Daily Brief Consumer: JD.com Inc., Melco International Development, Seven & I Holdings, Adastria Co Ltd, The Keepers Holdings, Guoquan Food (Shanghai), Tokyo Stock Exchange Tokyo Price Index Topix, Luckin Coffee, Kura Sushi Inc, Connect and more

• JD.com Inc (9618 HK) has declined heavily in 2023 (-44.5%), producing a new 5 month low of 143.50 on 13 April 2023.
• The 143.50 low was plagued by extreme ST momentum failure and the new low was quick to fail and reverse.
• Our TSS methodology triggered a TSS < 10 at the low and justifies a further 9-18% upswing in the coming 1-2 weeks.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• Stocks mentioned in this insight include: Melco International Development (200 HK), CMGE Tech (302 HK), Differ Group Auto (6878 HK), and Sino Biopharmaceutical (1177 HK)

• Retail media in its traditional sense is nothing new, simply referring to the use of advertising in stores, but in modern terms retail media is something far, far bigger. 
• It is not only a trend in the US, but one that is about to explode in Japan – although in a very different format.
• With purchase rates up two-fold in early experiments, the potential for brands advertising through retail stores will be significant with some estimates suggesting a ¥20 trillion market.

• Adastria is on a roll, capturing more market share in both the core apparel market as well as through licensing (Forever 21) and home decoration and other lifestyle markets.
• Until now, it has focused on slightly premium mass markets but a new chain will face Uniqlo and Muji head on in apparel basics.
• It is also adding a new basics chain in home decoration and hoovering up contracts to supply apparel to chain stores. 

• The Keepers Holdings (KEEPR PM) declares its FY22 results on the 14th of April 2023, and Shakey’s Pizza (PIZZA PM) on the 20th of April 2023. 
• Despite its recent move upwards, The Keepers Holdings (KEEPR PM) trades at 9.6x/7.5x FY22e/23e PE and Shakey’s Pizza (PIZZA PM) at 17.7x/11.3x FY22e/23e, with both boasting high double-digit future growth.
• We discuss our expectations on the results for FY22 and prospects for Q1 2023. For mid/small-cap investors, these are great companies to invest in for exposure to the Philippines.

• Guoquan Food (Shanghai) (1786512D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
• Guoquan Food (Shanghai) is a home meal solutions provider in China.
• Offering a wide variety of home meal solutions products under its Guoquan Shihui (鍋圈食匯) brand, the firm had a total of 755 SKUs as of Dec 22. 

• The items to be disclosed by 300 listed companies with active women are expected to be disclosed in the Human Capital section of the Sustainability section of Annual Securities Report.
• Investors will now decide whether these disclosure items have an impact on their investment or whether they need to seek disclosure of further material factors.
• In Metrical universe, the ratio of female executives is also useful for investment tips, as it has been found to have a significant positive correlation with ROA and Tobin’s q.

• We expect Luckin to report 1Q23 revenue at 77.0% YoY to RMB4,257mn, non-GAAP operating margin and net margin are expected to increase 12.6ppt and 9.1ppt to 16.4% and 13.2%; 
• We think the current moderate competition can bring positive externality to coffee players, whereas it may hurt street tea shops; 
• We maintain the stock as BUY and raise TP by US$1 to US$41.

• The memo I shared about Kura Sushi five days ago had two conclusions.
• The fundamentals of the business continue to endure and the company was going to have to raise cash fairly soon.
• I noted that “I believe within the next 6-12 months, we may see Kura issue additional stock or tap into their credit line”.

Smiths News announced yesterday that it has secured its fifth major publisher contract renewal with News UK & Ireland, publisher of The Sun, The Times and The Sunday Times. This follows new five-year agreements with Associated Newspapers, Telegraph Media Group (TMG), Frontline and Seymour Distribution, which collectively account for 65% of current newspaper and magazine revenues. We expect additional contract renewals to be secured in the next year. These renewals bolster the company’s cash-generative business model, providing a steady stream of revenue up to 2029/30. Our valuation remains unchanged at 89p, representing 78% upside to the current share price.