results, creating value now & for the future?...

08/18/2021

When the FTSE 100 dumps next, have a look at Prudential says Chris Bailey

08/17/2021

Empresaria - longer-term upside, but what about the short-term? A review from HotStockRockets...

08/16/2021

Seed Innovations - a buy again? A review from HotStockRockets...

08/13/2021

Ariana Resources - more drilling results & time to buy more? Nigel Somerville writes...

08/12/2021

Still a Rolls-Royce believer says Chris Bailey...

08/11/2021

Gold and gold stocks - what is ahead? Nigel Somerville reviews...

08/10/2021

OptiBiotix Health - shares up on trading & commercial update, much further to go...

08/09/2021

Impellam - half-year recovery but more to come...

08/06/2021

Empresaria - half-year trading update, recovery building says HotStockRockets

08/05/2021

Johnson Matthey - still excited about prospects writes Chris Bailey...

08/04/2021

Rio Tinto - the story remains so much more than just cultural heritage says Chris Bailey

08/03/2021

Metals Exploration - Q2 challenges but a better outlook considers HotStockRockets

08/02/2021

Castillo Copper - further copper intersections & visible mineralisation, Buy

07/30/2021

British American Tobacco shares continue to offer attractive total return hopes says Chris Bailey

07/29/2021

Reckitt - recent share price decline too severe? Chris Bailey reviews...

07/28/2021

Centamin - remains a buy following Q2 report says Nigel Somerville

07/27/2021

Union Jack Oil - West Newton update, clear upcoming catalysts...

07/26/2021

Bluebird Merchant Ventures - operational update shows progress is being made, Buy...

07/23/2021

Saga offers interesting exposure to the travel industry bouncing back considers Gary Newman

07/22/2021

easyJet - ten quid or more share price again by the end of the year? Chris Bailey writes...

07/21/2021

Headlam Group - a recovery buy?...

07/20/2021

Burberry - chav challenges? Chris Bailey reviews...

07/19/2021

Orcadian Energy - a newly-listed AIM oiler Buy suggests Peter Brailey...

07/16/2021

Kosmos Energy - production & share price upside potential says Gary Newman...

07/15/2021

Cairn Energy - a lot to like at this price? Gary Newman reviews...

07/14/2021

DS Smith - further recovery & structural growth potential following full-year results?...

07/13/2021

GlaxoSmithKline - a recovery buy...

07/12/2021

Wm Morrison - recommended offer, but is there still more to come?

07/09/2021

Pick and choose your stocks - and if you need to houses - carefully says Chris Bailey...

07/08/2021

After Wm Morrison, J Sainsbury next? Chris Bailey writes...

07/07/2021

I3 Energy has turned things around - plenty of further potential considers Gary Newman...

07/06/2021

AEX Gold - Nalunaq and exploration update, Buy...

07/05/2021

Impellam Group - a recovery buy suggest Tom Winnifrith & Steve Moore...

07/02/2021

MyHealthChecked - acquisition, building a business of sustainable scale?...

07/01/2021

Burberry CEO deciding to leave a problem? Chris Bailey reviews...

06/30/2021

GlaxoSmithKline - a buy despite the unexcitable CEO? Chris Bailey writes...

06/29/2021

Kefi Gold & Copper - Ethiopia election operational update, Buy...

06/28/2021

Kier - open offer result following subsidiary sale, recovery buy?...

06/25/2021

Ariana Resources - more very positive drilling results. Buy says Nigel Somerville...

06/24/2021

DS Smith - strange name but a great company says Chris Bailey...

06/23/2021

Horizonte Minerals - short-term delay largely irrelevant. Buy says Gary Newman...

06/22/2021

Empresaria - a summer of positive macro-economic tailwinds ahead? From HotStockRockets...

06/21/2021

Pharos Energy - oil discovery and further potential catalysts says HotStockRockets...

06/18/2021

B.P. Marsh & Partners - full-year results, recovery opportunities...

06/17/2021

Serica Energy - plenty to make me think that it will continue to do very well says Gary Newman

06/16/2021

EnQuest - new debt facility, recovery buy says HotStockRockets

06/15/2021

Kefi Gold & Copper - still a risk-reward buy following executive bonus plan victory for investors...

06/14/2021

Asiamet Resources - progressing several key workstreams. Buy says HotStockRockets...

06/11/2021

British American Tobacco - positive pre-close update. Remains a Buy says Chris Bailey...

06/10/2021

Reckitt to sell a business in China but still loves the emerging markets. Chris Bailey writes...

06/09/2021

Bushveld Minerals - vanadium about to enter an up-cycle? Gary Newman writes...

06/08/2021

Anglo Asian Mining - how pleasing and exciting the results announcement?...

06/07/2021

SkinBioTherapeutics - positive study results, still multi-bagger potential?...

06/04/2021

With a new team in place Afentra is a buy says Gary Newman

06/03/2021

Still excited about prospects for Johnson Matthey says Chris Bailey...

06/02/2021

Central Asia Metals - a buy? A review by HotStockRockets...

06/01/2021

Predator Oil & Gas - Morocco and Trinidad updates, more to come from this great share tip?...

05/28/2021

Playtech - good sale & a sensible update. Still undervalued suggests Chris Bailey...

05/27/2021

Smiths Group - CEO change, will the next change be to split the business?

05/26/2021

Biffa loves more waste and more recycling says Chris Bailey...

05/25/2021

Red Rock Resources - Elephant Oil and Juno Minerals investee updates, remains a Strong Buy...

05/24/2021

Power Metal Resources - news flow helps shares, more to come. From HotStockRockets...

05/21/2021

DCC - a compelling medium-term buy suggests Chris Bailey...

05/20/2021

Ariana Resources - more drilling results bode well for Kiziltepe, Buy says Nigel Somerville...

05/19/2021

Sage Group is still a friend of mine says Chris Bailey...

05/18/2021

Touchstone Exploration - Q1 results, an upcoming potential catalysts buy says HotStockRockets

05/17/2021

Predator Oil & Gas - as MOU-1 drilling excitement builds an update from HotStockRockets

05/14/2021

Bacanora Lithium - a buy at a big discount to the possible cash offer price? Gary Newman writes...

05/13/2021

Morrisons is still rudely unloved. A Buy says Chris Bailey...

05/12/2021

Panther Metals - Oz update. Targeting 25p says Nigel Somerville...

05/11/2021

Jadestone Energy - a pleased to announce Malaysia acquisition. We can understand why...

05/10/2021

J Sainsbury - full year results, still income value?...

05/07/2021

Sell in May? Some stocks Yes, gold No, argues Nigel Somerville...

05/06/2021

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