Consumer: Astra International, Yashili International Holdings, Rakuten Inc, Hotel Shilla, Accor SA, Shoppers Stop and more

• Astra International (ASII IJ) held an informative post-results analyst briefing that provided a glimpse into its future plans, with capex set to double in 2022 with a war chest ready.
• Other than investing in expanding existing businesses and in areas such as EVs, Astra also has a pipeline of deals related to the growing digital ecosystem in Indonesia. 
• Astra International (ASII IJ) is a proxy for the recovery in Indonesia’s economy through cars, motorbikes, and commodities but has an emerging digital and sustainability edge plus reasonable valuations.

• China Mengniu (2319 HK) is in discussions regarding its holdings in Yashili (1230 HK) which may result in a number of Potential Transactions, and may include a pre-conditional privatisation offer.
• The Potential Offer would involve a cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price. 
• The recent privatisation of key peer Ausnutria Dairy Corp (1717 HK) provides a guideline to the timeline from here.

• The pending IPO of Rakuten Bank could be worth ¥380bn (2x book) and boosts appreciation of a fintech business we think is worth ¥1,400/share
• That is well above the current share price reflecting the valuation drag of an expensive mobile segment, which is expected to hit peak losses in Q1 22
• We expect mobile break-even will take longer than expected and downside here offsets fintech excitement – we remain at Neutral

• Starting 18 March, the current $5,000 purchase limit at the domestic duty free shops will be abolished for the locals.
• The removal of the $5,000 purchase limit at duty free shops in Korea should encourage purchase of luxury women’s apparel, bags, and cosmetics.
• The removal of the purchase limit should help the major duty free operators in Korea including Hotel Shilla (008770 KS) and Shinsegae (004170 KS).  

In this report, we analyse the impact of the Ukraine-Russia conflict on the various sectors and companies in our European coverage universe. We also include a list of bonds for which we see good value. The direct impact from the actions taken to stop the war (including sanctions) should be insignificant or moderate for most companies under our coverage, but these names could be severely affected: Air Baltic, Consolis, Kem One, KME, Lecta, Naviera Armas, Nobian, Nordex, Norican, Oriflame, Pro-Gest, Profine, Raffinerie Heide, Stada and Vedanta Resources.

• According to our channel checks, the new smaller compact feature stores (of 20k-25k sqft) enjoy significantly better revenue/sqft (of ~1.5x) v/s the existing bigger stores (of 40k-50k sqft).
• Management targets to double revenue over the next 3-4 years backed by: its strategy of adding 10-12% new stores annually, its initiative to revive SSSG to high single or double digit on improved new store productivity and focus on private labels, strong growth in the Beauty segment and ecommerce initiatives.
• However, our revenue estimates are nearly 40% below the management.