Daily Brief Consumer: Dmall Inc, Dongsuh Companies, ZOZO Inc, Tencent Music, China Travel International Investment Hong Kong, Miniso, Inter Parfums, Britvic PLC, Starbucks Corp, Tokyo Stock Exchange Tokyo Price Index Topix and more

• Dmall Inc (1751691D CH) is looking to raise around US$200m in its upcoming Hong Kong IPO.
• Dmall provides cloud-based, end-to-end SaaS platform purpose-built for the Chinese retail industry.
• In this note, we will talk about the positive aspects of the deal.

• In this insight, we discuss recent insiders buying in five Korean companies including Dongsuh, Green Cross Holdings, Megastudy, Yuanta Securities, and YG Entertainment. 
• With the exception of YG Entertainment, the share prices of the four other companies are trading at nearly 50% since their peak levels in the past several years. 
• Of these five companies, three of them (YG Entertainment, Yuanta Securities, and Dongsuh Co) generated positive operating profit on a YoY basis.

• Zozo managed a 7% gain in GTVs last year which meant it grew its share of the fashion market. 
• It now has more than 10 million active users and has laid down plans to reach ¥800 billion in GTVs in the medium term.
• Zozo’s momentum is clear and its targets look realistic. Shame about the performance of Z Holdings.

• Tencent Music reported 1Q2023 results. Revenue increased 5.4% YoY to RMB7.0bn (vs consensus RMB6.9bn) while adj. OP more than doubled to RMB1.09bn (vs consensus RMB1.13bn) vs RMB518m in 1Q2022.
• Online music services revenue grew 33.8% driven by strong growth in both paying users and monthly ARPU. Social Entertainment further declined during the quarter.
• 1Q2023 earnings were primarily driven by Online music services and we do not expect a recovery in social entertainment segment’s earnings in the short-term.

• China Travel International Investment Hong Kong (308 HK) should have more upside from here given the sharp earnings recovery over FY23-25. But the market seems to have overlooked this.
• Its FY18 net profit reached HK$687m; but dipped to HK$356m loss in FY22. With its businesses now behind issues like HK social unrest and border closure, there is immense upside. 
• All of CTII’s business segments have experienced recovery in FY23, especially following the resumption of HK-mainland China traffic. Its 0.54x P/B is still 52% down from the peak. 

• MNSO reported its C1Q23 revenue (3.7%)/1.1% vs. our estimate/consensus, while non-GAAP net income beat our estimate/consensus by 17.7%/26.1% respectively, driven by gross margin ramp-up strategy and G&A reduction; 
• We think MNSO’s brand upgrade strategy is success so far, as it offered more high gross margin products without significantly diluting sales. 
• We maintain Buy rating and raise TP by US$0.5 to US$25.5 to factor in the better gross margin and store expansion outlook.

• Inter Parfums (IPAR) continuing to experience demand for its fragrances has not been enough to overcome investor concerns related to the slow demand environment in China and the duty-free segment
• IPAR’s top three brands each grew by more than 20 percent compared to last year with Jimmy Choo sales up 63 percent
• IPAR managing through its inventory balance could result in cash conversion that should improve investor sentiment

Britvic’s H1 results have demonstrated the business’s resilience, with growth in underlying revenue and EBIT margin, and only a modest volume decline during H1. Britvic has continued to execute pricing actions successfully throughout the period, with management also helping to mitigate inflationary pressures through cost efficiencies. Britvic’s brand performance remains strong, and the business continues to invest in growth capacity. The company has announced a further share buyback program of up to £75m over the next 12 months.

• Starbucks Corporation delivered a strong performance in the quarter and managed an all-around beat.
• The company achieved double-digit comp in all company-operated markets, driven by a stronger-than-expected recovery and observed ongoing momentum in its licensed markets.
• The primary drivers of revenue growth were comparable store sales, the year-over-year increase in net new company-operated stores, and the sustained momentum in the company’s worldwide license to market.

• The increase in the number of companies adopting restricted stock is a positive development, but the bias toward fixed remuneration and the non-disclosure of individual director compensation are unsolved issues.
• It’s ironic that 90% investors see ROE as equal to or lower than the cost of capital, while 93% companies know their cost of capital but only 2.3% disclose it.
• If affiliated companies with 20% shareholdings are included, there are still large number of companies covered (36.7% in the prime market), and “parent-subsidiary listings” continue to be a hot topic.