Consumer

• Today, City index Eleventh, the corporate entity often used by noted activist Yoshiaki Murakami, announced (EDINET filing) they owned 1.756mm shares or 5.31% of Arcland Service (3085 JP) 
• In mid-April, Arclands Corporation (9842 JP) announced it would merge with 55%-owned restaurant subsidiary Arclands SHD. Murakami-owned 5+% of Arclands at the time. Then it sold 9842 and bought 3085.
• This looks like a confusing set of moves. It is not as confusing when you think about it. He is setting up something for later.

• Taste Gourmet (8371 HK) will report FY23 (March YE) results on June 23rd. Channel checks indicate strong momentum in Q4 Vs. Q3 FY23.
• Based on our estimates of 72/112 mn HKD for FY23/24e, the stock trades at 8x/5x FY23e/FY24e with a 7.6%/11.9% dividend yield assuming a 60% payout ratio.
• The company has 114 mn HKD of cash (20% of market cap), which is earmarked for restaurant expansion by 6-10 outlets and dividend payout (50-60% of earnings) in HK/China.

• The ramp-up in public housing supply in Singapore could be an opportunity for Kimly Ltd to fast-track expansion given its outlets, food-stalls are mostly located in public housing blocks. 
• Bigger F&B retail players like Kimly are better positioned versus others to weather the multiple headwinds faced by Singapore F&B retail sector today. 
• Upcoming 1H FY2023 results can trigger an up move in the stock if the company reports a meaningful margin recovery. Current undemanding valuations reflect heightened investor concerns.  

• We still recommend a tactical overweight to defensives (Staples, Utilities, Healthcare, and gold miners) as the SPX tests our 4165-4200 resistance range, and also resistance from the prior 1.5-month uptrend.
• As we await Wednesdays FOMC announcement, the DJIA and Nasdaq Composite are testing 1-year resistances at 34,280 and 12,300, the DXY appears to be inflecting higher, and breadth remains weak.
• While we still see a reach to 4300-4325 as possible, we believe playing for more upside is akin to picking up pennies in front of a steamroller.

• We believe JD’s growth rate will continue to slow down and its margin will continue to improve in 1Q23.
• However, we also believe revenue growth will recover from 2Q23.
• We set a price target of HK$256, implying an upside of 85%. Buy.

• Yerbaé posted full-year 2022 financial results that beat our estimates.
• 2022 net revenue came in at $7.2M vs. our estimate of $6.8M, representing 19% YoY growth
• Gross margin came in at 59% in 2022 vs. our estimate of 58%

• Philip Morris International’s Q1 results exceeded analyst expectations on the earnings front but were below par in terms of revenues despite some decent underlying momentum from IQOS, ZYN, and its combustible business.
• The company’s Q1 organic net revenues had solid growth.
• This highlights the ongoing strength of IQOS as a step-up in pricing but was somewhat mitigated by anticipated HTU inventory movement.

• Procter & Gamble delivered strong results and managed an all-around beat in the recent result.
• Pricing increased sales growth by 10 points, while mix had a marginally favorable impact on the quarter.
• Growth remained widespread across business divisions, with organic sales increasing in the company’s ten product categories.

• Alibaba (ADR) (BABA US) Cloud will cut prices for its elastic computing services using Arm and Intel-based chips by 15-20% and Nvidia’s V100 and T4 graphics processing units by 41-47%.
• It seems like the company is trying to combat increasing competition in the only way it knows how, by further subsidizing its already-subsidized cloud services.
• Price may not be the main reason for companies to avoid using Alibaba Group (9988 HK)‘s Cloud services. Government initiatives to nationalize the cloud-computing market could be a bigger factor.

• 4Q22 result beat and 1Q23 result was roughly in line
• Revenue growth to accelerate and margin to improve in 2023
• Long-Term targets remain unchanged and the valuation becomes attractive now

• Although many companies now disclose numerical targets in their mid-term management plans, only a few still use ROE or ROIC as numerical targets(15% 1,801 companies of Metrical Universe, March 2023).
• The fact that many companies that don’t include ROE or ROIC as KPIs indicates that the management wasn’t aware of the return  from the shareholders’ perspective or cost of capital.
• The 3-year mid-term business plan is built on the foundation of the actual project in progress and should be outlined to reflect its cash allocations and cash flow returns.

• Giant Biogene raised around US$70m in its Hong Kong IPO, after having downsized the deal and priced it at the low-end. Its six-month lockup will expire soon.
• GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Radico Khaitan (RDCK IN) had succeeded in getting de-leveraged to a strong extent,  as mentioned in our previous insight, Radico Khaitan Limited: On the Path of Getting Debt Free 
• The company has entered into the new capex phase and has accumulated some debt, the annual report F22 also highlights few irregularities on the forensic side.
• These include complex structure for land purchase, receivables provisioning, deviation between RoU and lease assets, etc. 

• Bajaj Auto Ltd (BJAUT IN) is optimistic about the future of their exports and expects a recovery in exports as a critical catalyst for the stock over the near term.
• The company’s EV endeavors in both 2-wheelers and 3-wheelers are expected to surprise on the upside, which can deliver upside than what is currently factored in.
• The stock also trades at undemanding valuations (16x FY25 consensus estimates), offering adequate comfort with an optionality of EV and Exports.

• Sheng Siong (SSG SP) management hinted at possible accelerated store growth referring to news reports about Singapore ramping up public housing to meet strong demand. 
• Singapore minister’s comment on public housing BTO projects under construction to increase to 150 in 2025 (from 100 currently) suggests a strong project pipeline in the next few years too.
• Muted 1Q2023 performance reported- decline in revenues and profits, yoy – in line with expectations as shopping ‘normalize’ post-COVID.

• We expect the consensus to increase their operating profit estimates for Hotel Shilla in 2023 and 2024 by as much as 10-20% in 2023 and 2024.  
• Higher earnings will likely be driven by Hotel Shilla winning new licenses to operate duty free at the Incheon International Airport and much better than expected profits in 1Q 2023.
• With improved momentum (both operationally and share price basis), we think that the Hotel Shilla (pref) could outperform Hotel Shilla (common) in the coming weeks. 

• Herbalife has a strong position in the wellness industry, with net sales of $5.2b in 2022 and a market cap of $1.46b.
• The company was founded in 1980, and it employs an estimated 9,900 people worldwide.
• First, the company has a strong brand name and loyal customer base, which can support long-term growth prospects for Herbalife Nutrition (NYSE:HLF).

• For the month of April, 6 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
• The average premium for the new deals announced (or first discussed) in April was 23%.
• This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

• Given the impact of inflationary headwinds encountered throughout the year, Constellation Brands’ financial performance was not up to expectations.
• The company delivered a 7% increase in net sales in the quarter which was below expectations along with a 3% increase in comparable operating income which resulted in an earnings beat.
• Constellation Brands achieved record net sales of $9.5 billion and equivalent operating profits of $3 billion for the year.

• There are 39 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals were discussed on Smartkarma this past week: Kirin (2503 JP)‘s Offer for Blackmores (BKL AU); First Pacific (142 HK) & Co’s Offer for Metro Pacific (MPI PM).
• Key updates took place for Invocare Ltd (IVC AU), AAG Energy Holdings (2686 HK), and Jiangnan (1366 HK) 

• AutoZone exited the quarter with normalized growth rates.
• It generated growth in domestic, commercial and retail same-store sales.
• Also, the retail transactions improved meaningfully for this quarter but were down 2.2%, while the commercial transactions were up.

• The rapid spread of companies, especially large companies, disclosing the skills matrix was triggered by Supplemental Principle 4-11-(i), which was added to the Corporate Governance Code.
• While more companies focus disclosure on skills matrix of directors, it’s questionable whether these criteria have been validated to select those who can help expand the value of the company.
• The process should ensure that the nomination process is based on the skills needed to run the company, not on who is close to the president of the company.

• Wynn Resorts delivered a disappointing result with wider than expected losses in the last quarter.
• Despite still suppressed international play in the quarter, the table drop of Wynn was up.
• Wynn is quickly advancing its planning for Wynn AI Marjan Island, the company’s integrated resort in UAE.

• Stock has become attractive at its still under the radar price.
• Nomura projects Singapore revenues are trending rapidly back to 90% of pre-covid levels.
• Adj. EBITDA of SG$774 (US$580m) for FY22—income attributable to holders up 85%

• Tissue-Maker Vinda International (3331 HK) closed down 6.4% yesterday, recovering from a 13.8% fall intra day.
• Vinda said its 1Q23 operating profit declined 85.4% to HK$65mn. Vinda also announced its controlling shareholder Essity (ESSITYB SS) will commence a strategic review of its 51.59% ownership.
• A long-term shareholder potentially seeking a possible divestment, shortly after a company announces poor results, is not a great look.

• We discuss the end of the mandatory lock-up periods for 46 stocks in Korea in May 2023, among which 4 are in KOSPI and 42 are in KOSDAQ.
• These 46 stocks on average could be subject to further selling pressures in May and could underperform relative to the market. 
• Among these 46 stocks, the top 6 market cap stocks include KG Mobility, Dongwon Industries, Hugel, Yunsung F&C, Enchem, and Jeio. 

• Adjusted net profit at China Education Group (839 HK) grew 15.1% in 1H23, accelerated from 5% in 2H22. We are delighted to see resumption of interim DPS at Rmb0.164.
• FY23 outlook will be underpinned by higher education student enrollment and tuition increase. Strengthened financial position offers opportunities for both organic and M&A growth.
• Potential upside will also come from completion of for-profit conversion at Jiangxi University of Technology. We consider its 7.9x PER, 1x P/B, 13.3% ROE and 5.5% yield attractive.

• Founded in 2018, Lionheart Studio (426630 KS) is a South Korean multiplayer online role-playing games developer for mobiles and PCs.
• The company’s game Odin: Valhalla Rising was based on Nordic mythology and was a huge success. Lionheart is planning to add more expansions to Odin.
• The company tried to go public in October 2022 on KOSDAQ however, it cancelled its listing plans due to negative market sentiments at the time.   

• We think the coffee price competition, mainly between Luckin and COTTI, is temporary, and will have little impact to Luckin’s gross margin. 
• We also think COTTI’s low pricing strategy is unsustainable, and its franchisees are keen for price hike.  
• We maintain the stock as BUY and maintain TP at US$41.

• Strong demand for Eicher Motors (EIM IN) ‘s Royal Enfield bikes with returning customers.
• The model “Hunter” is expanding the market and attracting a new set of customers.
• Royal Enfield entering a new growth phase with new launches and customer service focus.

• Our 2023 outlook, initially discussed in our January 6th 2023 Int’l Compass, was for $93 to cap upside on the MSCI ACWI (ACWI-US); this has again proven prescient.
• Since late-January/early-February we have recommended shifting to defensives, and MSCI ACWI defensive Sectors including Health Care (IXJ-US), Utilities (JXI-US), and Consumer Staples (KXI-US) are now hitting 3-4-month RS highs.
• With the ACWI-US just now starting to turn down after testing $93, we continue to recommend a tactical overweight to the aforementioned defensive Sectors, and also to gold miners (GDX-US).

We view Studio City as “Medium Risk” on the LARA scale. Our view considers the implied credit support from parent Melco Resorts & Entertainment (MLCO). We believe Studio City’s single-asset risk is mitigated by MLCO’s good management track record. The asset is well-located in Macau’s Cotai Strip, and is adjacent to the checkpoint connecting to Hengqin Island in Zhuhai. Studio City is positioned towards the mass-market segment, which is set to grow at a much faster pace than the VIP segment.

Our fundamental Credit Bias on Studio City is “Stable”. The company is poised to benefit from industry tailwinds, driven by the faster-than-expected recovery in gross gaming revenue (GGR) following China’s swift reopening. Moreover, its earnings may accelerate from H2/23, supported by the opening of Phase 2. Studio City does not have any debt maturities until July 2025. 

Controversies are “Immaterial”. Some ESG-compliant funds may be prohibited from investing in Studio City, due to the nature of its core business (casinos). That said, Macau’s gaming industry is established, transparent and highly regulated. We believe the curtailment of junket activities would help enhance operators’ transparency. Moreover, the authorities are seeking to reduce the city’s reliance on gaming and promote leisure tourism in the medium term. These factors should mitigate ESG-related risks. Overall, the ESG Impact on Credit is “Neutral”.

• ADEA has seen its stock price decline in the past month since announcing license agreements with two major NAND memory makers
• This could have put too much emphasis on the semiconductor side of the business even though it is purely additive to the business model
• The expected year over year decline in first quarter 2023 revenue is related to one-time license payment last year

• Fast Retailing (9983 JP) announced Q2 earnings two weeks ago. Revenues were good. OP was good. And the company raised full-year forecasts for Sales, OP, Pre-tax, and Net Profit.
• The stock popped sharply. It isn’t “cheap” but it is under-owned, actively. And revenues up 20%yoy is a very good look.  
• The Conundrum: the more active investors decide they like it, the more there is to sell. That creates interesting opportunities.

• Based on data to the close on 27 April, we do not expect any changes to the Philippines Stock Exchange PSEi Index (PCOMP INDEX) at the August rebalance.
• However, the Metro Pacific Investments Co (MPI PM) tender offer and voluntary delisting will open up an index spot that will need to be filled.
• At the current time, Bloomberry Resorts (BLOOM PM) is the highest ranked non-index constituent and is the most likely replacement.

• Japan’s Kirin Holdings (2503 JP) has proposed taking Aussie vitamin play Blackmores Ltd (BKL AU) private by way of a Scheme at A$95/share. 
• That’s a 23.7% premium to last close, and represents 23.1x LTM December 2022 EBITDA. 
• Irrevocables are 18% of shares out. This Scheme requires clearance from ACCC, FIRB – and China’s SAMR.

• Kirin Holdings (2503 JP) is eyeing the vitamin game with a proposal to buy Blackmores at AU$95 per share, representing a 23.7% premium over the stock’s most recent closing price.
• Blackmores Ltd (BKL AU)‘s expertise in navigating China’s stringent regulations could be the missing piece for Kirin to gain access to the lucrative supplement market in China.
• Our main concern is Kirin’s history of unsuccessful overseas business acquisitions, particularly outside of its core beer business.

• Alibaba Group Holding Ltd. slashed prices for its core cloud services by as much as 50% and offered free trials of some cloud products for as long three months, fueling competition in an already crowded market. 
• Through the price cut, Alibaba Cloud hopes to make the cost of its cloud services significantly lower than costs offered by other data centers
• The valuation of cloud companies is generally based on the price-to-sales ratio rather than the price-to-earnings ratio

• Today, JVC KENWOOD (6632 JP) announced earnings, its forecast for this next year, and the outlines of its new Mid-Term Management Plan.
• That plan has the run to 2025 seeing sales rise slightly, Operating margins rising slightly. EBITDA margins at last year’s level or better, and Operating CF like last year. 
• They also announced a buyback which they hoped would help them boost ROE and PBR to 1.0x as quickly as possible. The TSE pressure is working. 

• Blackmores Ltd (BKL AU) has entered a binding proposal with Kirin Holdings (2503 JP) at A$95.00 per share, a 23.7% premium to the undisturbed price (16 April).
• The offer is attractive. Marcus Blackmore, the largest shareholder, will vote in favour of the offer. Regulatory approvals should be forthcoming.   
• The scheme meeting is in July. At the last close, the gross and annualised spread for a late August payment is 0.8% and 2.2%, respectively.

• Tianneng Power International (819 HK) is a supplier of Chinese EV 2-wheelers and has enjoyed decent growth in the past few years. 
• The correlation of top-line growth with its customers suddenly turned negative, a warning sign.
• Is it really cheap at 0.6x PBV? Maybe not, given the current status and the lead time before the recycling business is fully operational. 

• This year, 26.4% of companies will hold AGMs on June 29. The trend will continue, with 1/4 companies holding AGMs on the day before the last business day of June.
• Electronic provision of shareholder meeting materials (3-4 weeks in advance) and electronic voting platforms for institutional investors progressed, mainly for prime market listed companies.
• The mismatch between supply and demand continues, with only 26.9% of companies providing English translations of business reports (materials for AGMs), a much-needed service for global institutional investors.

• GTX benefited from steady order rates and product mix in the first quarter allowing the Company to surpass initial expectations. Automakers have increased production levels as semiconductor availability has improved.
• For GTX, an expanded product offering beyond purely turbochargers is fueling revenue growth
• GTX reported sales of $970 million in the first quarter of 2023 compared to $898 million in the fourth quarter of 2022. The improvement in results was related to demand 

• Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
• We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
• There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.

• ZJLD Group (ZJLD HK) raised around US$676m in its Hong Kong IPO.
• ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
• In this note, we will talk about the trading dynamics and valuation.

• ZJLD Group (ZJLD HK) priced its IPO at HK$10.82 per share to raise net proceeds of HK$5.0 billion (US$636 million). The shares will start trading tomorrow.
• We previously discussed the IPO in ZJLD Group IPO: The Bull Case, ZJLD Group IPO: The Bear Case and ZJLD Group IPO: Valuation Insights. 
• We expect a muted debut as A Share baijiu peers have derated since the release of the prospectus. The shares remain attractive at the IPO price. 

• The removal of COVID-19 testing requirements for Chinese tourists is expected to increase tourist arrivals from the Greater China region.
• In addition, consensus estimates for Skylark Co Ltd (3197 JP) are increasing due to the company’s faster-than-expected same-store sales recovery.
• Skylark’s annual operating profit could reach ¥20bn if revenues return to pre-COVID levels, which is significantly higher than consensus of ¥5.2bn and guidance of ¥6.0bn.

• Blackmores Ltd (BKL AU) has signed a Scheme Implementation Deed with Kirin Holdings (2503 JP) for the acquisition of 100% of Blackmores by way of a scheme of arrangement.
• The A$95/share offer is a 23.7% premium to the last close and is at least a 20% premium to most other VWAPs.
• Blackmores Ltd (BKL AU) intends to pay a fully-franked special dividend of A$3.34/share. This will enable eligible shareholders to benefit from franking credits of A$1.43/share.

• We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. 
• Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
• In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.

• Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. 
• The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
• While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.

• CA reported 2QFY09/2023 results today. Revenue increased 2.4% YoY to ¥195.6bn (vs consensus ¥191.0bn) while operating profit declined 27.0% YoY to ¥18.8bn (vs consensus ¥18.0bn).
• The viewership for AbemaTV has fallen back to pre-FIFA levels and revenue growth from AbemaTV has been on a declining trend.
• CA didn’t release any gaming titles despite mentioning about 3 for 2022. The company has mentioned about 2 titles for FY09/2023 and the segment seems struggling with producing hit titles.

• Shakey’s Pizza (PIZZA PM) came in higher than analysts on earnings for FY22, posting an 873 mn peso bottom line number (vs. a 728 mn peso Bloomberg consensus).   
• Systemwide sales grew 101% YoY to 14.1 bn pesos, with 4.5 bn pesos in the last quarter, up 113% YoY. Excluding Potato Corner, growth for the year was 37% YoY.
• Based on their guidance for FY23 of 20% growth on the topline/bottom line, the stock trades at 13.7x FY23e PE with future growth in the mid-teens CAGR. 

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.

• Country Garden Holdings Co
• Tata Motors ADR
• Xiaomi Corp

• CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO. 
• CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally. 
• In this note, we talk about the positive aspects of the deal.

• Shimano reported Q1 results post close. Operating profit fell 26% YoY and full year guidance was cut 21%
• We believe that sales in 2023 have simply reverted back to trend. We expect sales to grow in 2024 as underlying demand drivers remain intact
• With the stock down 9% over the past year, we believe the market has discounted the profit revision. We see good value at 17x EV/EBIT

• Lalatech Holdings Co Ltd (LALA HK) is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.
• The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.
• Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.

• With three trading days left in the review period for the CSI 500 Index (SH000905 INDEX) June rebalance, we forecast 50 changes at the close on 9 June.
• There is a big sector skew in the potential changes. We estimate a one-way turnover of 10.77% at the June rebalance resulting in a one-way trade of CNY 6.28bn.
• The potential adds have outperformed the potential deletes but there has been a big selloff in the last couple of weeks as the market has headed lower.

• Wynn’s issuance of US$600m in convertible bonds for its Macau subsidiary pushes out maturities by five years, easing investor concerns about debt levels.
• The Macau gaming market is in early stages of pent up demand recovery compared with Las Vegas which is in a mature stage of the cycle.
• Premium mass and VIP customers key to Wynn Macau business model are returning at a faster rate than industry observers have judged. Decline of junkets not hurting VIP in 2023.

• The census and statistics department data for watches and jewelry showed a sharp rebound for HK in Jan-Feb 2023 (up 63% YoY). China sales, we estimate, continue to be resilient.
• Over the last month, secondhand watch pricing has also shown an uptrend of 3-4%. This leads us to believe that demand is having a decent uptick in April. 
• The stock trades at 7.2x PE FY23e, with >50% of the market capitalization in cash and a 15% dividend yield (assuming a 100% payout ratio). 

• As statements of reasonableness are disclosed with respect to subsidiary listings that are less than reasonable, further elimination of parent-subsidiary listings is expected to progress.
• The issue of parent-subsidiary listings will to come under further scrutiny, as no fundamental solution can be expected even if formal system for ensuring independence of a subsidiary is established.
• Extending disclosure to affiliate relationships is a commendable step forward not only for minority shareholders of dependent companies, but also for shareholders of the listed parent company.

• CPF Global Food Solution (2247162D TB) is looking to raise around US$1bn in its upcoming Thailand IPO. 
• CPF Global Food Solution (CPFGS) is a subsidiary of CP Foods Group, offering food products and services to food operators and consumers locally and internationally.
• In this note, we talk about the not-so-positive aspects of the deal.

• The latest release of the USDA Rice Crop Outlook Report (April 13) provides useful data on the global and US rice markets, which has implications for the rice-related businesses within Ricegrowers Limited, trading as SunRice (ASX:SGLLV).
• The global rice market is forecast to see the second consecutive year of demand exceeding supply (due mainly to supply issues), with global-ending rice stocks expected to be the lowest since 2017/2018 and equal to just four months’ demand.
• Prices for most grades, as a result, remain at record highs (US-medium-grain, which is a proxy for Australian grades) or trending higher in recent months (including Thailand +4%-5% and Vietnam +7%). 

• Sleep Country is Canada’s largest specialty mattress retailer with an estimated market share of 37% as of 2022.
• The company has a coast-to-coast retail network of 289 stores supported by 20 warehouses.
• In addition to being the leading brick-and-mortar retailer in Canada, Sleep Country also owns e-commerce mattress and accessories brands such as Endy (bed-in-a-box), Hush (weighted blankets), and Silk & Snow (bed-in-a-box).

• Oriental Land (4661 JP)’s revenue in 4QFY23 could miss consensus by around 12%, but its profitability could exceed consensus expectations by around 20%.
• The shares did not react to beating consensus and revising up its guidance in the last quarter. This suggests limited upside risk for the company’s shares following 4QFY23 earnings.
• Despite consensus medium-term OP estimates, Oriental Land appears to be significantly overpriced, with shares trading at a consensus FY27 EV/OP multiple of 33.4x.

• Mercedes is a luxury brand with strong pricing power, well positioned to capture growth in EV as it invests significantly to transition into an all-electric, software-driven world
• The launch of several models in the next few years will drive growth, as we believe the desirability remains very strong. 
• We like the direct sales model and believe the operational focus and discipline of the Company are still to pay off. The valuation remains appealing at a P/E below 6x.

• JD.com had a successful year in 2022, achieving high-quality growth and surpassing 1 trillion RMB in full-year revenues for the first time.
• Despite external challenges, the company was able to maintain high-quality operations and record the highest-ever profitability for the year.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Kroger had a mixed Q4 and failed to meet the revenue expectations of Wall Street given the shifting customer preferences due to inflation and macroeconomic uncertainty.
• The company observed total household growth and improved customer loyalty, with higher-income households growing by 1.1 million.
• The company’s end-to-end fresh initiative led to noticeable growth in both fresh and total store sales, and Kroger will continue innovating to enhance the fresh experience and drive customer satisfaction.

• ZJLD Group, a founder-led baijiu company, backed by PE firm KKR priced its Hong Kong IPO at HK$10.82/share. ZJLD Group shares are expected to start trading on Thursday, Apr.27.
• The company’s IPO price implies a market cap of ~$4.6B, making it the Hong Kong’s largest IPO this year. Goldman Sachs and China Securities International acted as joint sponsors. 
• Baijiu is the world’s most consumed liquor and accounted for ~70% of the alcoholic beverage market in China in 2021. Baijiu has a history of more than 5,000 years.

• Matahari Department Store (LPPF IJ) 1Q2023 results reflected a normalization of sales growth at a sold +14.2% YoY, with normalisation of rentals plus minimum wage increase impacting margins temporarily.
• The company has resumed its store openings with seven new stores in 1Q2023 and 12-15 new stores planned for FY2023. New merchandising campaigns have made a strong impression in 1Q2023. 
• Matahari will launch its new Suko brand in May in 20 stores plus 2H2023 will see its new modern format being rolled out. Valuations are attractive with a double-digit yield.

• Despite Shangri-La Asia (69 HK)‘s good share price performance YTD, it has still not yet fully reflected the strengths of and benefits from China’s re-opening. More upside to come.
• Occupancy for Hong Kong and mainland China has surged 30-45pp YoY in Mar, and with China’s RevPAR for FY22 is down 56.5% from peak, we see massive rebound in profitability.
• Share of China’s EBITDA was US$258m in FY22, from US$465m in FY16-19, suggests good room for recovery. It is cheap on ~70% discount to revalued NAV, vs. 37% in FY18.

• Share buybacks are likely to increase considerably in FY2023. One of the reasons for this is that the TSE has requested companies with stagnant stock prices to disclose improvement measures.
• More important than the amount of share repurchase is how much ROE increased as a result. Whether shareholder returns were adequate for cash reserves and cash flow should be examined.
• While Japanese companies today are in a cash cow situation as a whole, they are very cautious about investing aggressively.