Consumer

• Doms (DOMS IN) is looking to raise around US$140m (estimated) in its upcoming India IPO. The deal will be run by JM Financial, BNP, ICICI Securities and IIFL Securities.
• DOMS is a leading player and brand in India’s stationery and art products market. It designs,  manufactures, and sells a wide range of products, primarily under its flagship brand ‘DOMS’.
• Its core products such as pencils and mathematical instrument boxes had market shares of 29% and 30% by value in FY23, respectively, as per Technopak.

• JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) could be deleted as the lowest ranked current index constituents.
• There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
• Short interest has been increasing on JB Hi-Fi Ltd (JBH AU), Charter Hall (CHC AU) and Lendlease Group (LLC AU) and could be partially driven by potential index deletions.

• The electric-vehicle unit of defaulted property developer China Evergrande Group reported that in the first half of 2023 it delivered 760 cars and its net loss narrowed by almost half from a year earlier to 6.87 billion yuan ($942 million).
• China Evergrande New Energy Vehicle Group Ltd.’s revenue jumped more than fivefold to 155 million yuan, mainly from mass production and delivery of its flagship model, the Hengchi 5, starting last October.
• The electric-car company has been plagued by production delays and setbacks since touting its first Hengchi model as early as 2019 and pledging to rival Tesla within three to five years.

• Wynn Resorts delivered a positive result and managed an all-around beat in the last quarter.
• During the quarter, Wynn Las Vegas generated $224.1 million in adjusted property EBITDA on $578.1 million in operating revenue, resulting in an EBITDA margin of 38.8%.
• Additionally, Wynn Resorts had strong hotel occupancy and excellent tenant retail sales in July.

paragon continued its debt reduction programme in Q223 with the disposal of semvox. Operating performance progressed positively with H123 sales rising 7% and EBITDA margin in Q223 exceeding 10%, although the business mix shifted towards Mechanics as new contracts ramped up. Management has maintained FY23 guidance and we have modestly reduced our earnings estimates to reflect the mix change as well as higher interest in FY23. As the debt reduction programme continues into FY24 we expect lower interest charges and improving operational cash flows. Assuming the successful further partial redemption of the Eurobond by January 2024, investor focus should return to the growth potential.

• Sony Group Corporation delivered an all-around beat in the previous quarter.
• However, consolidated operating income fell because the Financial Services segment’s operating income fell.
• Software sales for the quarter increased mostly due to the launching of the enticing third-party software and increased PS5 penetration.

• The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat.
• The company made significant management adjustments and productivity enhancements to develop a more economical, coordinated, and streamlined approach to operations.
• Disney+ core subscribers increased during the quarter, with foreign growth more than balancing small domestic net losses.

• After Wednesday’s close, Culp Inc. reported a 1Q24 EPS loss of $0.27, beating our $0.36 loss estimate and its 1Q23 $0.47 LPS.

• Revenues missed expectations and residential demand challenged. The balance sheet remains strong.

• The Mattress Fabric (CHF) segment delivered a markedly improved margin, reporting a gross margin of 6.8%, up from negative 0.1% a year ago and better than our estimate of 2.6%.

• Honda Motor delivered a mixed result in the recent quarter, with revenues below market expectations, but surpassed the analyst consensus regarding earnings.
• Unit sales for Power Products operations fell to 5.645 million units, mostly because of a fall in North America.
• The supply conditions for semiconductors gradually improved throughout the quarter, which led to greater unit sales in the United States year over year.

• The Home Depot delivered a solid result and managed an all-around beat in the last quarter, with sales of $42.9 billion.
• Comp sales for the entire firm, as well as for the company’s US locations, fell in the quarter.
• The second quarter’s pro sales performance was slightly worse than the DIY customer’s performance.

• As part of our Narrative and Numbers themed Annual Report insights, we shift our focus to FSN E-Commerce Ventures (Nykaa) (NYKAA IN).
• We focus on Nykaa Fashion due to its financial significance in spite of not being a material subsidiary warranting the need for board review on materiality policy.
• Notable issues demanding scrutiny include (1) Declining Financials, (2) Inconsistent Reporting, (3) Misleading Narrative, and (4) Elevated Executive Compensation.

• PDD reported blowout 2Q results with bottom line beating consensus by 40% thanks to stronger domestic marketplaces business, narrower losses incurred by TEMU and higher other income.
• 2Q results cleared much of our concern around PDD’s bottom line growth and we now see 2Q as the low point of earnings growth in FY23.
• We believe the company will report $9 billion net profit for FY23 and expect rounds of earnings revision by the street will further lift share price. US $120 price target.

• Despite disclosing “improvement measures,” many companies have yet to see their stock prices rise sufficiently, which is one reason why an increasing number of companies announce enhanced shareholder returns.
• 2003 and 2013 were the starting point for monetary easing and excess liquidity helped raise P/B. Whether BOJ will head for the exit or continue easing is a major factor.
• Since this stock price rally was brought about by an increase in P/E multiples, further stock price appreciation will require continued profit growth, i.e., an increase in ROE.

• Organto reported Q2 financial results that missed our estimates on revenue but beat our estimates on gross margin and adjusted EBITDA.
• Yesterday evening, Organto Foods (OGO:TSXV) reported Q2/23 financial results that were softer than our expectations on revenue but beat our estimates on profitability metrics.
• Gross margin for the quarter came in at 9.0% compared to our estimate of 8.0% and 4.1% in Q2 last year.

• PDD reported CY2Q23 top-line and non-GAAP net profit 28% and 58% vs. our est., and 21% and 44% vs. cons., respectively. 
• We raised our 2H23 forecasts for PDD because: 1) GMV growth hasn’t been significantly impacted by the current competitive landscape; 2) take rate could maintain a high level due to 
• Continuous optimization of ad products; and 3) new businesses such as Temu and Kuaituantuan (快团团) have fair growth. We maintain BUY and raise our TP to US$ 107.

• Shareholders of Prosus NV (PRX NA) and Naspers (NPN SJ) approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers’ Share Consolidation to move forward.
• What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.
• Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. 

• The Hang Seng announces changes along with prospective flows 2wks before the actual change. Capping flows are calculated off the close three days before implementation. That was today.
• There have been some minor movements in the rankings. Nothing major. There is still just over US$1bn to trade, one-way.
• Enclosed are totals for each of the three major indices (Hang Seng, HSCEI, and HS Tech) and then netted flows. The biggest is US$470mm of BABA to sell. Spreadsheet attached.

• PDD’s revenue increased by 66% YoY to RMB52 bn, significantly higher than the market consensus RMB43 bn.
• The operating margin declined to 24% in 2Q23 from 28% in 2Q22 due to aggressive expansion outside China.
• We believe the stock still has an upside of 47% for year end 2023. Buy.

• During the initial months of 2QFY24, both Tokyo Disneyland and Tokyo DisneySea experienced a significant double-digit QoQ drop in Google search interest.
• Using Google Search trends data for the first two months of 2QFY24, we anticipate a QoQ decline of about 17% in Oriental Land’s Theme Parks revenue, dropping below ¥100bn.
• 2QFY24 consensus OP is 2.5x above the company’s guidance, and both short and medium term consensus revenue and OP targets for Oriental Land (4661 JP) appear blatantly unachievable.

• Chongqing Hongjiu Fruit (6689 HK) was listed on 5th Sep 2022, where it raised around US$71m in its Hong Kong IPO. Its one-year lockup will expire on 4th Sep 2023. 
• Chongqing Hongjiu Fruit (CHJF) is a multi-brand fresh fruit distributor in China with an end-to-end supply chain. As per CIC, it was the largest fruit distributor by revenue in 2022. 
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Ultrajaya Milk (ULTJ IJ) remains a core proxy for the under-penetration of dairy products in Indonesia, which stands at less than half of Thailand in terms of per capita consumption.
• Ultrajaya has seen a strong rebound in sales this year for its UHT milk sales but material pressure persisted in 1H2023 but will abate in 2H2023 improving margins.  
• Its carton tea products are seeing a strong rebound and a new distribution warehouse in Cikarang will improve distribution. Ultrajaya‘s growth trajectory is resuming and valuations are attractive. 

• Wuliangye Yibin Co Ltd A (000858 CH), the second largest Chinese liquor company in China, trades at one of the lowest PE multiples in the space. 
• Kweichow Moutai (600519 CH), the largest Chinese liquor company trades at 26x 2024 expected earnings, and most other listed Chinese liquor names trade above 20x 2024 expected earnings.
• Upon closer look, Wuliangye is actually a classic case of value trap – slow growth with no change or slowly deteriorating PE multiples. 

• The company is the most geographically diverse operator in the global gaming space. It has been something of a post-covid laggard relative to sector peers.
• Return to modern profit largely comes from Malaysia Highlands flagship.
• Big unnoticed catalyst could be its key position in the bidding wars for three new licenses to be awarded in metro New York. Genting active there since 2011.

• Yerbaé reported strong Q2 financials that were in line with our estimates on sales ($4.1M) and beat our expectations for gross margins (56%).
• Yesterday, Yerbaé Brands Corp. (YERB.U:TSXV, YERBF:OTC) reported Q2/23 financial results that were in line with our estimates for net revenue and beat our estimates for gross margin.
• Gross revenue came in at $4.3M vs. our estimate of $4.5M with the promotional rate at 4% compared to our estimate of 7%.

• HLB’s process of selecting a lead underwriter for the KOSPI listing has been witnessed in Yeouido.
• The price impact becomes most evident on the board approval date as the point at which this impact is most pronounced is substantially accelerated due to the market’s learning effect.
• There is a strong likelihood that HLB will have its board decision by mid-September, necessitating our preparation for a position setup targeting this timing.

• Sogo & Seibu’s labor union threatens strike if job protection talks stall. This emphasizes the number of considerations Seven & I Holdings (3382 JP) had to consider during changes.
• Had ValueAct shown more patience, they might have worked with Seven & I to improve the struggling Eto Yokado supermarkets business.
• Thus, ValueAct’s investor activism campaign seem unlikely to achieve a full restructuring of underperforming businesses at Seven & I.

• The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
• The index changes will be confirmed after the close on 1st September 2023.
• In this insight, we take a final look the names leading the race to become ADDs/DELs for the upcoming index review.

• PT Nippon Indosari Corpindo (ROTI IJ) booked a strong profit performance in 2Q2023 despite slower sales growth, as return rates normalised and raw material and packaging prices stabilised further. 
• Sales to Modern Trade led the way in 2Q2023 as post-pandemic consumption habits shifted to those formats, whilst General Trade saw pressure as hawkers and warung owners took holidays
• ROTI should continue to benefit from lower input costs together with a normalisation of its General Trade Business plus productivity is set to improve markedly in 2H2023.

• Millie’s Library is trying to complete its IPO again in September 2023, after a failed attempt in November 2022. The IPO price range is from 20,000 won to 23,000 won.
• Founded in 2016, Millie’s Library is a reading platform company that introduced the first monthly e-book subscription service in Korea in October 2017. 
• Our valuation analysis suggests base case target price of 31,769 won per share, which is 38% higher than the high end of the IPO price range of 23,000 won.

• It’s necessary to clearly present cash allocation policy to investors and communicate with them, but unless this policy is convincing and feasible, investors cannot envision an increase in corporate value.
• Companies that use ROE or ROIC as KPIs and disclose their cost of capital are still limited. The low return on cash flow may be the reason behind this.
• As TOPIX is correlating more rapidly with nominal GDP than with P/B after 2020, there’s increasing need to communicate to investors that free cash flow will grow through cash allocation.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Genting Berhad’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• Tuhu Car (2007986D HK) is looking to raise up to US$300m in its upcoming Hong Kong IPO. 
• Tuhu is an integrated online and offline platform for automotive services in China.
• We have looked at the firm’s past performance in earlier notes. In this note, we discuss the PHIP updates.

• Sirius XM Holdings delivered a solid result and managed an all-around beat last quarter.
• The company’s strategic approach to managing expenses and optimizing efficiency resulted in improved cash operating expenses.
• Sirius XM Holdings maintained its prudent financial approach, exemplified by strong free cash flow generation and responsible capital allocation strategies prioritizing shareholder returns.

• Molson Coors Beverage Company delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
• The company marked the most successful quarter for reported net sales revenue since the merger of Molson and Coors in 2005.
• Notably, Molson Coors experienced remarkable growth in its key brands, with Coors Light and Miller Lite playing a pivotal role in driving positive trends.

• Playmates Toys (869 HK) reported strong 1H23 results on the back of initial demand for TMNT toys. Revenues were up 30% and operating profits increased 3x.
• Management remains optimistic for 2H23 on the back of continued excitement for TMNT movie and follow-up series on Paramount+.
• Playmates Toys trades at 5x FY23 P/E and >1x P/E on an ex-cash basis. The company also declared another 2c interim dividend.

• Meituan reported CY2Q23 rev./non-IFRS net income in-line/70% vs. cons., and in-line/28% vs. our estimate. Increased spending on in-store competition was offset by abundant rider supply that lowered food delivery cost. 
• We raise our 3Q net margin est. by 3ppts as (1) the in-store counterattack against Douyin has been a success, (2) CGB spending to counter Duoduo Maicai has remained restrained.
• Initial results of the in-store counterattack showed positive results, while FD margin continues to benefit from ample riders. We maintain Meituan’s BUY rating and HK$ 165 TP.

• Ricegrowers Limited, trading as SunRice (ASX:SGLLV), held its AGM last week and provided some updated commentary around trading for FY24.
• Most notably, the ‘strong momentum from H2 FY23 has continued into Q1 FY24’, remembering H2 FY23 EBITDA increased 37% on the pcp.
• Factors supporting this growth include the cycling of annualised price rises, additional pricing reviews, international market expansion, improvement in freight and logistics costs, and the ongoing recovery in the CopRice business.

• Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs 
• Does China’s relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a “game-changer” for overall travel demand
• We also review July domestic traffic and preview Trip.com’s Q2 results (out Sept 4th)

• This week it is changed from H/A Discount to A/H Premium, by popular demand. Some Northbound data is added. We kept the unicorn.
• Last week saw a win/loss ratio of 21:13. Average recommended pair on the week earned 0.9% if Sunday recos executed Monday close, 1.35% if executed Monday VWAP. 
• 6 Unwinds and 3 new trades recommended this week. As always, feedback desired to make this even better.

• This is a special one-time report on Hanesbrands Inc, a company that is internationally recognized for its Hanes underwear and Champion sportswear and has recently garnered the attention of the New York-based hedge fund, Barington Capital Group LP.
• With its acquisition of a stake in Hanesbrands, which is slightly below 1%, Barington has initiated active dialogues with the company’s board and management.
• At the heart of their concerns is Hanesbrands’ subpar performance when placed side by side with its industry competitors and the wider market.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – ARM Holdings (1822695D US), Integral Corporation (5842 JP) and S.F. Holding (002352 CH) IPOs.
• Event-Driven developments – Boustead Plantations (BPLANT MK), UMW Holdings (UMWH MK), Eoflow (294090 KS), Golden Eagle Retail (3308 HK), Costa Group Holdings (CGC AU), Metro Pacific Investments Co (MPI PM). 

• Metrical’s research shows that % of female board members has significant positive correlation with ROE(2019), with ROA(2020), with ROA and Tobin’s Q(2021), and with ROE, ROA and Tobin’s Q(June 2023).
• A measure of a company’s seriousness about diversity is the ratio of internal executive directors. Female directors rely heavily on outside directors and are rarely promoted from within the company.
• To bring value to a company, diversity must be built in at every workplace level, but fewer female employees than male are promoted to managerial positions in two-thirds of companies.

• Palm oil play Kuala Lumpur Kepong (KLK MK) has entered an agreement with Boustead Holdings, Boustead Plantations (BPLANT MK)‘s largest shareholder, to acquire a 33% plus 1 share stake.
• Upon the completion of the agreement, KLK will make a Mandatory Offer for all shares not owned in BPlant. The Offer Price is RM1.55/share, a lifetime high. 
• The agreement conditions are rudimentary. The MGO has no minimum acceptance condition. This is done.

• Meituan (3690 HK) reported 2Q2023 results yesterday which beat consensus estimates and the company’s profitability has further strengthened during the quarter.
• However, there has been clear signs of a slowdown in the company’s core local commerce biz with increased promotions/incentive, decline in revenue per on-demand delivery transaction and fall in OPM.
• Meituan has flagged that macroeconomic headwinds and adverse weather conditions could slowdown core local commerce biz in the current quarter which should drag down earnings.

• Pop Mart International Group L (9992 HK) presents an interesting story of a Chinese domestic brand going overseas, and potentially being successful overseas (at least in the short-term). 
• A recent case of a Chinese brand achieving success overseas is Miniso (MNSO US), and shareholders of Miniso have been richly rewarded. 
• Pop Mart trades at a PE of 24x based on estimated 2024 earnings, with around 30% expected net profit growth in 2024E.   

The Europe HY Trade Book for August 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

• Total revenue grew by 33% YoY, which is the highest growth rate in the past seven quarters.
• The company achieved a higher operating profit in 2Q23 after turned the profit positive in 1Q23.
• The stock price has risen by 20% since our last buy rating, but we believe there will be still 38% upside for yearend 2024.

• In this insight, we take a look at the names leading the race to become ADDs/DELETEs for the SE600 and EURSTX Indices for the September 2023 Rebalance.
• I currently expect 6 ADDs and 6 DELETEs for the SE600 index in the September 2023 rebalance but these rankings could change prior to the base date.
• After the September 2023 rebalance, SimCorp A/S (SIM DC) could get deleted from the SE600 index and trigger an intra-review index change.

• Sime Darby (SIME MK) entered a conditional sale and purchase agreement (SPA) to acquire PNB’s 61.18% stake in UMW Holdings (UMWH MK) for RM5.00 per share.
• Once the SPA becomes unconditional, Sime Darby must launch an MGO for the remaining UMW shares at RM5.00 per share, an 8.2% premium to the last close.  
• The SPA is conditional on Sime Darby’s shareholder approval. The SPA and MGO are targeted to be completed in 4Q23 and 1Q24, respectively.

• Kuala Lumpur Kepong (KLK MK) will acquire 33.00% of Boustead Plantations (BPLANT MK)‘s outstanding shares from Boustead Holdings/BHB at RM1.55 per share. The purchase is conditional on BHB shareholder approval.
• Once the purchase becomes unconditional, the joint offerors (KLK, BHB, LTAT) will be required to launch an MGO at RM1.55 per share, a 13.1% premium to the last close. 
• The MGO will have no minimum acceptance condition. The offer is attractive and represents an all-time high. The MGO is expected to be complete in 4Q23.

• Cello World Limited (CW IN) is looking to raise around US$210m in its upcoming India IPO. The bookrunners on the deal are Kotak, JM Financial, ICICI, IIFL, and Motilal Oswal.
• Cello World (CW) is an Indian consumer products company. The firm is a leading company in the consumerware market in India.
• According to the Technopak Report, the firm’s consumer houseware, writing instruments and stationery, and moulded furniture and allied products categories are amongst the largest brands in the Indian consumerware market.

• In one of the largest M&A transactions in Malaysia, Sime Darby (SIME MK) intends to acquire a 61.2% stake in UMW Holdings (UMWH MK) from Permodalan Nasional Bhd for RM3.57bn. 
• Sime Darby is paying RM5/share, a token 9.9% premium to last close, but more like 25% when factoring in apparent news leakage.
• Once the stake sale is completed, Sime Darby will launch an unconditional MGO for all remaining shares not held. This transaction is expected to be wrapped up in early 2024.

• Over the last decade, VIPShop proved it is the undisputed leader in China’s online discount retail business with the longest streak of profitability and impressive ROE among China internet names.
• Investors are misplaced to look to the stock for growth. Rather, it is cash cow in mature business with deep moat and run by disciplined management who cares about shareholders.
• Trading at 4.5x our FY23 earnings excluding net cash, it valuation is attractive even compared to depressed sector comps. Expect 20% CAGR of return by 2025 driven by intrinsic value.

• Metrical’s past analysis also shows that a company’s capital allocation to investors is effective in raising valuations, so a proper allocation between investment and shareholder return is a baseline.
• The correlation analysis between TOPIX and nominal GDP suggests that the shift from deflation to inflation has triggered overseas investors to focus on the further expansion of company profits.
• While average P/B and ROE have remained flat, the rise in P/E has boosted the stock recently. This suggests that further share price appreciation will require an increase in profits.

• Liberty has waived the 95% threshold condition. Liberty has now mandatorily opened again the tender given it owns more than 90% (93.43%),  on same terms until 13 September (settlement 27 September).
• At 5.9x EV/Fwd EBITDA (vs. 5.4x EV/20e EBITDA for Orange Belgium minorities), the offer is relatively cheap, but also reflects the uncertainties surrounding Citymesh’s entrance and risk of market share losses.
• Spread is positive. After the second acceptance period closes, I believe the delisting is extremely likely. With limited liquidity and floor dividend no longer guaranteed, recommendation is accept the offer. 

• Golden Eagle Retail (3308 HK)‘s scheme document is out, with the court meeting scheduled for 15 September. The IFA considers the HK$6.88 per share offer fair and reasonable. 
• The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The shareholder with a blocking stake has provided an irrevocable.
• This is a done deal which help by the material derating of peers. At the current price of HK$6.75 and for the 17 October payment, the gross/annualised spread is 1.9%/13.4%.

• Holistic Educational Suite: 3PL enriched its product portfolio, with the APAC debut of WritingLegends and BrightPath Assessement. 
• Steady Financial Growth: Amidst challenges in the UK, 3PL’s 9% ARPU growth highlights its consistent performance and market strength. 
• Setting the Pace: With attractive-priced offerings, an integrated product approach, and an innovative teacher training vision, 3PL is expected to continue growing its top line as more schools join. 

• Anta Sports Products (2020 HK) reported a set of resilient earnings in 1H23, with net profit up 32% yoy.
• Management reconfirmed 2023 guidance for Fila and Anta at double-digit retail sales growth, and increased 2023 guidance for other brands to 40% yoy compared to 30% before. 
• Anta’s sales growth has been the most resilient in previous industry down-turns in China.  China macro worries should not be overly read through to Anta’s future results.

H&H International’s H1/23 results were stronger than expected. The company managed to deliver y-o-y growth of 17% in total revenue to CNY 7 bn, driven by an optimised product mix with strong growth (above 40%) in nutrition supplements across all product categories. As a result, revenue from nutrition supplements further expanded to account for 60.1% of total revenue (H1/22: 49%). The top-line increase was boosted by double-digit expansion across all regional markets, in Mainland China (H1/23: +15.4%), Australia & New Zealand (ANZ; +19.4%), North America (+20.9%) and other territories (+13.7%).

Problems in baby nutrition & care (BNC) persisted, with revenue down 2% y-o-y in H1/23. IMF sales dropped 10% in Mainland China and fell 55% in ANZ, in line with our expectations. We expect adult nutrition & care (ANC) and pet nutrition & care (PNC) to continue being H&H’s key growth segments, while BNC should remain challenging.

That said, we believe H&H faces very limited short-term repayment risk, with 1.4x LTM Cash/ST Debt as at end-June 2023. The company had CNY 2.1 bn in cash, compared to c. USD 210 mn in repayment needs over the next 12 months. Liquidity could also be supported by enhanced working capital efficiency, which would lead to stronger operating cash flow.

Our Credit Bias on H&H is “Stable”, given the company’s solid business fundamentals, strong market positions and moderate financial profile. The BTSDF notes are trading at c. 94.5, yielding 10-16%. We view the notes as fairly priced, and maintain our “Hold” recommendation.

• C2Q23 revenue (1.9%)/2.6% vs. our estimate/consensus, its non-GAAP NI is 18.5%/18.3% higher than estimate/consensus. 1) GPM improvement from revenue mix ; 2) less than expected OPEX from IP licensing fee. 
• We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for-money, which bodes well for its long-term brand value. 
• We maintain Buy rating and maintain TP at US$26. We raise 2024 EPADS by 6.4% to project lower OPEX with efficiency improvement.

Borussia Dortmund’s headline (income statement) results for FY23 were ahead of management’s previous guidance and our estimates. The company enjoyed a year of recovery following the disruption of COVID-19 in the prior year and the first team enjoyed better sporting success than the previous season, although it fell agonisingly short of winning the Bundesliga. We will update our underlying FY24 estimates when the full financial statements are published at the end of September 2023 but, in the interim, we include part of the disclosed transfer profit on the recent sale of Jude Bellingham.

• On the 28th May, PRC department store play Golden Eagle Retail (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
• The Offeror is the Wang family, Together with concert parties, they control 80.29%. 7.18% of the remaining 19.71% of the disinterested stakeholders have given an irrevocable. 
• The Scheme Doc was despatched this morning (23 August). The Scheme Meeting is September 15th with expected payment on (or before) the 17th of October. The Offer price is final.

• El Niño & Southern Oscillation (ENSO) is a recurring climate phenomenon with adverse impact chiefly on agriculture causing volatility in grain production leading to price shocks.
• Shortening frequency of ENSO cycles and its intensity has increased due to global warming. Given its potency of causing shocks, ENSO now has an outsized influence on global economics.
• Considering El Niño’s impact on corn, expect production to decline next year as La Niña effects fade compounded by agri productivity declines due to higher temperatures & extreme weather.

• After spectating DG for some time, I bought a small starter position in June. It is not often that you get a chance to buy a compounder like this 35% from its highs.
• Historically it has paid to buy the dips on DG, so I figured I would buy now and ask questions later.
• This time it has not paid, at all. My average was ~$185 and I sold my stock last monday at $168. I know that some of my subs also follow the stock so I thought I would collect my notes and write up a few paragraphs.

• Perovskite solar cells have the potential to be more efficient and less expensive than traditional silicon solar cells.
• Recent research suggests that the global market for Perovskite PV could be worth around $12 billion in 2032
• If Sekisui Chemical were to take a 10% market share, then the potential impact on earnings could be 22%.

SJM Holdings’ H1/23 results were acceptable, as earnings improved in Q2 after a disappointing first quarter. Crucially, Grand Lisboa Palace continues to ramp up its operations gradually and the asset has achieved EBITDA break-even since June. That said, the company’s overall GGR market share remains meaningfully below its FY 2019 level.​ SJM reported slight positive EBITDA in H1, albeit we believe FCF was slightly negative after interest payments. The company’s profitability is likely to lag that of peers for the next 1-2 years.

We note that some investors are concerned about the economic slowdown in China, which could impact discretionary consumer spending (e.g. gaming and travel to Macau). That said, we believe the Chinese consumer market is large enough to sustain a continued recovery of Macau’s gaming sector. 

• There are concerns about the ability of female directors hired solely for the purpose of recruiting women directors without a reasonable director nomination process to demonstrate strength on the BOD.
• Board diversity issues were considered a low priority until more institutional investors voted against the top management of companies with zero female directors at shareholder meetings.
• Given the small population of full-time female employees and the relatively young age bias, it’s likely that even in 2030, most female board members will be relying on outside talent.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Etsy delivered an all-around beat in the previous quarter, with adjusted EBITDA margin and revenue increasing significantly.
• Their year-over-year growth rate was negative, but it increased sequentially.
• Etsy also observed healthy year-over-year growth in the number of new and reactivated buyers when bringing both groups together.

• DoorDash delivered a mixed result in its last quarter, with revenues above analysts’ expectations but failed to surpass the analyst consensus regarding earnings.
• The quarter saw an increase in international business as well as better unit economics.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Starbucks Corporation delivered mixed results in the quarter, with revenues below Wall Street expectations but managed a significant earnings beat.
• In North America, the company’s revenue growth was driven by strong same-store sales and operational improvements.
• Starbucks’ digital strategy, mainly through Starbucks Rewards, showed good growth, reflecting the brand’s strength in key markets.