1 00:00:05,160 --> 00:00:07,680 Speaker 1: This is what the Flux I'm Brett and aren't Justin 2 00:00:07,800 --> 00:00:10,080 Speaker 1: and it's Friday, the twenty seventh of March doesy boy. 3 00:00:10,119 --> 00:00:12,240 Speaker 2: It might not feel like it when you open the news, 4 00:00:12,240 --> 00:00:15,200 Speaker 2: but Australians have actually gotten richer. According to the ABS, 5 00:00:15,200 --> 00:00:17,639 Speaker 2: total household wealth increase two and a half percent. The 6 00:00:17,680 --> 00:00:20,720 Speaker 2: main driver here that was good old residential property doing 7 00:00:20,720 --> 00:00:23,480 Speaker 2: the heavy lifting once again and superannuation coming in its 8 00:00:23,520 --> 00:00:25,800 Speaker 2: second place. But here is the catch. These figures are 9 00:00:25,800 --> 00:00:28,880 Speaker 2: from December last year and I've only just been released now, 10 00:00:29,040 --> 00:00:32,560 Speaker 2: so yes, we were richer. The real question is whether 11 00:00:32,600 --> 00:00:33,680 Speaker 2: that still holds up today. 12 00:00:34,159 --> 00:00:36,440 Speaker 1: Flux Dam We are back once again this Friday with 13 00:00:36,520 --> 00:00:39,400 Speaker 1: quick sticks, giving away fifty dollars to the smartest person 14 00:00:39,440 --> 00:00:41,920 Speaker 1: in the Flux community who adds US three business questions 15 00:00:41,920 --> 00:00:44,519 Speaker 1: as quickly as they possibly can when they receive the notification. 16 00:00:44,640 --> 00:00:45,879 Speaker 1: So if you were to win the start up your 17 00:00:45,880 --> 00:00:47,720 Speaker 1: weekend on a high, make sure to download the Flux 18 00:00:47,760 --> 00:00:50,360 Speaker 1: app have your notifications turned on your chance to win. 19 00:00:50,320 --> 00:00:53,000 Speaker 2: Three massive stories today. Juzy boy, let's do it for 20 00:00:53,200 --> 00:00:55,959 Speaker 2: our first Quantus could see profits dropped by around five 21 00:00:56,040 --> 00:00:59,000 Speaker 2: hundred million bucks as it struggles to balance its flights 22 00:00:59,040 --> 00:01:00,600 Speaker 2: and huge spike in prices. 23 00:01:00,600 --> 00:01:03,600 Speaker 1: Nothing like a geopolitical conflict to send airline profits into 24 00:01:03,640 --> 00:01:05,800 Speaker 1: a tailspin, Bman, So tell me more so. 25 00:01:05,840 --> 00:01:08,600 Speaker 2: Obviously, Quantus is Australia's large airline. It's been able to 26 00:01:08,640 --> 00:01:11,839 Speaker 2: remain standing when it's domestic competitors like Ansett and Tiger 27 00:01:11,880 --> 00:01:14,200 Speaker 2: and Bonzer and Rex. They've all fallen, haven't they. 28 00:01:14,360 --> 00:01:16,480 Speaker 1: I have And over the past few years, Bman, Quantus 29 00:01:16,480 --> 00:01:17,679 Speaker 1: has been living its best life. 30 00:01:17,760 --> 00:01:19,760 Speaker 2: Number of passengers has jumped over twenty two percent in 31 00:01:19,800 --> 00:01:20,720 Speaker 2: the past two years alone. 32 00:01:20,760 --> 00:01:23,200 Speaker 1: Well, and your profits have consistently tipped the scales over 33 00:01:23,280 --> 00:01:25,840 Speaker 1: one point two billion bucks, including the COVID years. 34 00:01:25,840 --> 00:01:28,720 Speaker 2: Of course, But jose Wait Qwny didn't anticipate a regional 35 00:01:28,760 --> 00:01:29,360 Speaker 2: war right now. 36 00:01:29,480 --> 00:01:31,880 Speaker 1: No, no, no, And now Quantus could see its profits 37 00:01:31,959 --> 00:01:34,920 Speaker 1: drop sharply if the conflict in the Middle Ages continues 38 00:01:34,959 --> 00:01:35,440 Speaker 1: to drag on. 39 00:01:35,600 --> 00:01:38,600 Speaker 2: According to Quantus as a format chief economist Hawny could 40 00:01:38,600 --> 00:01:41,040 Speaker 2: suffer a falling profit from nearly one point two bill 41 00:01:41,280 --> 00:01:43,160 Speaker 2: down to just five hundred and forty four mil this 42 00:01:43,280 --> 00:01:43,920 Speaker 2: financial year. 43 00:01:43,959 --> 00:01:46,400 Speaker 1: And the main culprit fuel prices, of course, which are 44 00:01:46,400 --> 00:01:48,080 Speaker 1: one of the biggest costs for any. 45 00:01:47,880 --> 00:01:51,040 Speaker 2: Airline, and Quantus is not the only one suffering. 46 00:01:50,680 --> 00:01:53,400 Speaker 1: No no no. Other airlines globally, like United Airlines in 47 00:01:53,440 --> 00:01:55,680 Speaker 1: the US and Air New Zealand, have also started to 48 00:01:55,720 --> 00:01:57,000 Speaker 1: cut their flight schedules. 49 00:01:57,040 --> 00:01:59,280 Speaker 2: Thankfully, for the Big Q, it's hedged a chunk of 50 00:01:59,280 --> 00:02:02,040 Speaker 2: its fuel, so they're not yet feeling the pain. 51 00:02:02,120 --> 00:02:04,560 Speaker 1: But the longer this war drags on, the longer this 52 00:02:04,640 --> 00:02:05,680 Speaker 1: will hurt Quantus form. 53 00:02:05,920 --> 00:02:07,000 Speaker 2: So what's the key learning here? 54 00:02:07,040 --> 00:02:09,040 Speaker 1: Fuel is one of the biggest costs for airlines and 55 00:02:09,080 --> 00:02:11,079 Speaker 1: it's also one of the most unpredictable. 56 00:02:11,120 --> 00:02:13,560 Speaker 2: In fact, in recent years, fuel has typically made up 57 00:02:13,600 --> 00:02:17,680 Speaker 2: about twenty five to thirty percent of quantus total operating costs. 58 00:02:17,080 --> 00:02:19,600 Speaker 1: So when oil prices move, profits move with it. 59 00:02:19,639 --> 00:02:21,400 Speaker 2: But here's where it gets a very interesting juzzy boy, 60 00:02:21,440 --> 00:02:24,120 Speaker 2: because Quantus does not just buy fuel at today's price. 61 00:02:24,200 --> 00:02:26,440 Speaker 1: Nope, it hedges a portion of the fuel that it needs, 62 00:02:26,520 --> 00:02:28,400 Speaker 1: which means it locks in prices ahead of time. 63 00:02:28,520 --> 00:02:30,680 Speaker 2: In fact, Contus has around eighty one percent of its 64 00:02:30,680 --> 00:02:33,280 Speaker 2: fuel hedged for the second half of FI twenty six. 65 00:02:33,120 --> 00:02:35,080 Speaker 1: So if oil price is spike like they have a 66 00:02:35,160 --> 00:02:37,840 Speaker 1: large chunk of Quantus's fuel has been bought at older 67 00:02:38,000 --> 00:02:39,320 Speaker 1: cheaper prices. 68 00:02:38,919 --> 00:02:41,359 Speaker 2: Which protects profits in the short term. 69 00:02:41,120 --> 00:02:45,120 Speaker 1: But those hedges eventually expire, and if high fuel prices 70 00:02:45,160 --> 00:02:47,760 Speaker 1: stick around, Quantus will be forced to buy fuel at 71 00:02:47,760 --> 00:02:49,640 Speaker 1: the new higher prices. 72 00:02:49,240 --> 00:02:51,720 Speaker 2: So you essentially get a delay effect. The fuel shocks 73 00:02:51,760 --> 00:02:54,200 Speaker 2: don't hit immediately, but actually creep in over time. 74 00:02:54,280 --> 00:02:56,840 Speaker 1: And that's why investors are so concerned about Quantus because 75 00:02:56,880 --> 00:02:59,520 Speaker 1: if this war persists, it's really going to hurt Quantus's 76 00:02:59,560 --> 00:03:00,280 Speaker 1: bottom line. 77 00:03:00,360 --> 00:03:03,440 Speaker 2: For our second story, Apple is putting ads on Apple 78 00:03:03,560 --> 00:03:06,639 Speaker 2: Maps and quietly turning your next cafe search into an 79 00:03:06,680 --> 00:03:08,040 Speaker 2: ad battle with Google. 80 00:03:08,080 --> 00:03:10,480 Speaker 1: Well, well, well, Apple Maps is entering the ad game, 81 00:03:10,520 --> 00:03:11,919 Speaker 1: b man, So tell me more. 82 00:03:11,960 --> 00:03:14,040 Speaker 2: Apple is the three point seven trillly in US dollar 83 00:03:14,040 --> 00:03:16,480 Speaker 2: bohema that was founded in Steve Jobs's parents' garage in 84 00:03:16,560 --> 00:03:17,640 Speaker 2: nineteen seventy six. 85 00:03:17,480 --> 00:03:19,560 Speaker 1: And since then it's released the Mac computers, the iPod, 86 00:03:19,600 --> 00:03:22,239 Speaker 1: the iPad, the iPhone, Apple Watch, MacBooks, and a whole lot. 87 00:03:22,120 --> 00:03:24,520 Speaker 2: More, not to mention it's software products like the app store, 88 00:03:24,600 --> 00:03:27,480 Speaker 2: Apple Music, iCloud, Apple TV Plus. 89 00:03:27,240 --> 00:03:29,560 Speaker 1: And the man Let's be honest. Apple Apps has long 90 00:03:29,600 --> 00:03:32,200 Speaker 1: been known as the it'll do alternative if you don't 91 00:03:32,200 --> 00:03:32,959 Speaker 1: have Google Maps. 92 00:03:33,040 --> 00:03:35,600 Speaker 2: Yeah, but now Apple is planning on milking it for 93 00:03:35,600 --> 00:03:36,720 Speaker 2: all it's worth. That's a right. 94 00:03:36,760 --> 00:03:39,600 Speaker 1: Apple's rolling out paid ads inside its Maps out in 95 00:03:39,640 --> 00:03:40,840 Speaker 1: the middle of this year, So. 96 00:03:40,960 --> 00:03:42,960 Speaker 2: Businesses will now be able to pay to appear at 97 00:03:43,000 --> 00:03:44,520 Speaker 2: the top of search results in Apple Maps. 98 00:03:44,520 --> 00:03:46,760 Speaker 1: So when you search best coffee, in the top result 99 00:03:46,840 --> 00:03:48,680 Speaker 1: might not be the best coffee, it might be the 100 00:03:48,720 --> 00:03:50,000 Speaker 1: best paying coffee. 101 00:03:50,120 --> 00:03:52,600 Speaker 2: Yep. The first rollout will take place across the US 102 00:03:52,640 --> 00:03:55,040 Speaker 2: and Canada, but if it works expected everywhere. 103 00:03:54,680 --> 00:03:57,840 Speaker 1: And clearly Apple's trying to capitalize on intent based advertising, 104 00:03:57,880 --> 00:03:59,640 Speaker 1: which has been Google's bread and butter. 105 00:03:59,560 --> 00:04:01,440 Speaker 2: For young So what's the key learning here? 106 00:04:01,600 --> 00:04:04,520 Speaker 1: Intent based advertising is all about catching someone at the 107 00:04:04,560 --> 00:04:06,480 Speaker 1: exact moment they're ready to take action. 108 00:04:06,600 --> 00:04:10,040 Speaker 2: Think about the difference between scrolling Instagram versus searching best 109 00:04:10,240 --> 00:04:11,160 Speaker 2: Thai food near me. 110 00:04:11,240 --> 00:04:14,240 Speaker 1: On Instagram you might be inspired to buy something. 111 00:04:13,920 --> 00:04:17,160 Speaker 2: On Maps or Google Search you already planning. 112 00:04:16,800 --> 00:04:19,159 Speaker 1: To, and advertisers will pay a premium to show up 113 00:04:19,240 --> 00:04:20,400 Speaker 1: in that exact moment. 114 00:04:20,520 --> 00:04:23,920 Speaker 2: In fact, search ads which capture intent converted around four 115 00:04:23,920 --> 00:04:26,559 Speaker 2: point four percent on average, compared to just zero point 116 00:04:26,640 --> 00:04:28,640 Speaker 2: five to seven percent for display ads. 117 00:04:28,520 --> 00:04:31,280 Speaker 1: And Google rakes in them all analysts estimate the Google 118 00:04:31,360 --> 00:04:34,360 Speaker 1: Maps generates arend eleven point one billion US dollars per 119 00:04:34,440 --> 00:04:35,880 Speaker 1: year in total revenue. 120 00:04:35,560 --> 00:04:37,159 Speaker 2: And that is why Apple wants a slice of this 121 00:04:37,240 --> 00:04:38,120 Speaker 2: gigantic pie. 122 00:04:38,640 --> 00:04:42,800 Speaker 1: For our third and final story, Popmart's Lebubou empire is booming, 123 00:04:42,839 --> 00:04:45,880 Speaker 1: but a twenty percent share price drop shows hype doesn't 124 00:04:45,920 --> 00:04:47,000 Speaker 1: always equal happily. 125 00:04:47,040 --> 00:04:49,960 Speaker 2: Ever, after Popmark goes from cute collectibles to not so 126 00:04:50,160 --> 00:04:52,440 Speaker 2: cute market reaction, what is going on here? Okay? 127 00:04:52,440 --> 00:04:55,880 Speaker 1: So PopMart International Group is the company behind those crazy 128 00:04:55,920 --> 00:04:57,800 Speaker 1: popular blind box toys. 129 00:04:57,520 --> 00:04:59,599 Speaker 2: You know, the ones where fully grown out line up 130 00:04:59,640 --> 00:05:02,200 Speaker 2: for our and over their hard earned money to see 131 00:05:02,279 --> 00:05:04,560 Speaker 2: which jagged tooth elf months so they can get their 132 00:05:04,600 --> 00:05:05,560 Speaker 2: paws on, and. 133 00:05:05,480 --> 00:05:08,080 Speaker 1: The man absolutely exploded in popularity. 134 00:05:08,200 --> 00:05:11,320 Speaker 2: Jusi boy Laboobu has gone so viral that Popmark is 135 00:05:11,400 --> 00:05:14,039 Speaker 2: now teaming up with Sony Pictures to turn it into 136 00:05:14,080 --> 00:05:15,040 Speaker 2: a movie, and. 137 00:05:15,000 --> 00:05:18,440 Speaker 1: So it's no surprise that Laboobo's financials went through the roof. 138 00:05:18,560 --> 00:05:21,160 Speaker 2: Pop Mart's revenue jumped one hundred and eighty five percent 139 00:05:21,200 --> 00:05:22,679 Speaker 2: to five point four billion US. 140 00:05:22,520 --> 00:05:25,120 Speaker 1: Dollars and it's profit jumped over three hundred percent as well. 141 00:05:25,160 --> 00:05:28,080 Speaker 2: But despite that growth, the market expected even more. 142 00:05:28,600 --> 00:05:30,839 Speaker 1: In fact, be Man, their shares dropped more than twenty 143 00:05:30,880 --> 00:05:32,800 Speaker 1: percent in a single day after these results. 144 00:05:32,880 --> 00:05:35,320 Speaker 2: You see, Juzy Boy investors got nervous about a slowdown 145 00:05:35,360 --> 00:05:36,320 Speaker 2: in the fourth quarter. 146 00:05:36,080 --> 00:05:38,040 Speaker 1: And that led to concerns that demand for the pop 147 00:05:38,040 --> 00:05:39,919 Speaker 1: mark characters might not last forever. 148 00:05:40,200 --> 00:05:43,000 Speaker 2: So even with blockbuster growth, the market is starting to 149 00:05:43,040 --> 00:05:45,039 Speaker 2: ask is this a long term brand or just a 150 00:05:45,120 --> 00:05:45,800 Speaker 2: viral moment? 151 00:05:46,400 --> 00:05:47,839 Speaker 1: So what is the key learning here? 152 00:05:47,960 --> 00:05:50,440 Speaker 2: Hype can build a business, but it can also break 153 00:05:50,480 --> 00:05:51,520 Speaker 2: one just as fast. 154 00:05:51,600 --> 00:05:54,360 Speaker 1: Yeah, we know that hype driven businesses can scale insanely 155 00:05:54,440 --> 00:05:55,280 Speaker 1: fast because they. 156 00:05:55,160 --> 00:05:58,240 Speaker 2: Tap into culture. One product goes viral and suddenly everyone 157 00:05:58,240 --> 00:06:00,680 Speaker 2: needs to spend fifty dollars on a bark without knowing 158 00:06:00,720 --> 00:06:02,320 Speaker 2: what is inside. But be Man, if. 159 00:06:02,160 --> 00:06:05,200 Speaker 1: Consumer attention shifts, the demand can drop just as quickly 160 00:06:05,279 --> 00:06:05,880 Speaker 1: as it rose. 161 00:06:06,040 --> 00:06:09,000 Speaker 2: And Josie Boy. There's a cautionary tale here with spin Master. 162 00:06:09,279 --> 00:06:11,680 Speaker 1: I remember spin Master back in twenty sixteen when they 163 00:06:11,720 --> 00:06:12,719 Speaker 1: released hatch moles. 164 00:06:12,800 --> 00:06:15,480 Speaker 2: Those were the eggs that kids had to care for 165 00:06:15,600 --> 00:06:17,200 Speaker 2: until it hatched into a toy creature. 166 00:06:17,279 --> 00:06:20,599 Speaker 1: Yeah, hatchamuves exploded in twenty sixteen with nearly eighty million 167 00:06:20,640 --> 00:06:22,600 Speaker 1: bucks in sales alone that year. 168 00:06:22,400 --> 00:06:25,839 Speaker 2: But by twenty nineteen, Hatchabules saw sales fall by forty percent. 169 00:06:25,920 --> 00:06:28,320 Speaker 2: Kids just got over it. So PopMart is clear trying 170 00:06:28,320 --> 00:06:29,120 Speaker 2: to reduce this risk. 171 00:06:29,120 --> 00:06:31,640 Speaker 1: But right now, be man investors. I'm convinced that these 172 00:06:31,800 --> 00:06:34,839 Speaker 1: sharp toothed little elves are the real deal long term 173 00:06:34,839 --> 00:06:36,920 Speaker 1: plucked out. If you've been following the news, listening to 174 00:06:36,960 --> 00:06:39,159 Speaker 1: the pod, and enjoying the personal finance in our app, 175 00:06:39,200 --> 00:06:41,480 Speaker 1: you have a great chance to win fifty bucks today 176 00:06:41,480 --> 00:06:43,560 Speaker 1: in our game quick Sticks, first person to answer the 177 00:06:43,560 --> 00:06:45,760 Speaker 1: three questions correctly will win, So make sure it's down 178 00:06:45,800 --> 00:06:48,000 Speaker 1: lead the Flux app, turn your notications on and this 179 00:06:48,080 --> 00:06:50,280 Speaker 1: could be the greatest starts of the weekend of all time. 180 00:06:50,640 --> 00:06:52,560 Speaker 2: Thanks for listening and we'll see you on Monday.