Daily Brief Consumer: Alibaba Group Holding , Shakey’s Pizza, Dream International, Wynn Macau Ltd and more

• While Alibaba (ADR) (BABA US)‘s 2Q24 revenue and OP closely matched consensus expectations, the company experienced a significant sell-off, resulting in shares plummeting by over 9% yesterday.
• Yesterday’s weak performance may be linked to a 10% pre-earnings price surge, anticipating robust results. The postponement of the Cloud Spin-off could also have contributed to the decline.
• We maintain a bearish stance on Alibaba Group Holding (9988 HK) as we identify other fundamental and structural downside catalysts might become increasingly important and price-sensitive as time progresses.

• Shakey’s Pizza (PIZZA PM) reported a 28% YoY/26% YoY sales/net profit increase for Q3 FY23 due to a sales softening in September. 
• Sales are expected to strengthen into Q4 as there is a seasonal uplift, although the QoQ increase is not expected to be in line with previous years.
• The stock trades at 12.9x/9.9x PE FY23e/24e and will continue to see double-digit CAGR sales momentum.  The management retained its >30% YoY growth target for FY23e. 

• Based in Hong Kong, Dream International is one of the largest toy manufacturers in the world. It specializes on plush stuffed toys and plastic figures. 
• Despite the global toys markets going into destocking cycle, the company has generated significant growth in operating profit in the past year driven by strong demand for plush stuffed toys.
• If we assume a moderate 20% YoY increase in dividends in 2023, this would imply DPS of HKD 0.48 and this would suggest a dividend yield of 12.7% current prices. 

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. SJM Holdings
2. Melco Resorts & Entertainment
3. Lenovo
4. Longfor Properties
5. Tata Motors Ltd

and more…