Consumer: Alibaba Group, Sony Corp, Lucid Group, Accor SA and more

• After rising more than 40% since Q4 earnings, Alibaba (ADR) (BABA US) is threatening to break out from a downtrend that lasted a little less than 20 months.
• We think this bounce is quite normal given the fact that the stock lost more than 76% of its value during a challenging time period.
• We remain confident that Alibaba has more downside potential and thinks that this is yet another opportunity to make money on the short side.

• Aided by the weak yen, Imaging & Sensing Solutions should return as a major profit driver in FY Mar-23.
• Capacity expansion should help SONY regain image sensor market share over the next 3-4 years.
• Participation in TSMC’s foundry project in Kyushu should add to the division’s long-term potential.

• Electric Vehicle Startup Lucid Motors, the poster child for the SPAC Boom in 2021, has seen its valuation plummet in recent months amidst a string of production & quality control issues, in addition to other demand headwinds.
• As the macroeconomic environment deteriorates further, some rivals claim that the company could go bankrupt unless it cuts back on spending and reprices its vehicles.
• Elon Musk had an ominous warning for EV startup Lucid Motors last week

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