Connect with us

News

Wall Street’s plant-based love wilts

Published

 on

By Siddharth Cavale and Uday Sampath Kumar

(Reuters) – A cooling of the U.S. stock market’s taste for plant-based meat makers has raised doubts among some investors and analysts about Impossible Foods’ plans to achieve a $10 billion flotation.

Impossible is seeking to go public through an initial public offering or via a merger with a blank-check company within the next 12 months, sources told Reuters this month.

The market value of larger competitor Beyond Meat, however, has sunk from a peak of $14 billion to closer to $8.5 billion and is predicted by several brokerages to fall further.

Both firms carry expectations of being big players in a so-called faux meat market which some predict could be worth $85 billion a year by 2030 as dietary habits shift.

But with retail sales of some products sliding, four sectoral investors told Reuters that Beyond’s 420% rise in value since listing in September 2019 was now seen as overcooked.

“It’s pretty shocking when you see some of these valuations come out,” said Patrick Morris, whose Eat Beyond vehicle has invested in three Canada-listed plant-based ventures.

“The $10 billion for Impossible Foods, with Beyond Meat at $8 or $8.5 billion? The first reaction is that these valuations are coming from outer space,” added Morris, who said he is looking at investing in Impossible if it opens its books.

Some existing investors have told Impossible that it should aim to go public at a valuation below where Beyond is trading, a person familiar with the discussions told Reuters.

Impossible declined to comment.

BIG DEALS

While the signs remain positive for plant-based food, COVID-19 has halted restaurant sales, and sector studies suggest that the industry has yet to convincingly win over shoppers.

Nevertheless, both Beyond and Impossible have signed deals with major restaurant and grocery chains and the U.S. industry as a whole grew by 44% last year during the pandemic.

Revenues at Beyond and some other producers are growing, but the rate of volume sales growth of fresh and fully cooked plant-based meat alternatives has been declining steadily at U.S. retail stores since July last year, NielsenIQ data shows.

Unit sales growth eased from 32.6% in the July to September period last year to 1% in January to March quarter of 2021, when compared to the same period a year ago, the data showed.

Beyond’s sales overall were still just $407 million last year, and its stock trades at nearly 21 times sales per share, according to Refinitiv data, versus 1.6 times and 1.9 times for Kellogg Co and Kraft Heinz, which last year had sales of $13.78 billion and $26.19 billion respectively.

“Food companies need to trade in a multiple that has some logic to it,” said Christopher Kerr, Chief Investment Officer at Unovis Asset Management, an early investor in Beyond Meat who cashed out and now holds stakes in Oatly and Zero Egg.

“The question is can they get to something that represents market valuation tied to revenues … right now we’re seeing some pretty premium valuations out there,” Kerr added.

 

Graphic: Beyond Meat market cap – https://fingfx.thomsonreuters.com/gfx/buzz/jznpnandjvl/Beyond%20market%20cap.PNG

 

SPAC BOOM

One reason for the valuation floated for Impossible is the boom in special-purpose acquisition deals and initial offerings that has seen big jumps for a range of start-ups at launch.

Brian Schaeffer, managing director of private equity trading platform InvestX, which allows investors to trade in pre-IPO companies, said Impossible had been one of the top five traded stocks on the platform since introducing it this year.

“The SPAC trend is super aggressive right now …so those kind of public valuations are being translated into interest on the private platforms,” Schaeffer added.

Some market debuts, however, have not gone as well.

British-based food delivery service Deliveroo flopped on its debut last month.

While Impossible does not publish sales numbers, some industry estimates give it a less than 4% share of the U.S. imitation meat industry, compared with Beyond Meat’s 25%.

Beyond has signed deals with McDonald’s, PepsiCo and KFC and Taco Bell owner Yum Brands while Impossible last year gave up on McDonald’s, citing its inability to supply on the required scale.

Impossible’s burgers and sausages are available at only 20,000 stores globally, versus Beyond’s 122,000 and it is still seeking regulatory approval in Europe and mainland China, where the genetically modified yeast it uses is banned.

“There is so much money (from SPACs) looking for so few places to go, because the space is so new,” Curt Albright, managing member of alternative protein investment firm Clear Current Capital said.

“Whether the valuations are too much or too little, that the market will figure out eventually.”

 

(Reporting by Siddharth Cavale and Uday Sampath Kumar in Bengaluru; Editing by Patrick Graham and Alexander Smith)

Continue Reading

News

China to release results of once-in-a-decade census on May 11

Published

 on

China is expected to release the results of its once-in-a-decade census conducted late last year on May 11, according to a notice from the State Council Information Office.

Officials from the census and statistics bureaus will brief the media on the census results on May 11, the State Council Information Office said in a notice on Sunday.

The National Bureau of Statistics said previously that the results would be released at a media briefing scheduled for early April. It later said the announcement had been delayed, as more preparatory work needed to be done.

 

(Reporting by Ryan Woo, Hallie Gu and Xiao Han; Editing by Himani Sarkar)

Continue Reading

News

Afghan school blast toll rises to 58, families bury victims

Published

 on

The death toll from an explosion outside a school in Afghanistan’s capital Kabul has risen to 58, Afghan officials said on Sunday, with doctors struggling to provide medical care to at least 150 injured.

The bombing on Saturday evening shook the city’s Shi’ite Muslim neighbourhood of Dasht-e-Barchi. The community, a religious minority in Afghanistan, has been targeted in the past by Islamic State militants, a Sunni militant group.

An eyewitness told Reuters all but seven or eight of the victims were schoolgirls going home after finishing studies.

Afghan President Ashraf Ghani on Saturday blamed the attack on Taliban insurgents but a spokesman for the Taliban denied involvement, saying the group condemns any attacks on Afghan civilians.

Families of the victims blamed the Afghan government and Western powers for failing to put an end to violence and the ongoing war.

Bodies were still being collected from morgues as the first burials were conducted in the west of the city. Some families were still searching for missing relatives on Sunday, gathering outside hospitals to read names posted on the walls, and checking morgues.

“The entire night we carried bodies of young girls and boys to a graveyard and prayed for everyone wounded in the attack,” said Mohammed Reza Ali, who has been helping families of the victims at a private hospital.

“Why not just kill all of us to put and end to this war?” he said.

The violence comes a week after remaining U.S. and NATO troops began exiting Afghanistan, with a mission to complete the drawdown by September 11, which will mark the end of America’s longest war.

But the foreign troop withdrawal has led a surge in fighting between Afghan security forces and Taliban insurgents with both sides trying to retain control over strategic centres.

(Reporting by Kabul bureau, Editing by Raju Gopalakrishnan)

Continue Reading

News

Chinese rocket debris lands in Indian Ocean, draws criticism from NASA

Published

 on

By Ryan Woo

BEIJING (Reuters) -Remnants of China’s biggest rocket landed in the Indian Ocean on Sunday, with most of its components destroyed upon re-entry into the atmosphere, ending days of speculation over where the debris would hit but drawing U.S. criticism over lack of transparency.

The coordinates given by Chinese state media, citing the China Manned Space Engineering Office, put the point of impact in the ocean, west of the Maldives archipelago.

Debris from the Long March 5B has had some people looking warily skyward since it blasted off from China’s Hainan island on April 29, but the China Manned Space Engineering Office said most of the debris was burnt up in the atmosphere.

State media reported parts of the rocket re-entered the atmosphere at 10:24 a.m. Beijing time (0224 GMT) and landed at a location with the coordinates of longitude 72.47 degrees east and latitude 2.65 degrees north.

The U.S. Space command confirmed the re-entry of the rocket over the Arabian Peninsula, but said it was unknown if the debris impacted land or water.

“The exact location of the impact and the span of debris, both of which are unknown at this time, will not be released by U.S. Space Command,” it said in a statement on its website.

The Long March was the second deployment of the 5B variant since its maiden flight in May 2020. Last year, pieces from the first Long March 5B fell on Ivory Coast, damaging several buildings. No injuries were reported.

“Spacefaring nations must minimize the risks to people and property on Earth of re-entries of space objects and maximize transparency regarding those operations,” NASA Administrator Bill Nelson, a former senator and astronaut who was picked for the role in March, said in a statement after the re-entry.

“It is clear that China is failing to meet responsible standards regarding their space debris.”

ANXIETY OVER POTENTIAL DEBRIS ZONE

With most of the Earth’s surface covered by water, the odds of populated area on land being hit had been low, and the likelihood of injuries even lower, according to experts.

But uncertainty over the rocket’s orbital decay and China’s failure to issue stronger reassurances in the run-up to the re-entry fuelled anxiety.

“It is critical that China and all spacefaring nations and commercial entities act responsibly and transparently in space to ensure the safety, stability, security, and long-term sustainability of outer space activities,” Nelson said.

Harvard-based astrophysicist Jonathan McDowell told Reuters that the potential debris zone could have been as far north as New York, Madrid or Beijing, and as far south as southern Chile and Wellington, New Zealand.

Since large chunks of the NASA space station Skylab fell from orbit in July 1979 and landed in Australia, most countries have sought to avoid such uncontrolled re-entries through their spacecraft design, McDowell said.

“It makes the Chinese rocket designers look lazy that they didn’t address this,” said McDowell.

The Global Times, a Chinese tabloid, dismissed as “Western hype” concerns the rocket was “out of control” and could cause damage.

“It is common practice across the world for upper stages of rockets to burn up while reentering the atmosphere,” Wang Wenbin, a spokesman at China’s foreign ministry, said at a regular media briefing on May 7.

“To my knowledge, the upper stage of this rocket has been deactivated, which means most of its parts will burn up upon re-entry, making the likelihood of damage to aviation or ground facilities and activities extremely low,” Wang said at the time.

The rocket, which put into orbit an unmanned Tianhe module containing what will become living quarters for three crew on a permanent Chinese space station, will be followed by 10 more missions to complete the station by 2022.

(Reporting by Ryan Woo, Hallie Gu and Xiao Han in Beijing and Peter Szekely in New York; Editing by Himani Sarkar & Simon Cameron-Moore)

Continue Reading

Trending