Daily Brief Consumer: Miniso, Tokyo Stock Exchange Tokyo Price Index Topix, Nasdaq-100 Stock Index, Li Auto, Borussia Dortmund GmbH & Co KG, Kellogg Co, Home Depot Inc, Tjx Companies, DoorDash Inc and more

• Miniso reported its C4Q22 revenue at RMB2,494mn, (2.6%)/1.1% vs. our estimate/consensus,  non-GAAP net income at RMB373mn, 27.8%/29.0% higher than our estimate/consensus; 
• We expect Miniso’s revenue to achieve 33% YoY in C2023, driven by 1) the store expansion in both domestic and overseas market, 2) domestic single store revenue recovered;
• We maintain the stock as BUY rating, and raise TP by US$2 to US$24, reflecting Miniso’s expansion of domestic store network in low tier cities

• Increasing numbers of companies with P/Bs below 1x suggest that they failed to deliver to investors plan that would have increased their corporate value, or that such plan didn’t materialize.
• While P/B has remained mostly in range, the increase in the number of companies with low P/Bs can be attributed to the widening gap in profitability among companies.
• If the difference in profitability depends on the development and execution of management strategies, it depends on the quality of management. The appointment of directors will be very important.

• In last week’s Compass (Feb. 22) we discussed our belief that a pullback has begun, and signs continue to point to more downside ahead on the broad market indexes
• There has been four failed attempts to reclaim $190 on the Russell 2000 (IWM) and $297 on the Nasdaq 100 (QQQ) over the last five trading days.
• These remain important lines in the sand moving forward. Attractive stocks: TPX, LZB, SNBR, ETD, HOFT, FLXS, KEX, SBLK, CMRE, DAC, EGLE, GNK, ASC, GSL, DSX, SB, NM, EURN, more

• Li Auto reported 4Q22 top line in line, and bottom line beating consensus and our estimate, thanks to recovered vehicle margin and improved SG&A efficiency. 
• We reiterate Li Auto as our top pick, because of 1) positive growth outlook in 2023 driven by intact model cycle (L9/L8/L7); 
• 2) margin upside in 2023 driven by expanded scale economy and sharing of auto parts among its product line-ups; and 3) less impacted by Tesla’s price war.

Borussia Dortmund’s Q223 results reflect the negative effects of the first time staging of the FIFA World Cup during the football season, offset by underlying improvements due to the absence of COVID-19-related restrictions. The company’s financial results are more dependent on H2 than in a typical year due to the changes in scheduling. However, the first team appears well placed in the Bundesliga and has made good progress in the Union of European Football Associations (UEFA) Champions League. Management has reiterated its FY23 guidance. The share price continues to look well supported by our asset backed sum-of-the-parts valuation, which has increased to €11.3/share (€10.5/share previously).

• The recently announced restructuring is unlikely to be the silver bullet that many investors are expecting.
• Kellogg is now faced with the challenge of improving gross margins.
• The high dividend yield is also not as attractive once we factor in the probability of future dividend growth, says Kellogg.

• Home Depot gave a decent performance this quarter though its growth in sales was below Wall Street expectations.
• Pro sales growth outpaced DIY.
• We give Home Depot a ‘Hold’ rating with a revised target price.

• TJX is off to a strong start to fiscal 2023 and delivered a better-than-anticipated top-line performance in the last quarter.
• The company’s better-than-expected US comp store sales increased, driven by an excellent performance at its Marmaxx division.
• Internationally, its TJX International and TJX Canada divisions’ performance was good.

• DoorDash delivered a mixed result with revenues above market expectations given its single-minded focus on building scale.
• U.S. convenience and grocery business rose 60% year on year in Q4, continually growing at significantly faster rates than restaurants.
• However, all the revenue growth came for a price as the company’s losses were significantly wider than Wall Street expectations.