🇨🇳 Adidas loses China

Adidas had a rough time of it last year | And Cathay Pacific did too | [TOGETHER WITH]( Hi {NAME}, here's what you need to know for March 10th in 3:08 minutes. 🤑 You don’t often get a chance to invest like a venture capitalist. Time to change that: join HoaQ’s Joe Kinvi for [The Pros And Cons Of Syndicate Investing]( on Monday, and find out how you can go toe to toe with the world’s biggest institutions. [Get your free ticket]( Today's big stories - Adidas posted worse-than-expected results, but it’s looking forward to this year - The oil crisis might not be the boon for the electric vehicle market that you think it is – [Read Now]( - Cathay Pacific reported another full-year loss for 2021 Positive Energy [Positive Energy] What’s Going On Here? Adidas [posted]( weaker-than-expected full-year results on Wednesday, but the sportswear giant is still feeling pumped about the year ahead. What Does This Mean? Like most companies, Adidas was up against pandemic-induced shortages and supply chain issues last year. But unlike most companies, it also had to deal with a [boycott]( of its goods in China – a market that makes up over a fifth of its sales. That’s a dastardly combination, and it added up to about $1.7 billion in lost revenue over the course of 2021. That might be why its total sales only climbed 16% last year – short of the 18% it was hoping for. And now that Adidas has stopped selling in Russia, it reckons it’ll sacrifice some growth this year too. Not that the revelation seemed to knock its confidence: Adidas’s revenue outlook for 2022 was still much better than analysts were expecting. Why Should I Care? Zooming in: Adidas goes local. Adidas’s Chinese sales grew just 3% last year, as customers turned to local brands like Anta Sports and Li Ning instead. That seems to be part of a wider trend: a handful of China’s top sneaker brands collectively grew their revenue by 17% last year, while foreign rivals saw theirs shrink by 24%. Still, at least Adidas can tap into some local know-how going forward: it just hired a new head of Chinese operations with a track record of boosting brands in the region. The bigger picture: Lululemon’s stepping it up. Footwear has always made up a big part of Adidas’s sales, but it’s facing new competition on that front: Lululemon [announced]( earlier this week that it’s launching its first sneaker – a running shoe for women – later this month ([tweet this](). The athleisure brand is planning to expand into men’s sneakers next year, and analysts seem to agree that it could be a smart way to gain ground on the sportswear giants. You might also like: [How to analyze Adidas’ stock in under two hours.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Positive Energy&utm_campaign=daily-global-10-03-2022&utm_source=email) Analyst Take What Investors Are Getting Wrong About The EV Market [What Investors Are Getting Wrong About The EV Market]( [Photo of Reda] Reda, Analyst What’s Going On Here? The conflict in Ukraine sent the price of oil to a [14-year high]( earlier this week. And that’s led plenty of investors to conclude that surging oil prices will cause prices at the gas pump to rise, which should incentivize more people to switch to [electric vehicles]( (EVs). So far, so obvious. But if you’re what Howard Marks calls a [“second-level thinker”](, you’ll see past this conclusion and realize that there might be [more factors working against EVs]( than in their favor. That’s today’s Insight: [what investors are getting wrong about the EV market](, and why you should be wary. [Read or listen to the Insight here]( SPONSORED BY NEXO Unlock the power of your crypto If you’ve not come across [Nexo’s crypto lending and exchange platform]( before, the numbers tell you everything you need to know. 30+: The number of cryptocurrencies you can [buy, sell, or swap]( – from bitcoin to polkadot. 20%: The yearly interest you can [earn on your crypto](, paid out daily. 30+: The number of cryptocurrencies you can use as collateral when you [borrow with Nexo](. $12 billion: The [total value of assets]( managed by Nexo. 3.5 million: The number of [Nexo users]( around the world. $375 million: The amount Nexo is insured for on all the assets it takes care of. $100: The welcome bonus you can get if you [open your account]( by March 31st. [Get Your Bonus]( Isolation Vacation [Isolation Vacation] What’s Going On Here? Cathay Pacific [reported]( a full-year loss on Wednesday, and the Hong Kong airline will need some seriously dedicated passengers if it plans to turn that around. What Does This Mean? All credit to Cathay: the carrier rolled out a successful cost-cutting program last year, and its frequent cargo flights proved a lucrative alternative to passenger services. That helped the company turn a profit in the second half of the year, even as it flew 85% fewer passengers than it did in 2020. But the company still made a $700 million loss, which came as a bitter pill to swallow after a $2.8 billion shortfall the year before. This one’s not off to a great start either: the Hong Kong government has introduced flight bans now that Covid cases are on the rise again, as well as mandatory post-flight quarantines. That means Cathay is now only flying about 2% of the passengers it flew before the pandemic, and it’s expecting to lose up to $200 million a month until those restrictions are lifted. Why Should I Care? Zooming in: Freight-eningly expensive. Cathay made about 79% of its revenue from flying cargo last year, so it reckons more of those flights could be the way to balance out those losses. It might be onto something: European airlines have been avoiding Russian airspace since the country’s invasion of Ukraine, pushing up the cost of flying air freight between China and northern Europe by 34%. The bigger picture: Flights over troubled waters. As if the pandemic wasn’t enough, now airlines have been hit with [spiking]( oil prices – no small thing considering fuel makes up as much as 35% of their operating costs. But Cathay thought ahead: it’s already [locked in]( all of its fuel costs for this quarter and half of next quarter’s too. It’s also one of the few airlines still flying in Russian airspace, meaning it has shorter flight times and lower fuel bills than its more principled rivals. You might also like: [Will higher-for-longer energy prices bleed us all dry too?]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Isolation Vacation&utm_campaign=daily-global-10-03-2022&utm_source=email) 💬 Quote of the day “I attribute my success to this: I never gave or took any excuse.” – Florence Nightingale (an English social reformer, statistician, and the founder of modern nursing) [Tweet this]( SPONSORED BY NEXO Show volatility who’s boss You can’t beat volatility, but you can outsmart it. With [Nexo’s]( industry-leading Earn, you’ll turn your idle crypto assets into a reliable stream of income, no matter what ups and downs are going on in the wider market. 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