Daily Brief Consumer: Auntea Jenny (Shanghai) Industrial, Luckin Coffee, JD.com , Dongwon Industries, TSE Tokyo Price Index TOPIX, TVS Motor , Belle Fashion Group, Dr Horton Inc, Campbell Soup Co and more

• Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
• In this note, we will talk about the positive aspects of the deal.

• We cut Luckin Coffee’s 1Q24 revenue estimate by 3% to RMB7.9bn with 79% yoy and cut non-GAAP net income estimate by 42% to RMB318mn due to (1) weak sales；
• We expect 2Q24 to be the turning point for earnings due to (1) sales improving with weather warm-up (2) ASP rebound from easing competition 
• We maintain the stock as BUY rating but lower TP by US$4 to US$37 to factor in the temporary near-term weak sale.

• JD.com’s latest earnings showed a strong commitment to growth, navigating a mix of macro recoveries, seasonality factors and strategic refocus.
• They delivered a growth in net revenues by 4% and recorded a non-GAAP net income attributable to ordinary shareholders of RMB 8.4 billion.
• Cash and cash equivalents, restricted cash, and short term investments totaled RMB 198 billion.

• We provide an update of the potential KOSPI200 rebalance candidates in June 2024. 
• The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in June 2024. These 10 stocks are down on average 12.6% YTD. 
• We identified seven potential inclusion candidates. Among them, those that have low PBR multiples including HHI and Dongwon Industries could continue to outperform the market leading up to rebalance announcement. 

• It’s true that the difference in profit margins between a listed subsidiary that focuses on specific business and a parent company that has different businesses is the difference in valuations. 
• It will be difficult for a parent company to reverse the valuations of its subsidiaries until the parent company dissolves the parent-subsidiary listing and increases its own profit margins.
• With respect to corporate governance practices, companies with no major shareholders are included with relatively higher corporate governance scores, but this isn’t as significant difference as it tends to be.

• We screen our coverage universe for earnings surprises, EPS upgrades, and management narratives to identify fundamental longs.
• Stocks discussed include TVS Motor (TVSL IN), Nestle India (NEST IN), and Honasa Consumer (HONASA IN) 
• TVSL EVs could surprise, NEST offers the right safety in the current environment, and for HONASA there is a possibility of turning around. 

• Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
• In this note, we will talk about the not so positive aspects of the deal.

• Belle Fashion (BF) aims to raise up to US$1bn in its Hong Kong listing. The company recently refiled its application proof after a gap of two years.
• As per F&S, it was the largest player in China’s fashion footwear market with a 12.3% market share, based on 2022 retail sales.
• We have looked at the company’s past performance based on its earlier filings in 2022. In this note, we talk about the updates from its recent filings.

• Ed Wachenheim, founder of Greenhaven Capital, discusses his experience in the homebuilding industry since the 1980s
• Ed shares insights on the evolution of the homebuilding business model and his investment approach
• Early investment in US Home led to a deep dive into the industry, identifying growth opportunities and the impact of market crises.

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• Campbell Soup Company’s earnings were decent and the company reported moderately optimistic results and future predictions for the company.
• Clouse highlighted a sequential improvement in volume trends and year-over-year operating margin expansion in both divisions, despite slowed category trends over the last year due to economic pressures.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.