Consumer

• F&F Holdings is a single-subsidiary PURE STUB PLAY with no operating assets. It currently trades at a 54.30% discount to its NAV, and its 20-day MA sigma sits below -2.0.
• The pair is currently in a substantial diversion. The passive inflow caused by F&F’s KOSPI 200 inclusion appears to have caused a flow imbalance.
• F&F is becoming a primary target for KOSPI 200’s post-rebalancing shorting events. Then, we can consider using F&F Holdings as a long hedge, in addition to outright shorting for F&F.

• Life opened a new, upscale supermarket last month in central Tokyo that is designed to process online orders as easily as serving in-store customers.
• The new store, replacing Mitsukoshi in Ebisu Garden Place, includes a backroom that acts as a dark store for online orders.
• This frees up space in the store for higher margin items like deli foods and is a sign of the supermarket’s intentions going forward.

• Takashimaya will close its store in Tachikawa early next year.
• This can be seen as a further sign of an improving outlook for a smaller department store sector. 
• More closures will rid the sector of excess capacity and solidify positioning as a genuinely upscale format for the affluent.

• Chinese lockdowns are taking their toll on Q2 sales. We expect the upcoming report to be much worse than the last 
• Estee Lauder’s recent results suggest that travel retail will be a negative shock too 
• We believe there is one large downgrade to full-year guidance and consensus numbers. Too early turn bullish 

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Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• In the past couple of weeks, big box retail stocks got hammered. The largest retailer Walmart missed EPS expectations by a large margin
• The results certainly caught investors and analysts by surprise, and it seemed like their management was surprised too
• Some item sales (grills, plants, and pool chemicals) were impacted by weather, and high inflation was causing consumers to buy cheaper goods

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Mitra Adiperkasa‘s recent 1Q2022 results and a follow up conversation with management confirmed continuing momentum in the recovery with a lot more to come in the next few quarters.
• Sports, digital, and F&B are leading the recovery with greater mobility boosting sales but online sales remain strong reflecting changing consumer habits and the success of the company’s strategy there.
• Mitra Adiperkasa is back on an expansion tack both in Indonesia and in Thailand, Vietnam, and the Philippines, with capex forecast at 2019 levels this year. Valuations are attractive.

• Inside is a recap of movements in the last week relating to the Hong Kong Stock-Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry. 
• Overall, net inflow was ~US$0.7bn, split between Shanghai (+US$1bn) and Shenzhen (-US$0.3bn)  
• The largest inflows were into China Yangtze Power (600900 CH) and Cosco Shipping Holdings (601919 CH). The largest outflows were in Kweichow Moutai (600519 CH)and CATL (A) (300750 CH).

• In a bull market, favorable developments lead to price rises and lift investor psychology.
• Raging bull markets are examples of mass hysteria. At the extreme, thinking and thus behavior become unmoored from reality.
• Bull markets don’t treat all sectors the same. In bull markets, optimism coalesces most powerfully around certain groups of securities, such as “the new thing” or “super stocks.”.

• There was far too much “easy money” made for too long and now many new investors have finally encountered their first excruciating rite of passage following the selloff this year.
• Because we are finding so many fast-growing companies with good operating visibility and low leverage at very high FCF yields, we have not become too bearish on the market as a whole.
• As of the middle of May, we estimate that the upside to our long book exceeds 100% in the next 12-18 months.

• Sony’s hosted its 2022 Corporate Strategy Meeting last week. Our key takeaway is that SONY is shifting towards greater investment in Content, Creators, and Communities.  
• Sony recognizes that technology is changing the way that content is produced and consumed and is responding with new experiences and monetization models.  
• Sony will continue to benefit from the evolution of the internet as it becomes more social, immersive and financialized (otherwise known as the metaverse). 

• Operating margin improved in 4Q22 due to well controlled expenses in minor businesses.
• We believe the state council meeting will provide a turning point in June.
• We set an upside of 31% and a price target at HK$106.

• Sony held the first of their two investor days yesterday presenting on the Game & Network Services, Music and Pictures segments. 
• While there was nothing especially new for those paying attention to the broad flow of news conditions for the content businesses remain strong. 
• What was interesting to us was the degree of collaboration with Kadokawa.

• LG Energy Solution’s real-world free-float rate should be around 5%, or 12.3M shares. We will see two additional passive inflows with the real-world float this tight.
• KOSPI 200 up-weight and FTSE June QIR New Entry’s combined inflow will be 0.6% of SO, enough for us to expect a short-term flow crunch.
• Then, there will likely be a share let-go event (block deals) by LG Chem to lessen the tight float situation, just like what KSOE had done for HHI.

• ITC Ltd (ITC IN) ‘s core cigarette portfolio is relatively inelastic to the current commodity inflation. With the reopening of offices and social events, volumes are likely to trend higher. 
• A renewed focus on FMCG is likely to aid volumes for the non-cigarette segment. 
• Valuations are in favor and we see limited scope for de-rating if not re-rating.

• Tidefall is a concentrated, unconstrained investment fund that attempts to compound its capital at an attractive rate of return. Our investment advantage comes from our in-depth research, long-term time horizon and appreciation of biases.
• With Netflix stock down by more than 50% since its high in November (and 10% below Reed Hastings’ $20m purchase in January) we re-entered the position in April.
• We believe the current price of Netflix shares creates a compelling long term investment opportunity.

• Hindustan Unilever (HUVR IN) is focusing on protecting its business model and market share, which is the key in such an operating environment. 
• Presence across multiple price points and playing a targeted game in target geographies will aid in maintaining steady-state growth. 
• Current valuations, lack of trigger for driving exponential volume growth and expected slowing pace of premiumisation warrant caution. 

• Analyst meeting came out with a positive tone regarding 2022 outlook.We maintain BUY rating  while roll out the new 2023 TP of Bt4.8 (+7% from previous TP),pegged to 1x PBV’23E.
• We expect  its 2022 EBITDA to grow 4 times, in-line with management target with 61% growth in revenue backed by global tourism recovery.
• UK portfolio will grow steady from a dull 1Q22 performance owing to low season and will ramp up to pre-Covid levels by the end of2022 while Maldives portfolio will enter 

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• Minda Industries Ltd. (MIL) reported a strong set of results (slightly ahead of our estimates) despite a tough operating environment.
• MIL posted a robust revenue growth led by an increase in content per vehicle, addition of new customers and products, and growth across segments as well as due to the ramp-up of new order wins
• We maintain our BUY rating with a revised target price of Rs 1,100/share (Rs 1,250 earlier), valuing the stock at 32x FY24E EPS, indicating an upside of 32% from the CMP.

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• There will be 7 additions and 7 deletions for the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) at the June rebalance that will be implemented on 9 June.
• We got all 7 inclusions right and 5 of the 7 deletions right. The adds have 3-6 days ADV to buy, while the deletes have 4-12 days ADV to sell.
• Short interest on the deletions is a significant portion of the estimated passive selling and there could be short covering in the week leading up to implementation of the changes.

• The end of Rakuten free plans is unlikely to have a major industry read across although the end of loyalty point chasing should help save on promotional costs
• Mobile erosion has likely peaked but full-year losses for FY22 will be higher than last year. We expect the progression to profitability to be modest
• Listing the securities business is a positive as it surfaces fintech value but allocating proceeds from valuable asset sales to funding mobile is not

• SD Biosensor leads the addition group with an estimated inflow of 4.59x ADTV. SK Discovery and Yungjin Pharmaceutical have the most substantial outflow at 7.23x and 6.07x ADTVs, respectively.
• For short-covering, CJ CGV stands out the most at this point. Its short interest is 4.57% of SO, and the short interest has increased the most of late.
• For short resumption, two names stand out: Meritz Fire and Hana Tour.

• XPEV (US ADR) is forming a compelling positive wedge but faces a test of the critical 18 macro dual low support where a trading bounce is expected.
• Sell volumes rose on the 25 rejection, calling for a test on the key 18/19 support zone.
• RSI sub 30 target does suggest XPEV breaks 18 support after a tradable bounce with 24/25 the key hurdle. 31 represents MT resistance. 9868 HK linked levels.

• Korea Exchange announced the additions and deletions to KOSPI200 today.
• There were no major surprises with regards to the additions and deletions.
• SK Discovery is a potential buy candidate and Hana Tour Service is a potential sell candidate post the announcement of KOSPI200 additions and deletions.

• Our checks primary done over North of India suggest a stable to improving rural environment 
• There is a sense of aggression in ITC Ltd (ITC IN), Britannia Industries (BRIT IN) is well placed to grow volumes & Nestle India (NEST IN) is expected to be a steady performer. 
• Dabur India Ltd (DABUR IN)’ s image at the distributor level is quite shocking and Marico Ltd (MRCO IN)‘s products are more prone to volatility. 

• TVS Motor (TVSL IN)’s market share gains in the premium segment can further accelerate in case of easing supply issues and rural recovery. 
• While EV may not materially move the volumes in the near term, the ramp-up of the newly launched TVS iQube (EV) will determine the sentiment around the stock. 
• The sector view is positive, but current valuations are not lucrative enough to ignore capital allocation issues that have been a concern for TVSL. 

• EV start-up Faraday Future released their delayed Q1 2022 results & had some hair-raising disclosures on their first-ever earnings call. 
• Cash halved in the 3 months since Q4 2021 & dropped another 20% as of April 30th. Faraday didn’t deny that they have roughly a quarter’s worth of cash left. 
• We can’t see how Faraday raises cash in the current risk-adverse markets. And we don’t see any assets worth buying them out for. Faraday is in need of a miracle. 

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

• As expected, NIO Inc (9866 HK) will be added to the Hang Seng Tech Index (HSTECH INDEX) at the close on 10 June replacing ASM Pacific Technology (522 HK).
• We estimate passive trackers will need to buy over 9 days of ADV on NIO Inc (9866 HK) while selling 11 days of ADV on ASM Pacific Technology (522 HK). 
• NIO Inc (9866 HK)‘s inclusion in the Hang Seng Tech Index (HSTECH INDEX) could create significant arb opportunities versus NIO Inc (NIO US) on 10 June.

• We should focus on the weight changes of the existing constituents. For this, two names really stand out: Kakao Pay (+0.44x ADTV) and LG Corp (+0.37x ADTV).
• It is because Kakao Pay and LG Corp will undergo an increase in their float rate in the KOSPI 200 rebalancing, and these up-weights will also affect this sector index.
• Their combined inflow size (KOSPI 200 & KOSPI 200 IT) will be 1.41x and 1.16x ADTVs. This will be the most substantial, except for Kakao Bank and the new additions.

• TVS Motor (TVSL IN) primary setback is in the form of poor capital allocation
• In TVS Motors: Analysis Of Various Investments , we had briefed on the investment policy of the company and how the non-core investments/subsidiaries are dragging the profits.
• This insight is an extension of the previous one; we update on the various investments the company has undergone and how it impacts the capital allocation.

• Plenty of review announcements after the close on Friday – HSI, HSCEI, HSTECH, FTSE AW/AC, Sensex. Most changes were as expected.
• There are a lot of review cutoffs on Monday and announcements expected later in the week (KOSPI200, KOSDAQ150, CSI300, STAR50).
• There were inflows to Hong Kong, Taiwan, Korea and Australia focused ETFs during the week, while there were outflows from China, Japan and India focused ETFs.

• We anticipate the uptick in retail primarily aided by the wedding season to be short-lived for Hero Motocorp (HMCL IN). 
• HMCL has not been able to keep pace with changing consumer preferences, the limited success in premium segment and scooters is likely to remain an overhang even on new launches.  
• Inventory correction at the dealer’s end could aid wholesales supporting valuations, but the company remains structurally unattractive. 

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• With LIC not delivering and Delhivery needing insurance, combined with the Korean cancellations and HK silence, it looks like its going to be a quiet few weeks for IPOs.
• On placements, both the Korean deals were a disappointment, despite being well-flagged.

• Woolworths Ltd (WOW AU) proposes to acquire all shares in MyDeal.com.au Ltd (MYD AU) other than those held by Sean Senvirtne and other key management personnel.
• MyDeal shareholders will receive $1.05/share in cash, a punchy 62.8% premium to last close, but just 5% above its 2020 IPO price.
• This proposal is being done by way of a Scheme with expected completion in Q3/Q4 2022.

• Ultrajaya Milk Industry & Trading saw continued growth momentum in 1Q2022 both for its core UHT milk business (No.1) and its carton tea business as mobility restrictions were lifted.
• The company also sources more of its milk requirements locally, which means less exposure to imported milk power but prices there have started to come off. 
• Management remains optimistic that the company can achieve double-digit growth this year plus it has increased ASPs by +3% in April. Valuations at a discount to staple peers. 

• At 4% below the COVID sell-off low level, Shiseido Company (4911 JP) is looking genuinely attractive over the medium-long term.
• In addition, there could be a shift in the short term market sentiment towards Japanese cosmetics with China’s COVID lockdowns expected to ease from the beginning of next month.
• With the downside risk limited to less than 10%, we think it may be a good time to start owning Shiseido.

• MyDeal.com.au Ltd (MYD AU) entered a SID with Woolworths Ltd (WOW AU) to acquire an 80.2% interest. Shareholders will receive A$1.05 per share, a 62.8% premium to the unaffected price. 
• The three largest shareholders, representing 76.0% of outstanding shares, will vote in favour of the deal. The scheme meeting is set for 3Q. 
• This is a done deal. At the last close price, the gross and annualised spread for an October implementation date is 4.5% and 10.1% respectively.  

• Eicher Motors (EIM IN) is well-positioned to offset margin pressures due to its aspirational brand, the success of its new models and exports. 
• Easing supply issues along with newer export markets provide a compelling runway for revenue growth. 
• While our estimates are in line with consensus,  we believe the YTD outperformance is likely to continue and any opportunities presented amidst market volatility must be exploited. 

• Maintain BUY rating with TP of B23.00 derived from 16xPE’22E, which is close to +1SD of 5-years trading average. Our rating reflects strong pet food growth outlook, attractive 3.8% yield
• We foresee earnings momentum to improve QoQ in 2Q22, supported by better pet food business unit from new capacity, and further strengthen by Baht downtrend.
• In our view, the new pet food capacity should gather pace in 2H22, upon better demand in light of favorable macro dynamics. Moreover

• Yesterday analyst meeting came out with a positive tone.We reiterate our BUY rating for SAPPE with a target price of Bt35.25 (+10% from previous TP)based on 24xPE’22E, close to +1SD
• Management targeted revenue at Bt10bn by 2026 or +22%CAGR(2022-26). •In our view, SAPPE target is quite challenging amid concern over rising inflation situation. 
• We expect 2Q22 earnings to continue to grow YoY and QoQ supported by (1) higher oversea market penetration, (2) distribution channel expansion,  (3) more effective marketing activities

• Analyst meeting came out with a positive tone regarding 2022 outlook.We maintain BUY rating with a target price of Bt38.0,based DCF method (WACC of 8% and terminal growth of 2%)
• Positive 2022outlook as we expect the hotel industry to make a strong come back in 2022due to vaccine roll outs and easing of international travel restrictions,making the earnings positive for2022
• Since 1Q is typically the lowest travel seasonality,we expect the revenue from hotels to grow for next 3 quarters (around 50% by 4Q22), contributing around 75% of the total revenue.

• VIP Industries (VIP) Q4 FY22 results reported a weak set of numbers given the seasonally weak quarter.
• Revenue stood at Rs 356 Cr up 46% YoY on account of the low base & down 13% QoQ due to the 3rd wave of Covid-19 Omnicron variant
• Revising our FY23/24 estimates adjusting for the new cost environment we revise our recommendation from Buy to HOLD with a revised TP of Rs 596/share (earlier: Rs 600/share) valuing the stock at 47x FY24E EPS.

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