Daily Brief Consumer: CJ Corp, Rakuten Group , Pendragon PLC, Soybean Oil Active Contract, Autozone Inc, CALB Group , Greggs PLC, Ralph Lauren, Columbia Sportswear Co and more

• CJ Corp’s share price declined sharply by 10.7% to reach 80,200 won on 4 October. CJ Olive Young is the number one health & beauty store chain in Korea. 
• According to local media, CJ Olive Young is in danger of being fined large amounts of money by the Fair Trade Commission (FTC).
• It appears likely that CJ Corp’s share price could fall further close to the five year low end of the trading range (60,000 won) in the next several weeks.

• Rakuten Group (4755 JP)‘s shares plummeted 80% in 8 years, reaching ¥500 in June 2023 due to ¥1.3 trillion mobile business losses.
• Expecting a positive shift as Rakuten Mobile approaches platinum band access and subscribers poised for exponential growth following the KDDI agreement.
• We are expecting Rakuten Mobile to turn profitable next year, while the consensus is projecting an operating loss of around ¥200bn for the business.

• The game is on with the sweetened offer from Lithia, valued at 35.4p/share (24.5p divi + stake in Pinewood). Pendragon PLC (PDG LN)‘s shares are trading just below, at 35.2p.
• It is now the turn of either Hedin or AutoNation to raise their offers. 32p/share seems a fair value for the standalone business. Synergies could be worth up to 10.54p/share.
• Assuming a bidder distributes 60% of synergies to Pendragon shareholders, a potential offer price of 38.3p/share, in cash, 8% above Lithia’s offer, could still be value enhancing.

• Soybeans are crushed into soy oil and soymeal. The crush represents the Gross Processing Margin of Soybean.
• The crush has been increasingly affected by the price of soy oil compared to soymeal. Ample meal supply suppresses its prices.
• Meanwhile, soy oil prices are buoyed by supply concerns in the US as it is increasingly used to produce biodiesel.

• AutoZone delivered an all-around beat in the most recent quarterly result.
• The company achieved a total sales growth of 7.4% for the fiscal year, accompanied by a 12.9% increase in earnings per share.
• Additionally, the company has introduced new reporting metrics to provide enhanced visibility, including same-store sales results for domestic, international, and total company operations.

• CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products in China.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

Greggs continues to generate premium sales growth through a combination of volume, including market share gains as distribution increases, and price growth. The strength of underlying trading in Q323 is highlighted by management’s confirmation of consensus FY23 PBT expectations despite the addition of new costs for expanding the company’s delivery offer to a second platform and a slight delay in some store openings from the end of the year into FY24.

• Ralph Lauren managed an all-around beat in the last quarter delivering a strong performance that highlights the resilience of its strategy and the adaptability of its teams in a dynamic global environment.
• The quarter witnessed positive revenue growth that surpassed guidance, marking a return to gross margin expansion while effectively managing peak raw material costs.
• The company’s commitment to cost discipline enabled a 100 basis point expansion in adjusted operating margin, reaching 13.7%, resulting in a 9% increase in operating profit.

• Columbia Sportswear Company delivered an all-around beat in the most recent quarterly result.
• Columbia Sportswear’s expectations were essentially met as the gross margin increased by 140 basis points.
• In the quarter, net sales for the Columbia brand grew 11%.