Daily Brief Consumer: Oriental Land, Kurabo Industries, Hankook & Company, Credo Brands Marketing, China East Education , Soybean Active Contract, Ricegrowers Ltd, Games Workshop Group PLC, Tsuruha Holdings and more

• Google Search trends for Tokyo Disneyland and DisneySea in recent months point to potential vulnerabilities in Oriental Land’s FQ3 performance.
• Tokyo Disneyland’s rising ticket prices have narrowed the cost gap with Shanghai and Hong Kong Disneyland, potentially leading to a loss of customers to its counterparts.
• Should Oriental Land (4661 JP) shares fail to surpass its recent peak in January next year, we think shares could undergo a rather substantial correction.

• Kurabo announced a bigly buyback on Tuesday. At last price it is equivalent to 8+% of shares out. Most likely to target buybacks from cross-holders. 
• The company is not cash-rich, but it is financial asset and real estate-rich. And it trades at cheap multiples without even thinking about those assets (themselves worth the market cap).
• The TSE’s “PBR1 OR BUST” movement combined with starting low valuation, high payout, excess assets, mean this value trap has room to move. 

• The Cho brothers are currently sparring over control of Hankook & Company (000240 KS), and in turn, its 30.7% stake in Hankook Tire (161390 KS).
• After the honorary chairman of Hankook backed the younger son (& chairman of Hankook), PE-outfit MBK, aligned with the elder son, bumped its public tender Offer by 20% to ₩24,000/share.
• Hankook is currently trading 27.3% adrift of the revised terms. That pretty much sums up the situation. The public tender closes on December 25. However, December 23-25 are holidays.

• Credo Brands (Mufti) (CREDO IN) IPO opens as a full OFS worth INR 5.5 bn. 
• The company operates ‘Mufti’ which is one of the renowned brands in Indian Men Casual Fashion category. 
• CMBL faces several questions including employee pay vs KMP, accounting for unsold inventory, delay in important payments, conflict of interest with BoD/SMPs etc.

• China East Education (667 HK) is interesting as it is probably the only education company with no debt. Net cash amounted to Rmb2.1bn, or 42% of its market capitalisation. 
• Earnings have bottomed out and the marginal YoY decline in 1H23 is due to upfront costs for staff recruitment. Its vocational education focus also faces fewer regulatory risks.
• We consider it a potential privatisation candidate at 0.8x P/B. Its major shareholders owned 75% of the company, leaving a free float of less than HK$1.4bn.

• Soybean futures maintained above USc 1,300/bushel indicating continued strong support at the level.
• Large export sales announcements continued over the last week, through November, net Soybean sales from the US were higher than their 5Y average. December pace remains strong too.
• CONAB cut production forecast for Soybean in Brazil due to unfavorable weather over November. Weather has improved recently with rains expected in key agricultural region.

• Ricegrowers Limited, trading as SunRice (ASX:SGLLV), has released its H1 FY24 results, delivering RaaS adjusted EBITDA of $69m (+68%) and adjusted NPAT of $33.3m (+107%), both well above RaaS estimates of $57.6m and $25m respectively.
• Divisionally the key surprise was International, delivering adjusted EBITDA of $33m, 125% above the PCP and 57% above RaaS estimates on the back of increases scale and reach, price increases and lower freight costs.
• Operating cash flow was the strongest since H2 FY18 despite a high tax payment as working capital improved from lower receivables and inventory reductions. 

Games Workshop Group (GAW) has signed an agreement with Amazon Content Services, a subsidiary of Amazon.com, to prospectively develop GAW’s intellectual property (IP) into film and television content and to grant associated merchandising rights, initially focused on the Warhammer 40k universe. The partnership follows the announcement in December 2022 when management said an agreement had been reached in principle. Although the content will mainly be focused on GAW’s Warhammer 40k, Amazon has the option to develop other IP within GAW’s fantasy universe following the initial release. The first year has been set out as a period for creative discussions, after which the agreement will go ahead if both GAW and Amazon sign off on the creative guidelines.

• Tsuruha sees itself as another recent victim of activist fund pressure. 
• The No. 2 drugstore chain has grown successfully over the past decade and today has the widest store coverage of any chain in its sector.
• This summer Aeon supported activists’ demand for strategic change. Tsuruha thinks the only way it can keep its independence may be to take the company private – Aeon probably agrees.