This Week at InvestKaki:

• 🫠 Lululemon taking a hit?

• 🚗 BYD in trouble in the Middle Kingdom

• 😉 Alibaba continues to dominate

• 🏦 Demerger Explained

• 📢 Spotlight on Macy's

Moving on, here are the news that shocked the world…

Lululemon $LULU ( ▼ 18.58% ) : Is Lululemon going delulu? Share price plunged despite financial results meeting expectations as it warns of tariffs and the removal of de minimis expectations [Read More]

Kraft-Heinz $KHC ( ▲ 1.22% )  : Kraft Heinz is splitting … into two companies. One will sell shelf-stable meals such as Heinz, Philadelphia and Kraft mac and cheese. The other will sell North American staples such as Oscar Mayer, Kraft singles and Lunchables [Read More]

Alphabet $GOOG ( ▲ 1.08% )  : Alphabet win? Seems like it doesn’t need to sell its Chrome browser or its Android operating system after all [Read More]

Macy $M ( ▲ 0.52% )  : Best results in 3 years! Macy’s turnaround has yielded results as it flipped back into expansion. However, it’s warning also of tariffs. [Read More]

Caterpillar $CAT ( ▲ 0.68% )  : It ran, but it might have to crawl now. Caterpillar is warning that tariffs are hitting its bottomline, and expects a US$1.8 billion impact this year. [Read More]

Here are the news covering the Asia market…

BYD: BYD is hitting a snag on the road. Reportedly, it has cut its sales target by 16% as it faces intense competition at home and regulator scrutiny [Read More]

ComforDelGro: ComforDelGro has fully acquired CityCab’s remaining shares from ST Engineering for $116.3 million [Read More]

Boustead REIT: Boustead Singapore has submitted its application to list a REIT in both the Singaporean and Malaysian markets, managed by UIIB Holdings [Read More]

ST Engineering: $250 million! That’s how much ST Engineering is spending on its Artificial Intelligence program [Read More]

STI Reserve List: Olam Group and Yang Zijiang Financial have replaced CapitaLand Ascott and ComfortDelGro on the STI Reserve List [Read More]

See below for our handpicked analyst reports:

What do you call the opposite of a merger?

Demerger.

An odd word but we will go with it.

You might have heard one of Warren Buffett’s crown jewel company, Kraft Heinz, splitting into two different companies.

Back in 2015, Buffett masterminded the US$46 billion merger of Kraft and Heinz. And 10 years later, the company is only worth US$30 billion now.

It was a rare mistake.

So what is demerging or splitting?

It is the process of separating different business units in a company into their own standalone companies.

Typically, you merge to grab market share by becoming a bigger player.

But you demerge to ‘unlock’ hidden value in the company. When a company gets too big (in this case Kraft Heinz), it also gets more complicated and complex.

Sometimes, investors don’t like this and hence, give a lower value to the company.

By splitting, investors now get a better view of the business units separately and are able to appreciate the value that they offer.

Let’s hope that Kraft Heinz gets a higher valuation with two separate companies now.

Is Macy’s turnaround here?

For the first time in 3 years, Macy’s recorded a positive growth in its same-store sales - an important milestone in its turnaround story.

“A Bold New Chapter”

I am not kidding, that’s how CEO Tony Spring marketed Macy’s turnaround plan back in February 2024.

It consists of

• Closing 150 locations.

• Opening more small-format stores

• Concentrate on luxury brands and lines

Closing 150 stores is a deeply unpopular move. It involves people losing jobs and livelihood, and decimations of small towns and neighborhood.

But capitalism is brutal.

For the full year 2024, it managed to increased its profits to US$582 million from a small profit of US$45 million in 2023.

However, Macy’s revenue has continued to decline in the latest quarter (2Q 2025: -1.9%), with 10 consecutives quarters of declining revenue.

Is this the turning point of the turnaround?

Or is this the calm before the storm?

Hope the above is fruitful for you all..

Cheers,
James Yeo