Consumer: LG Energy Solution, Sony Corp, Oriental Land, Vedant Fashions, Comcast Corp Class A, Colgate Palmolive (India), Tuesday Morning, United Spirits, Ohsho Food Service and more

• LG Energy has the second-largest market cap on KOSPI. For Fast Entry to fail, the price must lose 90% of its current value. So, Fast Entry is a foregone conclusion. 
• The review period ends on February 21. The implementation date is March 11, and the announcement will likely be made public around February 24-25.
• The stock with the lowest market cap from May to October last year will leave the Index. The victim is Dongwon F&B, beating Nexen Tire by a very narrow margin.

• Sony has not taken long to respond to Microsoft’s purchase of Activision Blizzard. 
• It is being reported that Sony will acquire Bungie, original developer of the Halo franchise as well as Destiny for $3.6bn.
• The cost effectiveness of this move stands in stark contrast to Microsoft’s acquisition and is significantly more targeted in its apparent goals, as usual.

• Oriental Land (4661 JP) positively surprised the market with 3QFY22 revenue surpassing the consensus estimate by more than 13% through gradual easing of limits imposed on park attendance.
• FY22 revenue and OP guidance were raised by ¥22.9bn and ¥16.6bn respectively despite expecting Q4 attendance to fall short of the original forecast through the new state of emergency measures.
• Nonetheless, we think Oriental Land is too expensive at 33.6x FY24 OP, especially considering that attendance is expected to fall short of the original forecasts in the fourth quarter.

• Vedant Fashions, owner of India’s leading homegrown brand for premium ethnic wear for men – Manyavar, will launch its IPO on Feb 4th at a price range of Rs824-866/share.
• The USD420 mn IPO suggests an equity valuation of USD2.8 bn implying forward P/E of around 70X at a premium to apparel peers but in line with consumer good companies.
• The rapid growth in demand for premium ethnic-branded-wear for men have helped Vedant Fashions emerge as a segment leader with a pan India presence and attractive growth outlook.

• Comcast and Charter have seen their share prices cut 30% since the fall when we thought broadband risks were overstated.
• We don’t think now is the time to buy cable though due to rising competitive intensity from telco.
• Prefer Charter over Comcast due to their faster growing wireless business and pure play business model vs. Comcast’s increased streaming content spend.

• Colgate Palmolive (India) (CLGT) reported an in-line quarter vs our estimates across key performance metrics
• Reported Revenue growth was 3.8% yoy at Rs. 1,271 Cr (our estimate Rs. 1,285 Cr) led by volume growth of 3% in our view (3% our estimate) and ~1% price/mix growth.
• Maintain BUY with revised TP of Rs. 1,650 (earlier Rs. 1,765) at 39x FY24E EPS.

• TUEM is scheduled to report fiscal second quarter (December) results on February 3, 2022 in what could become a binary event for the stock price
• TUEM built up inventory levels heading into the holiday shopping season. Expectations are TUEM would have been able to capitalize on having well stocked stores while other retailers were struggling.
• The wrench in the quarter was the effects the Omicron variant had on shoppers going to stores. TUEM relies on foot traffic to generate sales

Nippon Life India Asset Management: NAM printed core revenue, in line with our estimates. However, revenue yields, in line with industry trends, continued to shrink. Market share in the high-margin equity segment moderated further (-13bps QoQ) and continues to remain a concern in medium- to long-term. We expect NAM to focus on improving its performance to recoup its lost market share. We trim our FY22E/23E/24E revenue estimates by 1.4/2.8/3.3% to build in the impact of a sharp correction in capital markets and lower admin expenses in FY22E.

• United Spirits (USL) is India’s leading alcoholic beverage company and subsidiary of global leader Diageo plc
• . It manufactures, sells premium liquor brands such as Johnnie Walker, Black Dog, Black & White, Vat 69, Antiquity, Signature, Royal Challenge, McDowell’s No 1, Smirnoff and Captain Morgan.
• Target Price and Valuation: We value USL at Rs 1050 i.e. 52x P/E on FY24E EPS

• 1-3Q progress rate 72% for OP and 88% for RP, after special allowances.

• 3Q sales and profits increased QoQ due to normalization of operating hours.

• In-store dining sales improved significantly in 3Q.