Daily Brief Consumer: JD Health, ZJLD Group, Fast Retailing, Tokyo Stock Exchange Tokyo Price Index Topix, Ebiquity plc and more

• With no changes made at the March rebalance, we are still stuck at 76 index constituents. And it’s been a year later than originally planned to reach 80 index constituents.
• We list 10 potential inclusions in June. Adding all 10 stocks will lead to around 5% one-way turnover, so there could be a mix of larger and smaller stocks added.
• There will be at least 1x ADV to trade on nearly all inclusions. Short interest is over 4% of float on some stocks and there has been a recent jump.

• ZJLD Group (ZJLD HK), a baijiu company in China, is set to launch an HKEx IPO to raise US$800-900 million next week, according to press reports.
• We previously discussed the IPO in ZJLD Group IPO: The Bull Case and ZJLD Group IPO: The Bear Case. 
• In this note, we present our forecasts and take the first look at ZJLD’s potential valuation range. 

• Consensus FY+2 EBIT seems inflated by around 16%, driven by optimistic assumptions of recovery in China and growth in North America and Europe.
• However, apparel demand in China was lower than expected, while wage hikes and a potential US recession could negatively impact profitability in the short-medium term.
• As risks are skewed to the downside, we remain short Fast Retailing (9983 JP) leading up to 2QFY23 results.

• Although women should be appointed to the board of executive directors to bring women’s perspectives into management, many companies actually only appoint a few women to “non-statutory executive officer” positions.
• A survey shows that the percentage of women in management positions is about 10%, and even now there’re no signs of an increase in the number of female management executives.
• Companies seem to be reluctant to act on their own to address the obstacles that prevent women from becoming board members as a social issue.

Ebiquity reported strong FY22 results, with revenue and operating profits increasing in line with expectations. The complexity of the media market provides a supportive backdrop to its offering, designed to help brand owners optimise the efficiency of their marketing spend. The acquisitions of US-based MMi and Swedish-based Media Path in FY22 significantly scale Ebiquity’s potential revenue base, while productisation, efficiency gains, and the transition to a common technology platform give a clear path to improving margins. The company also announced the forthcoming retirement of CFO, Alan Newman, with the search for his successor well underway. The share price remains at a significant discount to peers.