Daily Brief Consumer: Anta Sports Products, Chokwang Leather, Tesla , Shimano Inc, Lululemon Athletica, ZEEKR, Fosun Tourism, Headlam, Meituan, Build A Bear Workshop and more

• Anta Sports Products (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in post conference calls. 
• Anta: Retail sales started to accelerate in mid-March, and March were better than January and February. 
• Li Ning:  offline retail sales down low-single-digit in 1Q24, driven by wholesale down mid-single-digit, while retail grew mid-single-digit.  E-commerce grew 20-30% yoy.  

• At the end of 2023, Chokwang Leather owned 190.3 billion won worth of Berkshire Hathaway shares, which represents 56% of Chokwang Leather’s market cap. 
• Chokwang Leather also has 3.1 million treasury shares (46.6% of outstanding shares). It has the highest levels of treasury shares as a percentage of outstanding shares among Korean stocks.
• Chokwang Leather is likely to be one of the key companies to be targeted to improve its corporate governance as part of the Corporate Value Up program. 

• Plunging sales & growing losses, severe price cuts & layoffs, failed FSD, M2 dropped for Robotaxi, and more, confirm that Elon Musk won’t fix Tesla’s most serious problems—which he created.
• He still demands his “unfathomable” pay package be restored, and his feckless, captured Tesla Board is doing exactly what he wants.
• But what Tesla’s Board should do, what it should have done years ago, is fire Elon Musk, the single greatest risk to Tesla’s future.

• Shimano continues to reel from a slowdown in bike and fishing tackle sales post Covid
• 1Q operating profit beat the analyst consensus, but the upward revision to full year is minor and falls short of street estimates
• The stock has priced in an improving outlook. However, valuations are now looking full compared to historical levels. 

• On March 21st, Lululemon reported FY23 results. All things considered, the results were good. Guidance, however, caused some upset. Lululemon shares are down ~29% this year; after being down just 6% before the report, and is currently the 8th worst-performing stock in the S&P 500.
• Lululemon’s implied 11.5% revenue growth for 2024 is a notable deceleration from years prior; having averaged an annual revenue growth rate of 24.4% over the last 5 years.
• This year’s revenue guidance is closer to, but still behind, the 5 years before that; where Lululemon averaged 15.7% annual revenue growth.

• ZEEKR, a Chinese EV maker, plans to raise up to $500M in US IPO. The company put its offering on hold in 2023 due to a mismatch in valuation expectations.
• A fast-growing company will offer ADSs, and the size of the company’s potential IPO is down from their initial target of up to $1B, a negative sign for ZEEKR shares.
• EV stocks have significantly underperformed the broader market this year amid price wars, slow growth ahead and intense competition, especially in China.  

• Fosun Tourism (1992 HK) saw a healthy 15.8% overall business volume growth in 1Q24, with net profit sustaining improvement. This should justify a catch-up in share price.
• The cumulative bookings for Club Med for 1H24 have increased 13% YoY, while those for 2H24 have increased 10%. Positive forward bookings indicate an encouraging outlook.
• Four new Club Med resorts to be opened in 2024 and the increase in attractiveness of Hainan after it turns into a duty-free island by 2025 are both drivers.   

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-term average EV/sales multiple for FY24.

• Meituan has navigated through its most challenging period since IPO as competition moderates and reorg comes close to completion. 
• 1Q results should kick off an upward earnings cycle through to the end of 2024 when the company’s efforts to revamp loss-making new initiative businesses gather pace. 
• That said, lack of clear topline driver remains the key reason for our cautious view about the sustainability of re-rating. Maintain neutral.

• We are reiterating our Buy rating, projections and $41 price target for Build-A-Bear Workshop after visiting stores in Long Island and Connecticut.
• Post-Easter, Build-A-Bear has expanded the product mix both large and small, adding giant versions of key “furry friends” and rolling out new Mini Beans to drive incremental add-on purchases.
• Further, with graduation season just starting (from pre-K to college), Build-A-Bear is ready with fun and unique items for every grad.