Daily Brief Consumer: Samsonite, ZJLD Group, Skylark Co Ltd, Blackmores Ltd, Hyundai Motor, Isetan Mitsukoshi Holdings Ltd, CyberAgent Inc, Shakey’s Pizza, Tata Motors Ltd and more

• Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
• We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
• There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.

• ZJLD Group (ZJLD HK) raised around US$676m in its Hong Kong IPO.
• ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
• In this note, we will talk about the trading dynamics and valuation.

• ZJLD Group (ZJLD HK) priced its IPO at HK$10.82 per share to raise net proceeds of HK$5.0 billion (US$636 million). The shares will start trading tomorrow.
• We previously discussed the IPO in ZJLD Group IPO: The Bull Case, ZJLD Group IPO: The Bear Case and ZJLD Group IPO: Valuation Insights. 
• We expect a muted debut as A Share baijiu peers have derated since the release of the prospectus. The shares remain attractive at the IPO price. 

• The removal of COVID-19 testing requirements for Chinese tourists is expected to increase tourist arrivals from the Greater China region.
• In addition, consensus estimates for Skylark Co Ltd (3197 JP) are increasing due to the company’s faster-than-expected same-store sales recovery.
• Skylark’s annual operating profit could reach ¥20bn if revenues return to pre-COVID levels, which is significantly higher than consensus of ¥5.2bn and guidance of ¥6.0bn.

• Blackmores Ltd (BKL AU) has signed a Scheme Implementation Deed with Kirin Holdings (2503 JP) for the acquisition of 100% of Blackmores by way of a scheme of arrangement.
• The A$95/share offer is a 23.7% premium to the last close and is at least a 20% premium to most other VWAPs.
• Blackmores Ltd (BKL AU) intends to pay a fully-franked special dividend of A$3.34/share. This will enable eligible shareholders to benefit from franking credits of A$1.43/share.

• We discuss the importance of Hyundai Motor generating nearly 11.5 trillion won in operating profit in 2023, which is likely to be the highest among all Korean companies. 
• Hyundai Motor and Kia Corp combined are expected to generate operating profit of 20.7 trillion won in 2023, representing 57% of total operating profit of the top 10 Korean companies.
• In 2023, Hyundai Motor plans a full-scale world-wide roll-out of its EV Ioniq 6. Furthermore, it set a dividend payout ratio at 25% or higher.

• Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. 
• The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
• While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.

• CA reported 2QFY09/2023 results today. Revenue increased 2.4% YoY to ¥195.6bn (vs consensus ¥191.0bn) while operating profit declined 27.0% YoY to ¥18.8bn (vs consensus ¥18.0bn).
• The viewership for AbemaTV has fallen back to pre-FIFA levels and revenue growth from AbemaTV has been on a declining trend.
• CA didn’t release any gaming titles despite mentioning about 3 for 2022. The company has mentioned about 2 titles for FY09/2023 and the segment seems struggling with producing hit titles.

• Shakey’s Pizza (PIZZA PM) came in higher than analysts on earnings for FY22, posting an 873 mn peso bottom line number (vs. a 728 mn peso Bloomberg consensus).   
• Systemwide sales grew 101% YoY to 14.1 bn pesos, with 4.5 bn pesos in the last quarter, up 113% YoY. Excluding Potato Corner, growth for the year was 37% YoY.
• Based on their guidance for FY23 of 20% growth on the topline/bottom line, the stock trades at 13.7x FY23e PE with future growth in the mid-teens CAGR. 

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.

• Country Garden Holdings Co
• Tata Motors ADR
• Xiaomi Corp