Consumer: LG Energy Solution, Huitongda, Lagardere SCA, VST Industries, Bajaj Auto Ltd, Accor SA, Cisarua Mountain Dairy, RS PCL, Shoppers Stop and more

• LG Energy Solutions priced its IPO at the top of the range amid massive oversubscription numbers. 
• If anything it was slightly surprising that pricing was not raised above the range. 
• Nevertheless, we feel prospects here are mixed even if slightly tilted positive.

• The KOSPI inclusion will be officially implemented on January 28. As a result, local active funds benchmarking the KOSPI will compete to buy LG Energy on the listing date.
• Passive Inflow appears one week after listing, particularly MSCI and KODEX/TIGER battery ETFs. The KODEX/TIGER rebalancing effective date is virtually confirmed on February 10, meaning rebalancing trading on February 9.
• Another two weeks later, the KOSPI 200 and KRX BBIG rebalancing await us. Combined with KRX BBIG, there will be a passive inflow of about 0.5% of SO.

• Alibaba Group (9988 HK) backed B2B e-commerce business, Huitongda (1566215D CH) is looking to go public to raise $500m to save the business.
• With churn rates as high as 50%, things could get ugly rather quickly if customer acquisition falls below sub optimal levels.
• We fear this is an attempt to save a failing business that could be worthless in few years.

• In February 2022, Vivendi will file a public tender offer for all Lagardère shares at €24.10/share, identical to the price per share paid to Amber Capital.
• Assuming some recovery in travel retail, the implied multiple of the publishing division would be 5.5x EV/22e EBITDA, which is cheap in my view. Comparables are trading at 6.6x.
• The share price has gone below the offer price for the first time since 9 December. The 0.2% gross spread is still tight, but worth monitoring in case it widens.

• VST Industries (VST) is among the oldest cigarette players in India, involved in manufacturing and marketing cigarettes as also trading unmanufactured tobacco
• The company has two cigarettes manufacturing facilities in Hyderabad, AP. 
• Target Price and Valuation: We arrive at a revised target price of Rs 3425, valuing the business at 14x FY24 earnings.

• Bajaj Auto (BAL) Q3FY22 results stood slightly ahead of our expectations, particularly on the margin front.
• The company reported net revenues of Rs 9,022 Cr (our estimate – Rs 8,928 Cr) v/s Rs 8,910 Cr in Q3FY21, posting a flattish growth YoY
• We maintain our BUY rating on the stock with a revised TP of Rs 4,250/share (Rs 4,500 earlier) (which includes Rs 320/share for the company’s stake in PMAG) as we value the stock at 17x its FY24E EPS.

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

Premium valuation justified by the premium profitability and strong earnings growth trajectory

• We believe RS’s 2022E target revenue at Bt5.1bn (+31% from our 2021E forecast) is a bit optimistic given a slower-than-expected recovery in people purchasing power during post-COVID-19. However
• Our expectation over earnings recovery in 2022E will be driven by 1.) an absence of heavy SG&A expense allocation after key product launch(Camu- C) in 2021, 2.) equity income recognition
• Expect earnings in 4Q21 to reach bottom at Bt10m loss due to slower-than-expected recovery in MPC sales and Ads spending.

• Shoppers Stop (SSL) is one of India’s leading departmental stores and has undergone various structural changes
• Operates 83 departmental stores and 163 beauty format stores spread across 4.2 million sq ft and present in 47 cities
• Reasonable valuations prompt us to remain positive on the stock and maintain BUY: We value SSL at Rs 480 i.e. 8.5x FY24E EV/EBITDA.