Consumer: Seven & I Holdings, JD Health, Smoore International, SK Shieldus, Porsche Automobil Holding Se, Skylark Co Ltd, Fast Fitness Japan Inc, Bajaj Auto Ltd, Darling Ingredients, Tsh Resources and more

• After raising full-year guidance in 3QFY22 due to stronger than expected performance in the overseas business, Seven & I is scheduled to release the fourth-quarter results on 7th April 2022.
• Domestic performance has been relatively stable, but 7-Eleven Inc should outperform expectations in the US through the yen depreciation and rising fuel retail margins.
• Thus, we would buy Seven & I Holdings (3382 JP) leading up to earnings expecting substantial upside on a potentially large earnings beat.

• The YoY growth rate of product revenue accelerated in 2H21, compared to 1H21.
• In China, many cities are locked down; therefore, we believe people need online medical shopping.
• However, the stock is overvalued compared with other online and offline medical stores.

• The new draft of the e-cigarette law will crack down the domestic market.
• The revenue growth rate plunged in 2H21 despite the fact that the growth rate accelerated for the whole year 2021.
• We set a downside of 27% and a price target of HK$13.90 for 2022.

• In this insight, we provide further details of the four main business units of SK Shieldus, which is a leading one-stop shop provider for security services in Korea.
• The company has been able to improve the customer churn rate of the Physical Security (CMS) unit from 14.7% in 2019 to 11.7% in 2021. 
• The leading global cybersecurity stocks have been outperforming the market this year by a big margin which should have a positive impact on the SK Shieldus IPO.

• Discounts to NAV of holdcos have generally tightened during March: Alba, widened to 40.3%; GBL tightened to 30.7%; Heineken Holdings tightened to 17.7%; Industrivärden C tightened to 6.2%;
• Investor B tightened to 5.7%; Porsche Automobile Holding (FY 2021 results) widened to 28.8%. There is just one DLC left in this report, Rio Tinto.
• Recommended trades: GBL vs. listed assets, Porsche vs. VW (long 1 PAH3 GR/short 0.5136 VOW GR), Rio Tinto.

• Skylark HD (3197, the company) disclosed monthly data for March (on a preliminary basis)
• Same-store sales were 99.0% vs. March 2021 (93.0% for February), 92.8% vs. March 2020, and 71.0% vs. March 2019
• In March, the company opened one new store. The number of stores at the end of March was 3,094 (-3 MoM)

• We update our earnings forecast and valuation model for Fast Fitness Japan (7092, FFJ, the company) and lower our target price to 2,650 yen
• We changed our OP forecasts from 2.8bn yen to 2.9bn yen (+26.5% YoY; OPM 22.6%; company guidance 2.6bn yen) for FY3/22
• In calculating our target price of 2,650 yen, we used a residual income model (RIM) with a cost of equity of 7.0% (previously 5.5%) and a terminal growth rate of 3.0% (previously 3.5%), based on our earnings forecasts for FY3/22-FY3/27

• Since its Q3FY22 result, Bajaj Auto (BJAUT) has outperformed NIFTY50 by ~15% amid worsening outlook on profitability, rising fuel prices and flattish demand outlook in key export markets.
• Though we keep our FY23E revenue estimates largely unchanged, we trim FY23E EBITDA margin by ~300bps to ~14.5% due to surge in RM costs, resulting in 2% cut in FY24E earnings.
• Though recent cost inflation would get partially reflected in Q4FY22, bulk of it would come Q1FY23E onward.

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• Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients
• The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients.
• It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries

• Not the usual straight forward deal, in our view
• Expecting MYR712m in total cash proceeds
• Disposal price of MYR186,352 per planted hectare
• Targets for completion by 1Q23