Daily Brief Consumer: Fast Retailing, Meituan, Delta Corp Ltd, ATRenew , TSE Tokyo Price Index TOPIX, Cake Box Holdings , Cafe De Coral Holdings, Leef Brands , CaoCao Inc, Nexteq and more

• The review period for the Nikkei 225 (NKY INDEX) September rebalance ends in July. There could be three changes at the rebalance with sector balance in focus for the additions.
• Depending on the changes, passive trackers will need to buy between 5-16x ADV (10.1%-24% of real float) on the inclusions and sell between 4-42x ADV on the deletions.
• Fast Retailing (9983 JP) will be capped to 10% of the index weight while Tokyo Electron (8035 JP) is also close to the 10% cap.

• We upgrade Meituan because we believe its success in Hong Kong might be replicable on a global scale. 
• The upcoming autonomous driving (ADS) revolution has deep and fundamental implications in permanently cutting Meituan’s logistic cost;
• We upgrade the stock from SELL to BUY and raise TP to HK$150/share

• Delta Corp Ltd (DELTA IN) sells its Nepal casino business to Ability Games amidst allegations of connections to illegal betting and money laundering.
• The ED’s investigations into Mahadev Online Book reveal a Rs 3,916 crore scam, freezing of Rs 580.78 crore assets, and involvement of companies like Ability Games.
• CEO of Delta Corp Ltd (DELTA IN)mentioned in ED statement that they have agreed for 10Crs over and above the transaction value.

• Despite a slightly flatter revenue/margin trajectory outlook, we remain optimistic that ATRenew’s differentiated pre-owned consumer electronics transactions and services platform in China will continue to drive outsized growth in transaction volumes, sales, fees, and profits over the long run.
• While RERE has meaningfully outperformed recently, we believe current levels for the stock still provide investors with an attractive entry point, as awareness and appreciation of the company’s business model, growth prospects, competitive positioning, and valuation disconnect increasingly take hold.
• Despite what we believe to be conservative inputs/assumptions, our DCF model suggests a wide disconnect between ATRenew’s fundamentals and the stock’s current price.

• The reason why the approval for the shareholder proposal on profit appropriation exceeded 40% is that the proposal was easy to understand and easy to get approval from other shareholders.
• Although domestic institutional investors don’t currently vote against a low ROE when it comes to improvement measures, they may take a more aggressive stance if ISS raises its ROE criteria.
• The trend of top management being reappointed even with continued low ROE is likely to continue for a while longer, but the time frame is definitely getting smaller.

• Cake Box PLC is a UK-based franchisor of specialist cake shops with over 200 franchise stores
• Strong financial foundation with high return on equity and owner-led management team
• Focus on egg-free cakes in off-high street locations has led to successful growth and plans for further expansion.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Café de Coral faced challenges during COVID-19 but is now showing signs of recovery with the removal of restrictions and return of tourists
• If revenues and operating margin return to pre-pandemic levels, the stock could trade at a favorable P/E ratio and dividend yield
• Strong shareholder confidence through additional share purchases indicates Café de Coral is poised for success in the post-pandemic market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• LEEF Brands (CSE: LEEF, OTCQX: LEEEF) is a scaled, vertically integrated operator in California.
• It holds the largest cultivation permit in Santa Barbara County, owns LEEF Labs, one of the state’s largest manufacturing companies, and has The Leaf dispensary in Palm Springs.
• The company recently successfully restructured its debt. 

• CaoCao Inc (1646553D CH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are Huatai, ABC International, and GF Securities.
• CaoCao Inc (CaoCao) is a ride-hailing firm incubated by the Zhejiang Geely Holding Group (Geely).
• According to Frost & Sullivan (F&S), the firm has consistently ranked as the top three ride hailing platforms in China based on gross transaction value (GTV) between 2021-2023.

• Manufacturers utilize NXQ’s graphical interfaces and touchscreens to enhance user experience and operational efficiency in machinery.
• Nexteq PLC has introduced a new range of gaming cabinets with advanced features and enhanced performance.
• The company remains committed to delivering innovative solutions in multiple industries, prioritizing improved user experiences and operational efficiency through their technology.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.