Consumer: Hana Tour Service, Rakuten Inc, CJ CGV Co Ltd, Xpeng, ITC Ltd, TVS Motor , Faraday Future Intelligent Electric, Accor SA and more

• 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.