Daily Brief Consumer: Alibaba Group Holding , Astra International, Shakey’s Pizza, The Keepers Holdings, Vitesco Technologies Group, Lawson Inc, Tata Motors Ltd and more

• Freshippo opened its first high-end supermarket, Premier, in Shanghai in September.
• We believe it is a good idea to take business from independent stores and small store chains.
• However, we do not believe those foreigner-oriented foods will be popular.

• HDFC Bank (HDFCB IN) is the largest buy (XSOE) – estimated flow $44m. Grupo Financiero Banorte SAB d (GFNORTEO MF) is the 2nd largest buy – estimated flow $40m.
• Wistron Corp (3231 TT) is the largest sell – estimated flow $68m. POSCO Holdings (005490 KS) is the 2nd largest sell – estimated flow $59m.
• Our estimate for the total value of new constituent buys is $1.38bn. We expect deletions to the value of $1.41bn to be sold down across the 3 funds.

• Shakey’s Pizza (PIZZA PM) is set to declare its Q3 2023 result in the 2nd week of November. We expect revenue/earnings growth of 41%YoY/44%YoY. 
• Q4 is the seasonally highest growth quarter, where the company makes 40% of its annual profits. A strong Q1-Q3 sets up a solid end to the year. 
• We believe the company will easily be able to meet or beat its guidance of 30% revenue and profit growth for FY23. Stock trades at 13x/9.8x PE FY23e/24e.

• The Keepers Holdings (KEEPR PM) is set to declare Q3 2023 earnings in the 2nd week of November. We expect the company to report a 9%/18% YoY revenue/net profit growth.
• We expect a steady improvement in Bodegas W&H and operations and overall gross profit margins to remain stable at 26-27%. 
• The stock is cheap at 7.7x/6.6x FY23e/24e with a 5.1%/5.9% dividend yield and 10% of the market capitalization in cash. 

• Schaeffler (SHA GR) offers €91.00/share for Vitesco Technologies Group (VTSC GR), in cash, 20% premium to 3-month VWAP, 3.3x EV/Fwd EBITDA. There is no minimum acceptance rate.
• Later Schaeffler will unify its share classes (current voting ratio 3.01) to use them as currency for Vitesco shareholders not accepting the cash offer (essentially the parent company of Schaeffler).
• Vitesco shareholders are being generously rewarded (my fair value estimate is #€74/share), I believe most will tender. Spread is 1.04%/3.70% (gross/annualised, assuming settlement by 31 January). I’d buy below €90/share.

• Seijo Ishii is Japan’s leading premium supermarket chain with some 200 stores and is being prepped for an IPO by its owner, Lawson. 
• After strong growth during Covid, sales have now flattened and the company’s large import business has suffered from higher costs due to the weak Yen and global crises.
• To maintain its market position, it is reducing imports of packaged goods and increasing volumes of imported, high-end raw materials – and then manufacturing products itself.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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