Consumer: Seven & I Holdings, Alibaba Group, Tassal, JD Health, Rakuten Inc, Good Drinks Australia, Enero Group Ltd, Tata Consumer Products, Panca Mitra Multiperdana PT and more

• Seven & I Holdings (3382 JP) should breeze through its rather unchallenging expectations when it releases its first-quarter results next week.
• The company has raised its previous guidance multiple times last year and we expect a similar pattern in the first half next year with 7-Eleven US continuing to exceed expectations.
• Thus, we would buy Seven & I Holdings leading up to earnings expecting a decent upside on rising guidance.

• New Medical Product Rule banned online direct sales of medical products.
• Koolearn’s stock price plunged after surging, as Tencent reduced its shareholdings.
• Alibaba dismissed employees in Freshippo and JD.com downsized its community group purchase.

• Glenn Bruce Cooke has acquired a 5.40% stake in Tassal (TGR AU) at an average price of A$3.58. The shares rose 3.1% to close at a 1-year high of A$3.97.
• Mr Cooke has shown previous interest in Tassal and its key competitor, Huon Aquaculture (HUO AU). Huon was ultimately acquired by JBS SA (JBSS3 BZ) in November 2021.
• Tassal is a better business than Huon due to more stable operations and higher margins. Benchmarking to the Huon transaction multiples implies a floor offer price of A$4.65 per share.  

• China has released a draft rule on 22nd June that would prevent third-party e-commerce platforms from selling drugs directly to consumers online.
• Alibaba Health as well as JD Health’s shares dropped 15% at the end of trade on 22nd June while Ping An Health’s shares lost about 5.7% of its value.
• This is the First of a series of reports where we analyse the impact of the above draft rule on leading digital-healthcare players in China. This report discusses JD Health.

• On June 1, the Nikkei Shimbun carried an article titled “Parent-subsidiary listing, investors cynical about ‘governance barrier'”. I would like to discuss the issues in the article.
• The dissolution of parent-subsidiary listings has accelerated, with approximately 20% of parent-subsidiary listings having been dissolved for 2 years. On the other hand, plans for new subsidiary listings are underway.
• Rakuten and Panasonic are telling the market that they are not very good at generating cash flow. Not coincidentally, the stock prices of these companies are suffering from underperformance.

• GDA recently announced Australian distribution agreements with Magners Irish Cider and more substantially with Molson Coors.
• Neither agreement impedes on GDA’s own manufacturing capacity or brings manufacturing risk.
• The addition of such ‘agency’ volumes fast-tracks scale under fully funded, earnings accretive, established brand deals

• OB Media’s growth is dictating EGG’s growth profile with OB contributing 62% of EBITDA growth in 1H22 and now makes up a third of group EBITDA, despite only 51% ownership.
• Notwithstanding an increase to its fixed cost base, OB Media further expanded EBITDA margin (to 77.3%) with the people-lite, digital business helping to mitigate the impact of wage inflation across the rest of the group.
• Importantly, the more mature business units all continue to perform well with Hotwire and BMF growing revenue 20%+ and 30% respectively

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• Newly built facility driving top line: In response to robust demand for its shrimp products from overseas markets (US – 87.6% and Japan – 12% of revenue in FY21), PMMP has expanded production facilities every 1-2 years, with the 8th plant (TMM4) coming on stream in Oct21, pushing up production capacity to 27,100 tons (+8% YoY).