Daily Brief Consumer: Asahi Group Holdings, Fenbi Ltd, Hainan Island Construction, Vinfast, Zensho Holdings, BYD, Porsche Automobil Holding , Tongcheng Travel Holdings , Studio City International Holdings Limited and more

• A group of shareholders aims to raise US$1.3bn (JPY197.8bn) by selling their respective stakes in Asahi Group Holdings (2502 JP) via an extended secondary follow-on.
• We have covered the background of the deal in our earlier note, Asahi Group Placement – Relatively Small One when Compared to Previous Large JP Secondary Selldowns.
• In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.

• The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 8 December.
• Fenbi Ltd (2469 HK) and YSB (9885 HK) will be added to the index and there are no deletions.
• There is a big lock-up expiry in YSB (9885 HK) soon after the index inclusion and this could be an opportunity to access liquidity in the stock.

• After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.
• CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.
• In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.

• Vinfast (VFS US), a Vietnamese EV manufacturer and a majority-owned affiliate of Vingroup Jsc (VIC VN), completed its merger with Black Spade on 14 August. 
• Due to the low float, the shares have been on a wild ride, with the last close of US$6.56 materially below the high of US$82.35 per share.
• VinFast remains an avoid due to related party-driven EV sales, declining customer traction, operating losses, cash burn, equity raise overhang and frothy valuation.  

• Zensho Holdings (7550 JP) aims to raise around US$300m via a public offering.
• As per the company it will use the proceeds from the deal for potential M&A transactions.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• Tesla Motors (TSLA US) market share in China has decreased and its 3Q23 operational data suggested it offered discounts to defend its market share. 
• Albeit losing some market share, BYD (1211 HK) operational data is much more solid, even expanded its profit margin during a difficult environment in China. 
• Tesla share price has outpaced BYD’s this year by 70%, it should reverse in the next year.

• My updated SOTP shows that Porsche Automobil Holding (PAH3 GR) is trading at a still massive 41.2% discount/NAV, implying that Porsche SE is liable for c. €6.5 billion legal claims, maybe too harsh.
• Recent rulings have been favourable. The discount is partly due to capital allocation leaning towards debt servicing. Porsche SE is trading at 2024e 2.6x Fwd P/E and 7.3% dividend yield.
• Porsche SE presents an attractive opportunity to gain exposure to Volkswagen and Porsche AG through a discounted and levered investment. Discount to NAV should systematically decrease.

• Tongcheng Travel Holdings (780 HK) is best positioned to capture post-COVID travel, especially in lower-tier cities. This is reflected in a 146.5% growth in 3Q23 adjusted net profit.
• The cooperation with Tencent (700 HK) continues to bear fruits and will drive accelerated momentum as it leverages on QQ Browser, Weixin mini-program, and Tencent Docs.
• 3Q23 net cash increased 1.5x from the end-FY22 level and now represents 10.9% of market capitalisation. Its earnings valuations are attractive relative to both growth and peers.

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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