In today’s briefing:
- Melco Trading “Cheap” As Macau Opens Up
- Seven & I’s Valuation Nears Breaking Point
- Allied Blenders and Distillers Pre-IPO – Yet to Recover from COVID-19
- DoorDash Inc.: Initiation of Coverage – Recent Collaborations & Other Drivers
Melco Trading “Cheap” As Macau Opens Up
- After Macau’s government renewed the concession periods for the city’s six incumbent gambling concessionaires for another 10 years, the key players are up 86% on average
- Both Melco International Development (200 HK) and Melco Resorts & Entertainment (MLCO US) have gained a little over 100%.
- Melco’s NAV discount is back out to 36%. The simple ratio – Melco/MCLO – is around the lowest level since Melco began consolidating MCLO in early 2017.
Seven & I’s Valuation Nears Breaking Point
- Seven & I Holdings (3382 JP)‘s Q3 OP of ¥160.1bn was a significant surprise to the upside with consensus OP at ¥130.2bn and us expecting around ¥125-130bn.
- This was mostly driven by an unexpected upside to the retail fuel margin while gasoline prices have come down by more than 34%.
- Nevertheless, we would expect this temporary misalignment in retail fuel margin to correct over the next few quarters, resulting in around 35-40% downside to the company’s valuation multiples.
Allied Blenders and Distillers Pre-IPO – Yet to Recover from COVID-19
- Allied Blenders & Distillers (ABD IN) is looking to raise about US$250m in its upcoming India IPO. I-Sec, Axis Capital, JM Financial, Kotak and Equirus Capital will be the bookrunners.
- ABD is the largest Indian-owned Indian-made foreign liquor (IMFL) company and the third largest IMFL company in India, in terms of annual sales volumes between FY14 and FY21.
- ABD has grown its brand over time and managed to stay profitable, despite COVID-19. However, sales volume has yet to return to pre-COVID levels, along with its profitability.
DoorDash Inc.: Initiation of Coverage – Recent Collaborations & Other Drivers
- This is our first report on DoorDash, the largest online food aggregator in the U.S.
- The company is a market leader in its domain and has demonstrated incredible resilience.
- Even in the last quarter, its market revenues have increased significantly despite the oil crisis, relatively persistent inflation, and the European war.
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