Daily Brief Consumer: Oriental Land, Miniso, Coupang, China Tourism Group Duty Free Corp Ltd, Yaoko Co Ltd, Garrett Motion, Pan Brothers, Chipotle Mexican Grill, Kimberly Clark, General Motors and more

• With the review period for the September rebalance of the Nikkei 225 (NKY INDEX) complete, we take a look at the potential inclusions and exclusions for the index.
• The conclusions of the market consultation have been announced and that will mean we switch to a semi-annual rebalance. So we take a look at potential changes in March 2023.
• The announcement of the changes for the next rebalance should be made in the first week of September and will be implemented at the close on 30 September.

• Blue Orca issued a damning short-seller report on Miniso (MNSO US) on the 25th of July 2022, stating that the company’s asset-light and high-margin franchise business is mostly a lie.
• Miniso responded rather quickly but its response lacks evidence and does not do anything to contradict the facts presented by the short seller.
• Thus, it is Miniso’s word against Blue Ocra’s facts and it is quite obvious which side investors should take.

• In this insight, we discuss a pair trade between E Mart Inc (long) and Coupang (short). At current valuations and business outlook, we like the risk/reward of this pair trade.
• The end of the mandatory shut down rules on major hypermarkets is likely to have a major positive impact on Emart and negative impact on Coupang and Kurly.
• Although this has not been made into law, we think there is relatively high probability that this will eventually be made into law sometime this year. 

• China Tourism Group Duty Free Corporation Limited (CDF) now aims to raise US$2-3bn in its H-share listing in Hong Kong.
• As per Frost & Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
• In this note, we will talk about the recent updates from its revised filings and revisit valuations.

• Yaoko opened a discount supermarket last year and added a second in March, using knowhow acquired from the Ave chain it bought in 2017. 
• The new store is purpose built to save costs and offer lower prices, and should prove popular as inflation rises, while delivering higher margins than supermarkets typically achieve.
• The format stands in marked contrast to other discounters such as Kobe Bussan (3038 JP)’s Gyomu Super but both formats show that discounters can make more money than other supermarkets.

• GTX has started to see order trends stabilize after renewed volatility earlier in the year. GTX reported second quarter results with adjusted EBITDA slightly better than our expectations
• There has been growing overhang on to the impact the stronger Dollar would have on the business. The decline in the Euro resulted in lower sales than we had projected.
• GTX used the second quarter earnings call to bring attention to its work with several automakers on turbochargers for H2 engines which use hydrogen

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.

• Pan Brothers
• Sino-Ocean Service
• Vedanta Resources

• Chipotle Mexican Grill has been in the news for an amazing rebound in its stock price after delivering a robust set of results surpassing Wall Street expectations in terms of earnings.
• The in-restaurant sales increased while digital sales were also up and the management added 51 new restaurants in 42 locations.
• We provide the stock of Chipotle Mexican Grill with a ‘Hold’ rating with a revision in the target price.

• Kimberly-Clark Corporation had a decent quarter and managed to surpass Wall Street expectations in terms of revenues as well as earnings.
• The company delivered an impressive 9% growth in organic sales with all segments delivered robust gains.
• The company navigates near-time headwinds based on near-time headwinds of breadth and pace of its pricing actions.

• After many months of a consistently bad performance in terms of the stock price as well as issues associated with chip shortages, General Motors has finally seen a bit of a reversal in the past few weeks.
• The company is making significant progress in various fonts, which includes its supply chain as well as Cruise Commercialization.
• We provide a ‘Hold’ rating to the stock of General Motors with a revision in the target price.