Daily Brief Consumer: LOTTE Corporation, Playmates Toys, Koolearn, RPSG Ventures Limited, Light & Wonder , NIO Inc, Tokyo Stock Exchange Tokyo Price Index Topix, Onward Holdings, Health And Happiness (H&H) and more

• The local market believes that the FSS plans to push forward with the 10% limitation measure. Last week’s seminar served as a proactive way to inform the market about it.
• The market is paying attention to the potential emergence of stock overhang risks due to the establishment of limits on listed companies’ treasury stock holdings.
• Lotte Holdings and Doosan Corp are considered to fall into this category. They may attempt to sell treasury stock early on to meet the 10% limit.

• 1983 was the year both TMNT and Mario Bros were created by two different animation studios
• Mario Bros latest movie has now grossed $1.3 billion in box office receipts YTD, entering the all-time top-3 of animated movies 
• TNMT will see its debut in US theatres on the 2nd of August 2023. Will the turtles get the same reception as Mario Bros?

• We expect one change to the Hang Seng Tech Index (HSTECH INDEX) in September – though there could be a second change as well.
• Estimated one-way turnover is 2.13% resulting in a one-way trade of HK$2.01bn in case there are two index changes. Turnover will be lower if there is only one change.
• Short interest on some of the potential changes is over 15% of float and there could be big moves on the stocks post announcement of the changes.

• IPL 2023 concluded recently with record streaming views and TV viewership. This bodes well for the valuation of the IPL Lucknow franchise owned by RPSG Ventures Limited (RPSGVENT IN) [“RPSGV”]. 
• FMCG business is currently doing a run-rate of INR 400cr+ revenue, however, needs to scale up faster. To drive this, Too Yumm! has entered into a new category, traditional Namkeens.
• The Firstsource Solutions business seems to be bottoming out. Operating margin has stabilized in the 11.5-12% range. FY23 revenues de-grew at -1.1% YoY as guided at -1% to -2%.

• 2022 saw Light and Wonder make a major strategic pivot from legacy units to focus on three core businesses: Gaming equipment and systems, social online gaming and IGaming.
• Recent move to acquire the 17% of SciPlay social gaming platform it does not own has evoked investor interest in the sector due to a 29% premium on offer.
• After taking a big tax hit related to the sale of two of its legacy verticals the company is well positioned to compete for rising Asia-Pacific gaming equipment business.

• We think by adopting the new strategy to unbind vehicle sales with battery swapping, NIO could broaden its customer base to non-Yangtze-Delta regions and regain price competitiveness.
• We upgrade to BUY and raise TP to US$ 10.5, due to 1) recovered growth outlook brought by widened customer base, more competitive pricing and intact model cycle
• And 2) smaller-than-feared margin pressure. Our TP implies 2x PS. 

• The fact that men occupy most of the highly compensated positions has increased the wage gap between men and women, so solutions must start with correcting the male-dominated social structure.
• Not only is no acceleration seen in PM Kishida’s target for % of female executives by 2030, but it’s only goal, not commitment, as it applies only to top-tier companies.
• At this point, the only thing that can be done is for investors who have analyzed human capital disclosures in annual securities reports to persistently press companies to make improvements.

• FY2022 was the best year in a decade for Japan’s big apparel firms. Brands benefitted from the return to shops, particularly department stores.
• Some of the leaders used the pandemic to make further progress in rationalisation, diversification and omnichannel, creating solid foundations for further growth in market share.
• Sanyo Shokai finally made a profit but has stuck to what it knows, which may lead to problems once the rebound dividend wanes.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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