Consumer

• In Japan, there is a type of offering called a tachiaigai bunbai offering which is used by companies to conduct small, relatively low-cost, offerings to increase liquidity or shareholder breadth.
• These are conducted with a bit over a week of warning, and there are usually very low limits of shares purchasable per applicant.
• There are certain dynamics surrounding such tachiaigai bunbai which are worth understanding. 

• Bumitama Agri (BAL SP) is a pure-play CPO play on SGX which like the rest of its peers has lagged the price of CPO by a mile.
• What could be the catalyst to change this? We preview FY21 results which will be announced on 28th February and its dividend outlook going into FY22.
• BAL should take a page from the Geo Energy Resources (GERL SP) playbook and start to pay out aggressive bi-annual dividends to get Mr. Market’s attention.

• BABA’s slide has been in line. Two key directional break points stand out that will drive the intermediate cycle. The current technical reading remains weak.
• MACD has drifted higher into the neutral zone while price has traded in a bearish flat range setting up a sell. MACD will be coiled for a fresh down leg.
• Well defined directional break points lies at 135 (trendline and price pivot) and 100 (triple low support).

• Palm oil prices are up 177% since May 2020 and 66% since June of last year. Palm oil touched a record high of RM5,700/mt the 31 January.
• Yet while palm oil has enjoyed a meteoric price rise, the performance of listed palm oil plays has bifurcated.  
• Valuations appear largely constrained by environmental, social, and governance concerns, resulting in plantation stocks trading below their historical averages.

• While we are not yet out of the woods, we are seeing several encouraging signals that indicate improving risk appetites.
• Additionally, we are starting to see improvement within the Consumer Discretionary (hotels/resorts, casinos, leisure, cruises), Transportation (airlines), and Materials (metals/mining) Sectors — we highlight several attractive stocks to buy.
• The fact that more areas are becoming attractive (and not just Energy and Financials) is a step in the right direction for bulls.

• The performance miss in EIM was led by lower realization and launch/event related marketing spends.
• With supply chain issues showing some signs of improvement, the management expects volume performance to be better.

• Eicher Motors Ltd (Eicher) Q3FY22 performance was marginally below our estimates
• Eicher reported standalone net revenues of Rs 2,838 Cr in Q3FY22 (our estimate: Rs 2,934 Cr), flat YoY
• We maintain our HOLD rating on the stock with a revised TP of Rs 2,800/share (Rs 2,850 earlier), resulting in an upside of 9% from the current levels.

• Near term outlook remains bright
• New acquisitions and high CPO ASP lifted upstream
• Downstream profits grew while property softened
• Raising EPS forecasts to factor in higher CPO ASPs

• Lumax Industries (Lumax Inds) reported a weak set of results in Q3FY22 which stood below our estimates
• It reported revenue for the quarter at Rs 435 Cr (our estimate – Rs 467 Cr), registering a de-growth of 4% QoQ
• We retain our BUY rating on the stock with a revised target price of Rs 1,350/share (earlier Rs 1,600/share), implying an upside of 26% from the CMP.

• The big event in the coming week is the MSCI Feb QIR announcement. Sydney Airport (SYD AU) will be deleted from indices after the close of trading on 9 February.
• There are quite a few changes expected across the NIFTY Index (NIFTY INDEX), Nifty Bank Index (NSEBANK INDEX) and NIFTY100 Indices. The PCOMP INDEX rebalances on 11 February.
• There were large inflows to Australia focused ETFs during the week, while Japan saw some pretty chunky outflows from a few ETFs.

Cadila Healthcare: Cadila’s Q3 revenue/EBITDA missed our estimates by ~3%/9% due to lower-than-expected sales in India/EMs and higher R&D and other expenses. The company expects its India business to grow in strong double digits in FY23. While it guides for a flattish FY23 in the US, it aspires to take US revenue to ~USD1bn (vs. ~USD800mn in FY22e) by FY24e. However, we believe this is far-fetched, given that it hinges on multiple factors like Moraiya resolution in CY22, normalised price erosion in FY23, and timely launch of two high-value products.

• The March rebalance should see the slow crawl toward 80 index members continue. We should get up to 68-70 members in March. Reaching 80 by June is unlikely.
• High probability inclusions are Kuaishou Technology (1024 HK), Smoore International (6969 HK), Nongfu Spring (9633 HK), JD Health (6618 HK) and JD Logistics (2618 HK).
• Currently, index turnover due to capping/float changes is low which will allow more stocks to be added to the index. Increase in the turnover will result in fewer changes.

• After initially grinding up slowly but underperforming the Nikkei our suggested skew trade gave up ground during the new year sell off.
• It did so slowly, however and was outperforming Nikkei when last we checked despite being down slightly. 
• Thankfully, a lot of the idiosyncratic volatility hurting the skew trade has reversed now and it is positive and outperforming Nikkei consistently.

• 5 Issues: Tough Comps, Supply Chain Disruptions, Reels MixShift, Apple IDFA, and TikTok…thats alot of issues
• TikTok is pressuring engagement and Google is taking Facebook’s advertising revenues.
• Strong management team with history of executing at a trough valuation provides a good entry point. But may make more sense to just buy Google.

• The screening results based on the average market cap for the screening period until the last closing price have seven additions/deletions.
• LG Energy will make Fast Entry. The one to make room for LG Energy should be Dongwon F&B, an additional deletion to the seven deletions through the preliminary filtering.
• F&F Holdings may fail to meet the minimum float rate. If it doesn’t make KOSPI 200 this time, Hyundai Marine & Fire Insurance will get to stay in the Index.

• Established in 2010, Turo has become the largest car sharing marketplace in the world. It is attempting to complete its IPO in a turbulent IPO market. 
• Turo’s sales and profit growth skyrocketed in 2021. Its sales jumped by 206.5 YoY to reach $330.5 million in 1Q-3Q 2021.
• Since the company’s inception, hosts have earned more than $1.1 billion in aggregate on its platform.

• The screening period for the upcoming rebalancing is May 3-31. LG Energy satisfies the 3-month minimum listing requirement, so it becomes eligible to join the Index in this rebalancing.
• LG Energy will likely receive an inflow of ₩44.6B, 0.04% of SO. Considering its tight real-world float (less than 6%), it would still be something we don’t want to overlook.
• What is critical is an estimated outflow size of Celltrion. It would be about the same amount, but relative to its ADTV, it will be -0.26x.

• On February 3, Kura Sushi (2695, the company) disclosed monthly data for January (on a preliminary basis)
• The company ran a special fair using high-end ingredients in early January and has been running a “BT21” campaign from January to February.
• BT21 is a globally popular character brand created through a collaboration between LINE FRIENDS and BTS (Bangtan Sonyeondan)

• Wabco India (WIL), now part of the ZF Group, is the market leader in the CV braking space and a technology-focused complete solutions provider
• FY21 channel mix – OEM 41%, aftermarket 16%, exports 43%
• Target Price and Valuation: Introducing FY24E numbers, we now value the company at Rs 9,530 i.e. 50x P/E on FY24E EPS (earlier target price Rs 8,800

• Amber is a leading solution provider for air conditioner OEM/ODM industry in India.
• The company has a product portfolio including RACs, RAC components and other non AC components
• Derives ~62% of its revenues from RACs and the rest from components and mobility applications

• Ohsho Food Service (9936, the company) disclosed monthly data for its directly-owned stores for January (on a preliminary basis)
• Same-store sales were 106.9% vs. January 2021 (105.4% for December), 94.9% vs. January 2020, and 104.3% vs. January 2019
• The company’s sales remained solid despite the shortening of operating hours and restrictions on alcohol beverages