Consumer

• Alibaba Group (9988 HK) announced yesterday that it is seeking to change its listing status in Hong Kong to a primary listing before the end of 2022.
• With the risk of de-listing from the US, a dual-primary-listing in Hong Kong would allow Alibaba (ADR) (BABA US) to smoothly transition all its trading from the US to Hong Kong.
• In addition, the company could possibly use this opportunity to raise more money from capital markets as it is desperately seeking funding for its loss making ventures.

• Expectations are spreading in the market that the free-float rate of LG Energy will increase from 9% to 15% at the MSCI August QIR. However, this possibility is quite low.
• Only 1.57% will be reflected in this QIR, and 4.26% will be in November. So, the August IR will see 0.59x ADTV, and the November IR will welcome 2.93x ADTV.
• A conservative approach is still valid for flow trading on LG Energy for now, and a more aggressive approach is needed with long/short trading with LG Chem.

• Sula Vineyards (1332009D IN) is looking to raise about US$175m in its upcoming India IPO. The deal will be run by Kotak, CLSA and IIFL Securities.
• Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”. 
• Currently, it produces 56 different labels of wine at four owned and two leased production facilities located in the Indian states of Maharashtra and Karnataka.

• Matahari Department Store (LPPF IJ) reports another positive set of results confirming the success of its ongoing transformation with the promise of an even stronger quarter ahead.
• Footwear and menswear continued to lead but womenswear, cosmetics, and babywear were also strong, with private labels Nevada Sports, Nevada Denim, Coles, and New Connections booking vibrant sales.
• Matahari Department Stores omnichannel initiatives are bearing fruit with another marketplace soon to come on stream whilst store opening and renovations will accelerate 2H2022, helping to drive growth.

• Pepperfry (0096696D IN) is one of the largest furniture and home decor marketplaces in India. Recently also started offering appliances to serve as a one-stop home shop. 
• Our channels indicate higher AOVs and different customers compared to Swedish giant IKEA. Marketplaces like Pepperfry solve the problem of discovery for customers looking for furniture in a new location. 
• The WFH tailwind is fading away. With revenues declining, profitability is distant, and with the financial position that is yet to improve caution is warranted.  

PT Metrodata Electronics, Tbk (MTDL:IJ), publicly listed company on Indonesia Stock Exchange since 1990, is a Digital Solution Provider and Technology Innovator in Indonesia that leads and enables the digital economy hub. MTDL builds strategic alliances with world-class ICT companies. The Company has two main business units, including Distribution Business (providing World-Class ICT Hardware and Software) that handles distribution through Omnichannel to partnered dealers (both offline and online) and ICT solution companies, as well as runs an e-commerce business (e-catalogue for Government/B2G). Its Distribution network covers more than 150 cities in Indonesia and has more than 5,200 channel partners and more than 100 world-class IT products and service brands. The second business unit, Solution & Consulting Business, is a digital solution provider that provides a complete range of ICT solutions based on Metrodata’s 8 Pillars of Digital Solutions, which consist of Cloud Services, Big Data & Analytics, Hybrid IT Infrastructure, Security, Business Application, Digital Business Platform, Consulting & Advisory Services, and Managed Services to support digital business transformation, for Enterprise, Corporate, SME, and Public Sector segment.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• China started mulling an expansion of its Stock Connect relationships in late 2021 with plans to allow GDR issuance in Switzerland and eventually Germany.
• New GDR issuance rules came into effect in February and companies started planning to issue GDRs in Switzerland in March.
• The new SIX Listing Rules went into effect 25 July. Two companies priced GDRs on 22 July and two more yesterday. US$1.5bn so far. There are 6 more near-term.

• Shimano’s stock price has declined by 25% year to date on expectations that bike sales will soon start going downhill
• We model a GFC-style recession and find that Shimano’s valuation has already reflected the worst case scenario
• If we are heading for a collapse, then Ferrari N.V. (RACE US) should be acting more like Shimano. The valuation discount between the two is as wide as ever

• With a dominant presence on the Las Vegas strip as recovery revenue ballast, MGM is seeing recovery in its US regional properties, growth in digital and news flow from Asia.
• The company’s BetMGM sports betting partnership with UK giant Entain is thriving. It ambitions to buy out its partner, or its partner’s parent are clear.
• As Macau slowly reopens its long awaited recovery arc will be positive news flow in Q3 and Q4 for MGM due to its two property footprint there.

• China Education Group (839 HK) has retreated 23% from recent high with no regulatory and company news. Given its secured earnings growth outlook, we see an opportunity. 
• We believe drivers are higher enrollment and tuition, further capacity growth, good progress in overseas education and light capex. There are positive developments in these aspects recently. 
• CEG may return unused share buyback funds to shareholders via dividend, suggesting a potential resumption of payout. At just 5.7x PER for FY23F, its growth prospect is undervalued.

• Faraday Future (FF) announced that it has delayed the Q3 2022 launch of its first EV and is “continuing to engage” in fundraising talks. 
• FF says it needs $325m to last through the year or 47% of its market cap. A PIPE deal could be underway, albeit the 8-K filing was cautiously worded. 
• Depending on the agreement, it may pave the way for the recently deposed founder to place a crony on the Board, which could be negative for future funding. 

• Dufry and Autogrill agree an all-stock deal (0.158 DUFN SW x 1 AGL IM) to create a travel-related concession giant. The Benettons will become the largest shareholders (c.25%).
• The deal should bolster Dufry’s balance sheet and add scale, helpful in tenders. Shareholders of Autogrill seem to be the main beneficiaries of the deal.
• As per the terms, spread on all-share is 14% premium, while that on cash alternative is 0.2% premium. Only a recovery of Dufry’s share price would justify opening a position.

• Nitori attributed the missed profit guidance to foreign currency forward contract approach changes a few years ago, which resulted in missed foreign currency projections.
• Since Nitori changed its FX forward approach several years ago for a reason, it’s concerned about the impact on Nitori’s business if it were to return to its original approach.
• The approach of relying on the market views of Mr. Nitori is not sustainable. The biggest challenge, the Succession problem, adds to the risk of finding a market genius.

The Europe HY Trade Book for July 2022 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

• Alibaba Group (9988 HK) currently has a Secondary Listing in Hong Kong and is looking to become dual primary listed in Hong Kong and the U.S.
• The main change will be inclusion in the Southbound Stock Connect program where mainland investors will be able to buy the stock.
• Alibaba Group (9988 HK) is capped at 8% in the HSCEI INDEX and is close to 8% of the HSI INDEX, there will be negligible impact on the dividend futures.

• Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure of physical stores and robo shops.
• The company also issued a profit warning last week for 1H2022 that was severely impacted by the spread of Covid-19 as well as business expansion related costs.
• We expect the company’s aggressive overseas expansion strategy to continue to impact the company’s profitability and there is further downside.

• Shenzhen Pagoda Industrial (1317437D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO. 
• Shenzhen Pagoda Industrial (SPI) is a fruit retail operator in China. According to Frost & Sullivan, it ranked first among all fruit specialty retail operators in China in 2021.
• However, the firm operates in a highly fragmented industry with low market share of 1.0%, even as the largest player. 

• We believe Alibaba’s revenue growth rate will reach historical low in 1Q23, but it will recover two quarters later.
• Alibaba’s stock price fell from HK$300 in October 2020 to HK$100 today.
• We believe Alibaba has at least an upside of 43%.

• IPAR continues to demonstrate the strength of the consumer’s willingness to purchase fragrances the Company develops
• IPAR announced Q2 sales of $244.7M compared to our forecast of $198.0M. The strength in the quarter was notable in the USA while the European segment had a small lift
• IPAR taking over the Donna Karan and DKNY brands should lead to greater sales performance in the second half of the year

• Lotte Confectionery’s screening period for the upcoming rebalancing will be July 20 to October 31, with an increased number of listed shares resulting from the merger.
• To fail inclusion, it must fall below Hyundai Greenfood. There is a market cap gap of ₩300B, suggesting the possibility of inclusion in December is quite high.
• Lotte Confectionery may benefit from concentrated flow from an early stage, given that the outline of inclusion/exclusion candidates for the upcoming rebalancing is still relatively vague.

• BYD (1211 HK) is a short on upticks near the gap and physical resistance for a decline to pressure intermediate support at 240 (break expected).
• Sell volumes spiked on the jolt down with sellers waiting overhead on a secondary bounce attempt.
• RSI shows a compelling bearish set up after topping at the 70+ sell zone with bear divergence that supports a downside surprise.

• At last Friday’s close, the Amorepacific Group (002790 KS) stub deserves our attention as it is in a diversion at a -1.58σ on a 20D moving average.
• Recent valuation trends and institutional flows also do not show anything unusual. So the current diversion between them should be seen as a temporary distortion.
• Amorepacific reacts more sensitively than AmoreG in the event of a lower-than-expected result on the 2Q earnings release. So now may be the right entry time to target reversion trading.

• Supersized profits in the game division will of course normalise, but there are strategies to extend profits in the segment
• At 7x EV/EBITDA we think the market has become too pessimistic on the long-term outlook for not only games, but also internet advertising and media
• The company will release Q3 results in three days time – we expect a them to beat consensus 

• Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.
• Online game’s revenue and players decreased for the first time in 14 years.
• NetEase set up the second game studios in the United States.

• The fact at least 80% of votes are approved in company agenda shows how large the presence of ruling shareholders is and how little interest there is from ordinary shareholders.
• The ruling shareholder structure with cross-shareholdings has made this watered-down for Japanese companies. Companies should strive to increase shareholder interest. To this end, information disclosure efforts must be promoted.
• Companies are encouraged to make efforts to disclose sufficient information to shareholders, not after AGM, but before it, which is the highest body of the company in the first place.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• There were no major IPO launches during the week. Thai Life will list early next week
• There were no major placements apart from ANZ and a smallish one in Xtep. There are two major lock-up expiries coming up.

• We have long been fans of this company due to its record of sound management decisions and asset allocation moves to expand steadily against demand.
• Six month results support our thesis that ASEAN casinos that have reopened are re-ramping revenues apace as Macau remains dead pooled by Beijing zero tolerance covid policies.
• At its current price we see mounting sentiment to the upside as sequential earnings improvements y.y can be expected in Qs 3 and 4.

• General Mills had a decent start to 2022 and its last quarter was another all-around beat.
• Most of the media spend is now digital and General Mills is leveraging the same to build a solid databank that can be helpful in improved customer targeting.
• We provide the stock of General Mills a ‘Hold’ rating with a revision in the target price.

• McCormick had a disappointing quarterly result as it failed to meet Wall Street expectations despite the fact that its revenues showed both volume and pricing growth.
• The growth of the company in flavor solutions was decent but supply chain and high-cost inflation are continuing challenges for the company.
• In EMEA, McCormick continues to have a robust share performance in most markets and categories.

• Walgreens Boots Alliance is off to a strong start to the year with growth in first-quarter sales and adjusted earnings, a performance that was beyond Wall Street experience.
• The company had a particularly strong quarter online, which includes purchasing online pickup in-store.
• We provide the stock of Walgreens Boots Alliance with a ‘Hold’ rating with a revision in the target price.

• On the 25 April, PRC dairy farmer Lanzhou Zhuangyuan Pasture (1533 HK) announced a Conditional Cash Offer for all its H-shares at $10.89/share. 
• This two-step voluntary cash offer incorporated a Scheme-like vote and a 90% tendering condition. 
• Shareholders voted for the transaction on the 29 June. The tendering condition has now been satisfied. The last day of trading is on the 1 August.  

• We are seeing some positive signals that suggest the lows for this bear market may have already been established, or at the very least, that downside is limited from here.
• Still, YTD downtrends remain intact on the global MSCI equity indexes, and we need to see reversals of their downtrends in order to get more constructive at the index level.
• Cyclical Growth Sectors continue to gain momentum and we are upgrading the MSCI ACWI Technology, Consumer Discretionary, and Communication Services Sectors from underweight to market weight. Add exposure.

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~US$0.46bn, split (+US$0.36bn) for Shanghai and (+US$0.1bn) for Shenzhen.
• The largest inflows were into Tencent (700 HK) and BYD (1211 HK). The largest outflow was in Pop Mart International Group Limited (9992 HK) and Great Wall Motor (2333 HK).

• Snap had yet another earnings related meltdown as management has lost all credibility in forecasting its business. 
• Because co-founders Spiegel and Murphy have 99.5% voting shares, there is not an opportunity for an activist to fix the situation like Pinterest and Twitter.
• The issues plaguing Snap are likely not hurting META as much given a broader ad base, better ROI on its ads, and a mgmt team that has already guided down.

• Amid a major decline in the Korean stock market (KOSPI down 19.6% YTD), one of the best outperformers has been Kia Corp (000270 KS) which is down only 2% YTD.
• Kia Corp is well poised to continue to outperform KOSPI in the next 6-12 months, mainly driven by its increasing market share for EVs globally and cheap EV/EBITDA valuation multiples.
• The company also reported outstanding 2Q 2022 results, which should boost near-term sentiment on the stock. Kia Corp plans to launch its flagship EV9 model (large sized SUV) in 2023.

• CarMax had a decent start to the 2023 fiscal and generated total sales of $9.3 billion in the first quarter, up 21% from the previous year’s period.
• Total unit sales in their retail division fell by 11% in the first quarter, and used unit comps dropped by 12.7% from the same period in 2017.
• The same broad macroeconomic factors that contributed to a market-wide decline in used car sales during the quarter drove CarMax’s performance.

• Carnival Corporation continued its recovery story from the pandemic and delivered a decent quarterly result by restarting 20 more ships, using 74% of its fleet’s capacity for guest cruise operations throughout the entire period.
• The company currently operates guest cruises with 91% of its fleet’s capacity which is a very positive sign.
• Regarding the ships in operation, occupancy for the second quarter was 69%, a significant improvement over the first quarter’s 54%.

• Emperador (EMI SP) started trading on the SGX (SGX SP) on 14 July and so far meets all criteria to be included to the FTSE Straits Times Index (STI INDEX).
• However, it is still a borderline inclusion on free float, market cap and liquidity and will need to pass all three criteria to be added to the index in September.
• If added to the STI, the inclusion will take place on the same day as the potential inclusion of Emperador (EMP PM) in the FTSE All-World Index.

• Group Success Investments is looking to raise up to US$133m by trimming its holdings in Xtep International (1368 HK).
• We can’t say that the deal is expected and short interest on the stock hasn’t been creeping up as well. 
• While the deal won’t be a large one, representing just 5.7 days of three month ADV, the firm’s last deal hasn’t done well.

• Tesla beat both our estimates and the Street’s by a wide margin, but the earnings call had some cautiousness regarding order backlogs, production ramps & 4680 cells.
• Tesla sold 75% of their Bitcoin holdings at a gain in Q2, which largely accounts for the earnings beat. It is also a sign of larger cash needs than expected. 
• The stock was only +1.5% after hours and it was noteworthy that the biggest Tesla bull on the Street said this huge beat wasn’t a “step change” to consensus. 

• On 30 June 2022, Sanrio reached a five year licensing deal with Alifish, which will cover Sanrio’s cast of popular characters including Hello Kitty and Kuromi in China.
• In July 2020, Shintaro Tsuji (founder of the company) handed over control of Sanrio to his 31 year old (as of 2020) grandson Tomokuni Tsuji.
• Despite the longevity of Hello Kitty as well as the recent partnership with Alifish (Alibaba’s subsidiary) to expand its business in China, we remain concerned with Sanrio’s lofty valuation multiples.

• On 3rd June, Fraser & Neave (FNH MK) announced it sought to take Cocoaland (COLA MK) private by way of a Scheme at RM1.50/share, a 26.1% premium to last close.
• Board support was received on the 15 June. The Explanatory Statement is now out with a Court Meeting to vote on the Scheme to be held on the 18th August. 
• Management-Backed Leverage Success, the largest shareholder with 40.65%, has given an irrevocable to vote for the Scheme. This is done with payment late-October. The IFA says fair and reasonable. 

• Sanrio (8136 JP) , the company behind Hello Kitty, has bounced 12% since striking a deal with Alibaba’s IP licensing platform Alifish to produce and sell merchandise of 26 characters.
• This seems like a way to combat copyright infringements. However, we are sceptical that this agreement could stop cheap counterfeits from entering the market.
• Sanrio badly needs a revival. However, history is not on the company’s side as they have been trying to revive the business over the last 20 years.

• Alphyn Capital Management LLC (“ACML”) is a registered investment advisor in New York. We help clients invest in high quality public companies to both preserve and grow their wealth over the long-term.
• The Master Account, in which I am personally invested alongside SMA clients, returned -14.7% net in Q2 2022, as reported by our fund administrator.
• With the threat of increasing rates, investors have renewed their focus on profits.
• I try not to take a position on a discrete event, such as interest rates or quarterly earnings, as the odds of getting these right are too low, and the costs of getting these wrong are too high.

• Mayar Capital provides investment management services to institutions, family offices, and high net-worth individuals.
• For the three months ending March 31, 2021, Mayar Fund (Class A) was down 6.6% net of all expenses and fees.
• Several of our SMA clients have chosen to switch their investment to the Fund, so we expect Fund assets to increase to approximately $170 million once the transfer is complete.

• The CAC of China said on Thursday that it has fined the country’s ride-hailing giant DiDi Global (DIDI US)  with RMB8.03bn (US$1.2bn) for violating data protection rules since 2015.
• According to their findings, Didi had been illegally collecting its users’ information which has been used in a manner which had endangered national security.
• In addition to the above fine on the company, CAC also has imposed two fines of RMb1m each on Didi’s Chief Executive Cheng Wei and President Jean Liu.

• PT Metrodata Electronics remains one of the key enablers for the digital economy and overall digitalisation of corporate Indonesia through both providing hardware, software, solutions, and consulting services. 
• The key driver for its ICT distribution comes from PCs, laptops, smartphones, and gaming whilst its solutions and consulting business is driven increasingly by the formation of digital banks.  
• PT Metrodata Electronics is benefitting from increasing mobility, which has started to boost its higher margin solutions and consulting business. Valuations are attractive and it’s in a net cash position.

• On 19 July, Cooke, the spurned suitor, increased its stake in Tassal (TGR AU) to 10.49%. The average price to build the 10.49% stake is A$4.14 per share. 
• Cooke also hired Phil Wiese, the former CEO of Huon Aquaculture (HUO AU), as a MD in Canada. Mr Wiese is well qualified to run Tassal should Cooke acquire it. 
• With shareholders happy to sell to Cooke despite the Board’s assertions that the previous bid undervalued Tassal, a new offer will force the Board to engage.

• Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
• According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare. 
• In this note, we will talk about the positive aspects of the deal.

• The independent advisor considers Fraser & Neave Holdings (FNH MK)‘s RM1.50 offer for Cocoaland Holdings (COLA MK) fair as it falls within its valuation range of RM1.21-1.66 per share.
• The key conditions are the headcount test and <10% rejection from all disinterested shareholders. The shareholder with a blocking stake has provided an irrevocable. 
• We continue to think that offer is attractive. At the last close and for the end of October payment date, the gross and annualised spread is 1.4% and 4.8%, respectively.

• Netflix’s quarter was modestly better than reset bearish expectations…but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.
• Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long. 
• Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.

• Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).
• We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).
• Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises’ current valuation multiple. 

• The proxy fight between Faraday’s founder and its Board has heated up further, with the founder making two 13D filings to the Board in just 3 days. 
• The founder wants to replace a certain Board member with a candidate of his choice and said he has third party investors willing to inject $100M+ if the Board agrees. 
• The Board never replied and this shows how tight the cash crunch at Faraday has become. Q2 cash should come to only $60M, or roughly 1 month of operations.

• Maintain BUY recommendation for CENTEL with a target price of Bt49.0. We expect the company performance to turn a profit at Bt57m in 2Q22 from Bt44m loss in 1Q22
• Strong recovery in hospitality business. We expect hotel revenue to hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels
• Food revenue is expected to hit 11 quarter high at Bt2.9bn (+24%YoY+11%QoQ) as we anticipate continuing SSSG at 6.1% compared with 0% and 10% in 2Q21 and 1Q22 respectively. 

• Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
• According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare. 
• In this note, we will talk about the not-so-positive aspects of the deal.

• Since Bloomberg reported that Elliot is amassing a stake, the shares have traded tight to terms, even rebasing the offer price. Uncertainty is growing around the deal.
• The squeeze-out threshold is 90%, and reaching it seems increasingly difficult, in spite of a generous premium. Philip Morris could lower the acceptance threshold and/or extend the offer period.
• My DCF valuation is SEK 113.17, potentially a 13% upside, although it would be difficult to twist Philip Morris’s arm. I’d still be long just under the offer price.

• Sirius XM Holdings is one of the largest subscription-based satellite radio broadcasting companies in the U.S.
• The company also has a music streaming service called as Pandora which competes with the likes of Apple Music and Spotify.
• Sirius XM Holdings has been performing well since the start of 2022 with growth in subscription and advertising revenue, as well as strong cash flow generation to use for investments in the company.

• Coupang (CPNG US) has bounced sharply following a 13G filling which indicated a change of heart from the pre-IPO investor, Maverick Capital with the purchase of an additional 7.7m Coupang shares.
• Maverick seems to be expecting a significant improvement in profitability, in line with Q1. However, we think this is unrealistic, given Coupang’s marginal cost trends.
• Maverick’s investment decisions on Coupang lack objectivity and its supersized exposure create too big of a risk to Coupang’s share price.

• The current excess rainfall across India is so far not leading to any material damage in rural India. 
• Britannia Industries (BRIT IN) continues to operate in a favourable environment and is possibly even immune to down trading. 
• Dabur India Ltd (DABUR IN) channels remain optimistic about matching YoY value growth, however, in terms of volume there still is quite a bit of ambiguity. 

• Beijing UBOX Online Technology (1741985D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO. 
• Beijing UBOX Online Technology (UBOX) is an unmanned retail operator (vending machine) in China. 
• As per F&S, it was the largest unmanned retail operator in China, with the largest retail machine network in the country. 

• Fosun Tourism (1992 HK) expects a sharp 87.5-92.5% reduction in its losses in 1H22, driven primarily by significant revival in its Club Med business, though China is weak.
• Outlook for 2H22 looks very encouraging as booking figures indicate good YoY volume growth and double-digit rate improvement in EMEA and Americas. 
• China also witnessed solid rebound in Jul and Aug after removal of lockdowns in 2Q22. New Club Med Joyview resorts including Changbaishan and Qiandaohu are added contributors. 

• Zomato (Zomato IN) raised US$1.3bn in its India IPO in Jul 2021. At that time, it was the largest technology sector listing in India.
• Zomato is one of two leading food delivery app operators in India. It recently acquired Blinkit marking its foray into the instant grocery segment.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• The KRX will list 20 new single stock futures (SSF) and 5 single stock options (SSO) next Monday, July 25, including LG Energy Solution (373220 KS).
• It seems very probable that the replacement demand for futures (short) will increase substantially due to a possible saturation of the loan market.
• This situation, coupled with local pensions’ basis trading, can lead to a significantly distorted basis. We should do basis trading or play pair trading (with LG Chem) on this.

• SOCAR (403550 KS)  is looking to raise up to US$157m in its upcoming Korea IPO. 
• SoCar is a Korean car sharing business which aims to become an all-in-one mobility solutions provider beyond car sharing, with approximately 80% domestic market share in the car sharing space.
• The firm remains loss-making with no signs of being profitable in the near/medium term. In this note, we will take a look at its refiling updates.

• Subscription rental services have become increasingly mainstream and the earlier start ups are now maturing into larger businesses. One of the first, Air Closet, plans an IPO later this month. 
• Air Closet specialises in renting out clothing from major labels but also in taking away the burden of choice by arranging for styles to be picked in-house.
• As well as this growing service, Air Closet has also just launched a rental service for gadgets ranging from kitchen appliances to cameras.

• Haidilao International announced the spin-off plan of its overseas arm, Super Hi.
• We take a quick look at Super Hi’s fundamentals. We think it is unlikely for Super Hi to achieve the level of economy of scale as Haidilao in China.
• We think the valuation of Super Hi should be compared to F&B peers in the ASEAN region given that its business is mainly focused on the ASEAN region. 

• We see Tesla’s Q2 GAAP EPS at $1.01, which is 34% below consensus estimates of $1.53.
• Tesla’s Q2 should be horrible given the lockdown of its Shanghai factory and huge startup costs at its 2 new factories, but beware of FSD revenue recognition. 
• Elon Musk needs Tesla’s share price to be high, in light of how many shares he may need to sell if forced to buy Twitter. Q2 numbers could be “massaged”. 

• We think Tesla’s FSD narrative is ready to crack: head of autopilot departed, 200 employees fired, and no progress on FSD.
• Tesla has to guide down full year production and gross margin targets (for reasonable reasons…will this be ignored this time?)
• Ever increasing competition from the low end may eventually confine LT sellside DCF based estimates. 

• Netflix net add bogey appears to be for 2Q losses in the -2-3M range (guide was -2M), if it hits this number is irrelevant, the 3Q/2H22 guide is more important.
• BBG was bullish on NFLX’s quarter recently, but we think misses the forest from the trees regarding ever ramping competition. 
• Ad-Based Netflix subs *might* hit by end of 2022, but won’t move the needle for 18 months.