Consumer: Olam Group, LG Energy Solution, Tesla Motors, Sappe Pcl and more

In today’s briefing:

Olam Unlocks Value Through the Sale of 35.4% of Olam Agri to SALIC

Olam Group (OLG SP) issued an update regarding its reorganization process today to announce the sale of a 35.4% stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company.
The transaction assigns a valuation (equity) of S$4.7bn for the Olam Agri-Business, which is around 69% of Olam Group’s current market cap.
This is almost 2.0x the implied equity value of the Olam Agri-Business at the current share price of Olam Group, and suggests an upside of 33.8%.

The Nikkei reported today on rumblings between Korean battery suppliers and their American customer OEMs.
The crux of the dispute is about technology access and risks of technology leakage which are normal in the scheme of things.
However, expiring LFP patents which we have flagged are likely to result in this dispute going badly for battery suppliers.

Tesla Inc. is making some Chinese buyers sign a written guarantee that they will not resell their cars within 12 months, in an apparent effort to curb after-market speculation.
People who want to buy cars in bulk need to sign a letter of commitment that stipulates they must pay the firm liquidated damages of 20% of the order value if they resell the cars within a year of receiving them, Tesla told Caixin.
Whether such a guarantee is enforceable is another matter. A consumer lawyer who asked not to be named told Caixin that Tesla would have little chance of holding buyers to such rules under Chinese consumer law, which allows people to freely dispose of the goods they purchase.

We reiterate our BUY rating for SAPPE with a target price of Bt32.0 based on 22xPE’22E,close to its five-years average trading range and average of Asia-ex Japan consumer staple sector
SAPPE is beverage exporter with 65% of sales from oversea. In 2021, logistic cost surged to Bt341m (+251%YoY) as it provides a freight contract for distributors and pass most
Average container freight decreased to US$8800 per 40ft box in March 2022 from it peak at US$10,000 per 40ft box in Sep 2021. We believe freight rate to continues

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