Consumer

• Last week, shareholders of Seven & I Holdings (3382 JP) rejected all four of the board nominees proposed by ValueAct.
• ValueAct, seeing their higher vote count as a modest success, sent a letter to Seven & I, requesting a resumption of discussions despite the failed attempt to remove senior leadership.
• We think the company is unlikely to seriously consider Value Act’s proposals any longer, indicating the end of the investor activism campaign.

• FEMSA has placed c.€3.3 billion of Heineken NV (HEIA NA) and Heineken Holding NV (HEIO NA) shares and tap €250 million of existing 2026 Exchangeable bonds. The placement removes a major overhang.
• The holding structure (equivalence 1 HEIO NA ~ 1 HEIA NO) allows the Heineken family to control the second largest brewer worldwide, with just a 27.3% economic interest (post-FEMSA’s placement).
• The discount has tightened to 15.8%, still above the 10.4% average of the last ten years, and rather large considering such a simple structure.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Vedanta Resources
2. China Jinmao Holdings
3. Lifestyle International Holdings
4. Geely Auto
5. First Pacific Co

and more…

• The most important factor in increasing stock valuations is overseas investors, and a clue can be found in exploring what kind of companies they tend to invest in.
• It is a company with high cash holdings and a high growth policy score, i.e., a company that generates ample cash flow. This should be considered a necessary condition.
• As foreign ownership increases, shareholder returns such as share buybacks will also be implemented to review cash allocations and improve board practices, so these can be considered byproducts.

• Anycolor (5032 JP) IPOed a year ago, rose several-fold, saw the underwriting broker offer a huge target price, then it fell. There was an offering. And then the murders began.*
• The offering in January, discussed here, created overhang, and the stock fell sharply in the next 6 weeks. Blowout earnings came in mid-March. Along with a TSE Prime transfer application.
• Now we have the Prime promotion on 8 June, which leads to a TOPIX inclusion on 28 July. 

• Despite a recovery in Chinese retail sales, JD.com’s revenue growth slow-down has accelerated, losing market share to disruptive online competitors amidst ramped-up pricing pressure.
• Margin progression remains on track as JD.com refocuses on its core operations, optimizing its product mix and sales channels to improve operating efficiency.
• JD.com trades on only a 4.1x Dec-23f PE multiple when excluding its net cash balance sheet and associates at book value.

• Despite the enormous demand for Black Pink concerts and the expected launch of the new girl-group band BabyMonster, we believe shares of Yg Entertainment (122870 KS) have overextended this year.
• Black Pink remains a fan-favorite group and their contribution to sales and profits are likely to peak this year. Valuations for YG Entertainment is also unattractive.
• Although BabyMonster is likely to become popular, the higher probability scenario is for them to fall below expectations. We do not believe BabyMonster could become the next Black Pink. 

• Although listed companies are required to consider the interests of minority shareholders, parent-subsidiary listings should inherently be avoided because it’s difficult to reconcile conflicting interests between parent and its subsidiary.
• This case questioned whether the FamilyMart directors considered the interests of minority shareholders. The fact that fiduciary duty is scarce in Japan could have been a factor behind this case.
• This lack of understanding may also be a factor preventing independent directors from fulfilling their functions, as some CEOs are seen to consider independent directors as advisors rather than managers.

• Indonesia-based social commerce platform Evermos today announced that it had raised US$39 million in its Series C funding round.
• It was led by the International Finance Corporation (IFC) — a member of the World Bank group — and IFC Emerging Asia Fund, LP, managed by IFC Asset Management Company, with the participation of returning partners such as Jungle Ventures, Shunwei Capital, UOB Venture Management, and Telkomsel Mitra Inovasi.
• This funding round also saw investment from new partners SWC Global, Endeavor Catalyst, and Uni-President Asset Holdings.

• Kellogg managed an all-around beat in the latest quarterly result, with a 14% organic net sales growth and better-than-expected profit margins.
• The company’s operating profit showed solid year-on-year growth for the fourth consecutive quarter, and its cash flow and balance sheet remained strong.
• Kellogg raised its guidance for organic net sales growth, adjusted operating profit growth, and adjusted earnings per share, reflecting the strong performance in Q1.

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.

• Tata Motors ADR

• It was a challenging Q1 for Paramount Global, with total revenue of $7.3 billion and the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• Free cash flow in Q1 was a use of $554 million, aligned with expectations for negative free cash flow in 2023, but positive free cash flow is anticipated in the back half of the year.
• The company aims to improve earnings and free cash flow through franchise content, commercial execution, and operating efficiencies, targeting positive growth in 2024.

• It was a mixed first quarter for BorgWarner as the company reported double-digit organic growth and surpassed the revenue expectations of Wall Street but missed out meeting earnings expectations.
• The company’s free cash flow was impacted by planned capital spending to support the growth of its eProducts division, as well as working capital usage and annual incentive compensation payout.
• However, BorgWarner made significant progress during the quarter, securing multiple new eProducts awards and announcing capacity investments in this segment.

• At long last, Yashili International Holdings (1230 HK) has dispatched the Scheme Document. 
• The Court Meeting and EGM will be held on the 23 June. The IFA says the Offer is fair. At a ~160% premium to undisturbed, it certainly is. 
• Assuming the transaction gets up, payment will occur on or before the 13 July. 

• The Yashili International Holdings (1230 HK) scheme document is out with the court meeting scheduled for 23 June. The IFA considers the HK$1.20 per share offer to be fair and reasonable. 
• Key conditions include approval by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake should be supportive.
• This is a done deal. At the last close and for the 13 July payment, the gross and annualised spread is 1.7% and 15.3%, respectively.

• Tesla traditionally sells 50-60% of total quarterly sales in the last month—until now.
• Stubbornly high inventory levels signal that trend is at risk—along with ambitious market estimates for Q2
• June deliveries may track lower versus April+May and be down y/y. If so, Q2 deliveries may be little changed or even lower versus Q1 results.

• We tend to shy away from the restaurant industry but decided to make an exception for Tam Jai;
• The brand has become a household name in Hong Kong and delivers attractive business economics for owners from its home market;
• However, we see multiple red/yellow flags when it comes to the management’s capital allocation, particularly relating to overseas expansion.

• On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
• Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
• In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the local operations.

• Perfect Medical Health’s (1830 HK) share price correction seems overdone. News that COVID cases are expected to rise to over 65 million a week by June in China: the culprit.
• The stock presents an excellent opportunity to invest with a 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash. Such excessive pessimism in this name is unwarranted.
• Catalysts for the stock would be the FY23 March-end results to be declared on June 28th, 2023. 

• Water Oasis (1161 HK) H1 FY23 results were encouraging and a step in the positive direction as revenue/PAT improved by 27%/116% YoY ( although below our estimates by 10%/30%).
• The company paid a semi-annual dividend of 7 cents (9% annualized yield) for an 82% payout ratio. Net cash of 243 mn HKD represents 25% of market capitalization.
• The company has made several investments in new locations and spent heavily on advertising ( costs up 76% YoY); A positive inflection of trends will bear fruit in H2 2023.

• The concern that companies are only striving to develop formal systems and not improving the substance of their corporate governance is shared by the Council of Experts.
• A solution to avoid formal system development would be to increase the independence of the board to a level that cannot be cleared by a little matching of numbers.
• For effective engagement, management must be aware of the goal of “sustainable growth and expansion of corporate value” in order to communicate in the same language.

• JumpStart Coffee, an Indonesian startup that makes smart coffee machines, has raised an undisclosed amount in a series B round led by Cool Japan Fund and Living Lab Ventures.
• Founded in 2018, JumpStart specializes in manufacturing vending machines that can serve over 20 types of coffee and non-coffee drinks.
• The startup said it has installed 2,000 machines in the Greater Jakarta Area, Bandung, and Surabaya.

• Mondelez is one of the best-performing large cap consumer staple businesses, while also being a relatively low risk stock.
• Mondelez remains fairly valued and with that is offering a multiple repricing opportunity, according to a recent investment thesis.
• The company is offering several repricing opportunities for investors.

• Investment levels in BYD Company Limited H Shares have reached record highs among active Emerging Market funds.
• On a fund level, between 10/31/2022 and 04/30/2023, 22 funds opened new positions in BYD, led by Vontobel MTX Sustainable (+2.4%) and Putnam Emerging Markets (+1.95%).
• BYD has risen up the ranks to become the most widely held and largest weight in the autos sector, surpassing Kia Corp and Mahindra & Mahindra over the last 2-years.

• 1Q massive beat was driven by TEMU, higher-than expected take rates and other income, in order of importance. 
• We remain confident PDD’s China online marketplace business will face increasing growth headwinds, but also acknowledge that TEMU has been growing on track with lower-than-expected losses.
• Earnings growth from PDD’s domestic business will be largely offset by losses incurred by TEMU for 2023. Strong 1Q has not fundamentally changed deceleration trend of full-year bottom-line growth trajectory. 

• Challenger Technologies (CHLG SP) has disclosed a voluntary unconditional offer from Dymon Asia and the Loo Family at S$0.56 per share, a 1.8% premium to the undisturbed price (29 May). 
• The little to no offer premium will leave minorities aggrieved. Hitting the 90% compulsory acquisition threshold implies a minority acceptance rate of 31.3%. The offer has not been declared final.
• The offer is set to follow the recent SGX voluntary unconditional offer playbook – a lowball offer followed by declaring the offer final after a cursory bump.

• On May 4, GOLFTEC announced the launch of “SkyTrak+,” a premium version of the award-winning and No.1 best-selling consumer launch monitor, now offering tour level accuracy and performance at a price that is still only a fraction of the top-ofthe-line commercial-use product.
• Having largely completed the integration of SkyTrak business during the 1Q, the GOLFTEC ANYWHERE initiative is now going into full swing.
• Since our 4Q FY22/12 Follow-up Report, GDO’s share price has declined another 12.7%, the decline from the peak now equal to the -64% seen in the case 1 shown below. 

• Consumer electronics retailer Challenger Technologies (CHLG SP) has announced a voluntary unconditional cash offer of S$0.56/share. The Offer price has not been declared final.
• The Offeror is led by Dymon Asia Private Equity and Challenger’s CEO Loo Leong Thye, who collectively hold 54.37%. 
• Including other Loo family members and additional irrevocables, there is a high probability Challenger breaches the public float at the conclusion of the offer and be suspended. 

• The number of workers expected to be in short supply could further expand if parameters change, such as decrease in working-age population due to further decline in the birth rate.
• Even if the current foreign technical internship system relaxes the “no change of employer” restriction somewhat, changing the status of residence to permanent residence has not been points of discussion.
• Government has avoided discussions that lead to the acceptance of foreign nationals based on permanent residency and as a result, the problems of population decline and worker shortages have worsened.

• NFC Indonesia (NFCX IJ) provides exposure to Indonesia’s O2O ecosystem as a technology-driven digital product aggregator, FMCG supplier, and advertiser covering modern trade, general trade, and e-commerce. 
• The company provides screen-based iCloud-enabled indoor advertising across mini-markets and increasingly for general trade. This provides a high-margin recurring income base which only currently covers 50% of mini-markets currently.
• NFCX is the current leader in the 2W EV market in Indonesia through its Volta brand, with the most extensive battery swapping buildout, and with further capacity expansion to come.

• The index announcements regarding the the changes to indices following the Rakuten (4755 JP) offering have been a bit weird. 
• Some of that may have to do with timing. Some is just weird
• The result is that there is less to buy this week than I previously expected, and the buying gets dragged out longer.

• In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.
• We believe the company benefited from its low-price products and the low comparison base last year.
• We conclude the stock has an upside of 40% and a price target of US$100.

• The street is excited about Zomato (ZOMATO IN) ‘s profitability, we are not.
• Zomato’s execution is strong, driving improved profitability despite the margin-dilutive Gold offering.
• Caution warranted due to market dynamics: slow growth, margin pressure, and increased competition.

• PDD Holdings Inc (PDD US) shares rose 19% on last Friday following 1Q23 revenue of RMB 37.6bn (consensus: RMB 31.9bn) and OP of RMB 6.9bn (consensus: RMB 5.0bn).
• The declining margin trend is a significant concern as Pinduoduo won’t appear cheap if margins fall short of expectations.
• Meanwhile, the existence of Temu could be at risk if the US government takes measures to address the De minimis loophole.

• Universal Entertainment and Dynam Japan bave moved off total dependence on pure historic pachinko revenue flows as total market continues to slide.
• Universal’s move to the casino sector as a core profit center and Dynam’s strong hall closure strategy are keys to future of the sector.
• Dynam has been fighting off inflationary headwinds in opperating costs of their halls and sharp depreciation of equipment responsible for profit decline.

• PDD once again surprised by reporting revenue/non-GAAP net income 16.5%/68.8% higher vs. cons. We suggest the beat is  due to the moderate competitive landscape in 1Q23 and strong consumer demand
• Yet, we don’t expect PDD to be able to surprise again in 2Q23 because of the intensified competitive landscape, and its new ecosystem strategy;
• PDD remains a long run BUY as it’s a key beneficiary of the downward trend of Chinese and global consumption. We slightly raise our forecasts for PDD’s 2023 EPS.  

• Colgate-Palmolive had a good start to 2023, and delivered an all-around beat in the first quarter.
• There was a boost in the company’s projections for net and organic sales growth as well as base business earnings per share growth for the year.
• Colgate-Palmolive is facing headwinds with respect to its earnings per share growth given the impact of raw and packaging materials costs, foreign exchange, and below-the-line costs.

• Lear had a solid start to the year, with an all-around beat in the recent quarterly result.
• The management intends to start making full seats with essential thermal components for these vehicles.
• Besides, the company acquired IGB, which will be essential to growing its Thermal Comfort Systems business and boosting its market share and profits in the seating industry.

• Golden Eagle Retail (3308 HK) disclosed a scheme privatisation offer from the controlling family at HK$6.88 per share, a 40.4% premium to the undisturbed price (HK$4.90 on 22 May).
• 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. 
• The offer price is final. The offer is reasonable particularly as the sentiment on the department store sector remains weak. This looks like a done deal. 

• 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 – Rakuten (4755 JP) prices its offer, Tata Technologies (TATATECH IN), Growatt Technology (1833969D CH), JD Industrials (2231713D CH) IPOs.
• Event-Driven developments – Toyo Construction (1890 JP), Silk Laser Australia (SLA AU), Healius (HLS AU), Penguin International (PBS SP), Lian Beng (LBG SP).     

• PRC department store play Golden Eagle (3308 HK) has announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close. The price is final.
• 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. 
• Apart from shareholder approval, there are no key regulatory approvals to be obtained. 

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.

• Meituan
• Tata Motors ADR

• The lack of laws mandating female directors and the absence of specific numerical targets for ％ female directors in Corporate Governance Code have slowed the increase in % female directors.
• The lack of understanding of the value of ensuring diversity on the board on companies is serious, as only 9.1% of companies that disclosed skills-matrix adopted “diversity” as a criterion.
• It should be a catalyst for companies to understand the value of ensuring diversity on their boards, not merely numbers-crunching that a company only needs to hire one female director.

• Legacy concessionaire SJM needs a strong performance from its Cotai flagship to create positive cash flow to service debt and keep gains in mass market share.
• The company has closed 5 satellite casinos, a move that indicates a shift in strategic goals aimed at building out from its two IRs.
• Thus far, SJM has not fully participated in the  early Macau recovery cycle to make it a BUY but it needs to build on its 81% of mass revenue.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, HK market sentiment is likely to be put to test again with the upcoming listing for Growatt Technology.
• The REIT were once again at the front lines this week for placements, while Rakuten (4755 JP) has so far been holding up.

• Church & Dwight had a particularly robust Q1 as the company reported solid revenue growth of 10.2% and an all-around beat.
• The management exceeded its Q1 outlook with organic sales increasing by 5.7%, driven by more robust performance across multiple brands, including Hero, THERABREATH, ARM & HAMMER laundry, and ARM & HAMMER litter.
• With encouraging signs such as flat volume growth after a series of declines, the company’s team anticipates volume growth throughout the year.

• Sirius XM had a bad quarter and they failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
• Their launch of @SIRIUSXMSPORTS also enhances their social media presence and helps them to remain connected with subscribers and reach new audiences on Instagram.
• We give Sirius XM Holdings a ‘Hold’ rating with a revised target price.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Tata Motors’ ESG as “Adequate”, with “Adequate” Governance and Social pillars, while its Environmental pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• Etsy reported another strong performance and kickstarted the year with an all-around beat.
• With a roughly 11% increase in revenue to $641 million, the company’s adjusted EBITDA margin was once again very high at 26.6%.
• Etsy also witnessed strong trends in apparel, particularly in personalized and pop culture-related tops, tees, hoodies, sweatshirts, bags, purses, and gift goods.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Lenovo
2. Vedanta Resources
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• Comcast Corporation started off with 2023 on a mixed note.
• While its revenues and earnings were above Wall Street expectations, the total company revenue of $29.7 billion fell 4%.
• We give Comcast Corporation a ‘Hold’ rating with a revised target price.

• The last quarter proved to be a successful one for Keurig Dr Pepper.
• Their U.S. refreshment beverages segment performed exceptionally well, with share gains in multiple categories and significant market share growth for brands like Dr.
• Pepper.

• Domino’s Pizza had a mixed quarter.
• The company’s revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.
• In the first quarter, Domino’s international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

• Unilever made a good start to the year and delivered double-digit underlying sales growth that was above Wall Street expectations.
• The underlying sales growth was 10.5% in the quarter.
• Unilever made good progress in executing its strategic priorities, beginning with innovation and brands.

OPAP’s Q123 results demonstrated continued strong growth in revenue, helped by improvements to both the retail and online product offering, and profits, with the support of a more favourable macroeconomic background as inflation has declined. The ongoing rejuvenation of the gaming offer is leading to growing player engagement and frequency of use. Management’s unchanged guidance for FY23 looks well-supported. The valuation and dividend yield (9.1%) look attractive relative to the peers.

• Skechers delivered a good financial performance for the quarter, outperforming Wall Street expectations in terms of both its top and bottom lines.
• Additionally, Skechers made great strides in controlling its inventory levels, which fell 17% from the previous quarter.
• Furthermore, the company introduced its Skechers Plus loyalty program in Canada, the UK, Germany, and Spain during the first quarter.

• XPeng reported soft 1Q23 results, with topline of RMB 4.03bn, missing cons by (4.4%); GPM of 1.7% missing cons. and our est. by (4.5ppt)/(4.8ppt. 
• The 2Q23 guidance implies a QoQ recovery of 15.2%-20.7%, thanks to increasing order intake of the all-new P7i and recent channel transformation. 
• We maintain BUY. We cut TP to US$ 10 due to pressure amid intensified competition.

• VIPS reported C1Q23 top-line, GAAP operating profit, and non-GAAP net income 6.6%, 27%, and 31% vs. our est., and 5.6%, 20%, and 36% vs. cons.; 
• We expect VIPS profitability to remain steady given its relative immunity to competitor price competition, mainly due to its high apparel exposure, high member loyalty, and differentiated product sourcing strategy; 
• Given improving apparel demand and EPADS on share buy-backs, we maintain BUY and US$ 16.3 TP, implying 8.1x 2023 non-GAAP P/E.  

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.

• Golden Eagle Retail

• The decline in the working-age population is not merely a decrease in the number of workers; it causes a loss of dynamism in society as a whole.
• The “5-year rotational use of foreign workers without the assumption of permanent residency,” not immigration, is overshadowed by human rights issues.
• Besides the high cost of education, an increasing number of people are choosing not to marry, and it is necessary to create a society that respects diverse lifestyles.

• The Rakuten (4755 JP) offering is producing interesting analysis. My read on the telecom side is that things are better (or less bad) than they were.
• Longer-Term, I see the idea. Shorter-term, there will still be questions until there are not. However, there could be a lot of non-fundamental “I want this” demand in the offering.
• Questions to ask yourself are: 1) how much will get placed with investors who want it 20+% lower than 15 May highs? 2) how many shorts will cover?

• Dickson Concepts Intl (113 HK), an HK distributor of luxury goods, is a classic example of a Graham net-net with a >40% discount to NCAV (Net Current Asset Value). 
• The company has 4.7 bn HKD of cash against total liabilities of 2.3 bn HKD (on a market cap of 1.6 bn HKD), thus representing deep value. 
• With an economic environment in HK for retail sales improving + an existing 8% dividend yield, we could make a case for higher dividend payments.

• After reviewing Suzuki’s EV Strategy we turn Bearish on the outlook and see downside for the share price. 
• We believe that Street has missed the rising costs associated with the electrification strategy. We see a period of weaker margins. 
• Suzuki only targets 20% of sales to come from EVs in India, its largest market. It could be viewed as a laggard. 

• Manyo Factory IPO price has been finalized at 16,000 won. The demand ratio for this IPO among institutional investors was very high at 1,800 to 1.
• Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 85% higher than the the IPO price of 16,000 won. 
• We believe a premium valuation multiple to the comps is appropriate due to Manyo Factory’s higher sales growth rate, operating margins, and ROE than the comps in 2020 to 2023.

• The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
• Historically, these Rebalance events have had significant volume and ADV impact and they generally involve large cap names. 
• In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2023.

• It’s doubtful that if the outcomes of factor analysis of Berkshire Hathaway’s portfolio stocks and screened to Japanese stocks would be the stocks that Buffett would want to invest in.
• Berkshire Hathaway wouldn’t invest in a Japanese company if there were companies in other countries with the same type of business that are more competitive and worthy of investment.
• Investors continue to look for companies that few investors are aware of, as stock prices are often high for companies that have competitive advantages and promising future cash flow growth.

• Despite solid outperformance, share price of Xinhua Winshare (811 HK) is more than 100% covered by net cash of Rmb7.6bn. DPS has also risen uninterruptedly in the last 3 years. 
• 1Q23 result demonstrated operating resilience as recurring profit soared 48.5%. Its franchise in textbook publication and distribution stayed well protected, securing profitability outlook.
• We like XW’s boring businesses in the current depressed market. It trades on 4.5x PER with secured 6.6% dividend yield. The HA discount has widened to 10pp deeper than average. 

• Itochu, Familymart, PPI (Don Quijote) and their data analytics partners have come together in the first case of cross-retailer ad platform development.
• Itochu provides the central relationship that ties these companies together, and other deals are likely given the significant potential for retail media.
• The opportunity for brands to market to these retailers’ customers through highly targeted ads will become ever more compelling, delivering new revenue streams for Donki and Familymart.

• The odds are high for PDD to miss consensus for 1Q results this Friday due to high base and deflating domestic growth drivers, despite TEMU’s momentum.
• Among major China tech companies, PDD is likely to be the only one to register stagnant or even negative earnings growth for FY23, which has not been in the price.
• A down cycle for PDD’s earnings growth leads us to assign 12x P/E to an estimated non-GAAP net profit of RMB39 billion for FY23, implying 15% downside. 

• Since the January 6th end of zero covid, all macro developments impacting the Asia casino sector are proving bullish despite a lingering concern about long term recovery.
• SCL’s strengths play to the rapidly growing mass segment player base.
• SCL’s dominant room capacity is a de facto moat when peers are not even a close second in terms of percentage of available rooms.