Consumer: LG Energy Solution, Sony Corp, Fujitsu General, Ausnutria Dairy Corp, ZOZO Inc, Siam Global House, Merida Industry, Maruti Suzuki India and more

• LG Energy Solution (373220 KS) listed today and closed 68.3% above its IPO price to become the second largest stock in Korea with a full market cap of US$98.22bn.
• The stock will be added to a bunch of indices via Fast and Regular entry over the next few months. There will be liquidity squeezes on a few of them.
• LG Energy Solution (373220 KS) will become short sell eligible on 11 March after its inclusion in the Kospi 200 Index. That and lock-up expiry is something to watch for.

• Following its 12.8% fall last Wednesday Sony is now getting hit for 7.7% today thanks to Jay Powell. 
• This is an excellent opportunity to resize positions in our view as the long-term outlook remains excellent. 
• We had been worried about potential volatility due to the name becoming consensus but since that has been realised we are back to being uber bulls here.

• Fujitsu General’s 3QFY22 results saw solid revenues of ¥63.7bn (+20.3% YoY) but weak OP of just ¥35m (0.1% OPM). 
• Cost inflation is a concern here but we are most concerned with the top line and we see few issues there which leaves us encouraged. 
• There is also the possibility of a buyout offer from parent Fujitsu though we are concerned about any premium being too light.

• 530.8mn shares of Ausnutria (1717 HK) crossed at the close yesterday at HK$10.06/share. That is the exact number of shares under the SPAs and the stated price under the agreements.
• China’s NDRC approval,  a condition to the SPAs, was obtained earlier this month, leaving MoC and SAFE approvals outstanding. They appear to have been received. 
• Expect confirmation shortly. The completion of the SPAs triggers an MGO, which is conditional on Inner Mongolia Yili Industrial Group (600887 CH) holding 50% of the voting rights.  

• MSCI announced LG Energy’s Fast Entry. The effective date is February 15. As a result, rebalancing trading will take place on February 14.
• FTSE Fast Entry failed. As a result, LG Energy will be included in the FTSE AW in June, the first index review after the 3-month minimum listing period.
• LG Energy’s share price fluctuations are highly likely to occur in multiple phases until the inclusion of the KOSPI 200 on March 10.

• Rakuten Inc (4755 JP) and ZOZO Inc (3092 JP) are in a battle for share in online fashion with both companies increasingly aping the other to attract both merchants and consumers. 
• Amazon.com Inc (AMZN US) and Z Holdings (4689 JP) aren’t standing still either but the competitive pressures between Rakuten and Zozo may put them ahead of their rivals.
• This competitive edge now encompasses both physical stores and online platforms for physical retailers, with the aim to bind them ever closer to the platform.

• We reiterate BUY rating for GLOBAL with a lower target price of Bt27.0 (-7% from previous TP) based on 35xPE’22E, average of the Thailand home-improvement subsector
• We expect GLOBAL to report 4Q21 net profit at Bt687m (+82%YoY, +4%QoQ), supported by (1) a solid SSSG at +15%YoY,and (2) gross profit margin expansion from a higher revenue contribution 
• YoY decrease in gross profit margin caused by a higher revenue contribution from low margin products and an increase in marketing promotion.

Full orders with high demand for e-bikes; upgrade to BUY. Merida posted FY21 revenue of NTD29.404bn (+8.61% YoY). FY21 EPS is estimated at NTD13.87.. Merida’s FY22 revenue/earnings may grow by double digits, we upgrade Merida to BUY with TP of NTD350 (21x FY22 PER).

• Maruti Suzuki (MSIL) is the market leader in the domestic passenger vehicle (PV) space
• Market leader in each sub-segment – cars (62.2%), UV (21.6%), vans (96.6%)
• Target Price and Valuation: Introducing FY24E, we roll over our valuations and now value MSIL at Rs 8,760 i.e., 30x P/E on FY24E EPS (previous target Rs 6,000)