Daily Brief Consumer: HYBE , Cello World Limited, Yue Yuen Industrial Holdings, Alibaba Group Holding , Ferrari N.V., Tata Motors Ltd, Multi Bintang Indonesia, Honasa Consumer and more

• HYBE (352820 KS)‘s second-largest shareholder, Netmarble, seeks to raise approximately US$408m through a secondary block deal, selling approximately 2.5m shares (6% of TSO). 
• The deal is a slightly large one to digest at 10.9 days of three month ADV and 5.5% of current mcap.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Cello World raised around US$230m in its India IPO and will begin trading soon.
• Cello World (CW) is an Indian consumer products company. The firm is a leading company in the consumerware market in India.
• In our previous notes, we looked at the company’s past performance and valuations. In this note, we will talk about the demand and trading dynamics

• Yue Yuen has a scalable business model with high dividend yield (6.4%). Its sales and net profit are expected to increase by 9.3% YoY and 55% YoY, respectively in 2024.
• The company is likely to enjoy higher sales and profits in 2024 due to improved footwear inventory destocking cycle, higher sales and profits at its subsidiary Pou Sheng.
• Yue Yuen Industrial is one of the largest footwear and athletic shoe manufacturers in the world. Its major customers include Nike, Adidas, Puma, and Reebok.

• We believe the financial recovery from 1Q24 will continue in 2Q24.
• We expect the operating margin will improve to 15% in 2Q24 versus 12% in 2Q23.
• Alibaba has an upside of 69% and the target will be HK$143 for the year end 2024. Buy.

• Ferrari N.V. (RACE US) had a stellar Q3 2023 with 23.5%/45% YoY overall revenue and profit growth, beating analyst estimates and conservatively upping guidance by 2-3%. 
• Despite volumes growing only 8.5% YoY, car revenues grew 26% YoY, highlighting strong trends in personalization (at 19%) and pricing, with the current order book full.
• Valuations are rich at 45x/39x FY23e/24e PE, but there seems to be a clear path to 20% YoY growth at over 25% ROCEs. 

Tata Motors has released Q2/23-24 results that significantly outperformed expectations. Revenue grew 32% y-o-y to INR 105 k cr. Reported EBITDA surged 86% to INR 14.4 k cr, with the margin expanding 430 bps to 14.9%. Automotive FCF was INR 3.9 k cr, up INR 2.9 k cr. Jaguar Land Rover and the Commercial Vehicle segment in India recorded robust growth and profits, while Q2 was a transition quarter for the Passenger Vehicle segment.

• Recovery for Multi Bintang Indonesia (MLBI IJ) has been underwhelming with revenue/PAT for Q3 2023 coming in at -3% YoY/10% YoY.
• We expect the high season (holiday/festivity season) of Q4 to be comparatively better as 9M2023 revenue/PAT tracks 7% YoY/14% YoY, below our 15% assumption. 
• We like Multi Bintang Indonesia (MLBI IJ) as we are paid to wait in the name. The correction post earnings place it at 15.4x/12.7x PE FY23e/24e and 6% dividend yield. 

• Honasa Consumer (Honasa IN) raised about US$200m in its India IPO.
• HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
• In our previous note, we looked at the company’s past performance and valuations. In this note, we talk about the trading dynamics.