Daily Brief Consumer: Muyuan Foods Co, Yadea, Amos Food Group, PDD Holdings, Coca-Cola Europacific Partners, Copart, TSE Tokyo Price Index TOPIX, Es Con Japan and more

• Muyuan Foods Co (2714 HK) (MF), a leader in the hog farming industry, raised around US$1.6bn in its H-share listing. Its cornerstone investors will soon be released from their lockup.
• MF is a leading pork company with over 30 years of expertise in the hog farming industry.
• In this note, we will talk about the lockup dynamics and possible placement.

• Yadea (1585 HK) has introduced new capabilities, including sodium batteries and battery swapping, that will yield revenue growth. 
• Investments in the overseas manufacturing facilities will produce higher margins and avoid a price war in China. 
• After a big jump in the sales and earnings in FY 2025 while AIMA Technology Group (603529 CH) result is worse, the share price has not really moved. A buying opportunity. 

• Own-Brand Growth Vulnerability: While Amos Food has successfully pivoted from OEM to proprietary brands, driving revenue to 2.78 billion yuan in 2025, this growth is highly dependent on “viral” hit-product cycles like Peelerz, which are structurally difficult to sustain and carry lower pricing power than established global brands.
• Severe Tariff & Supply Chain Headwinds: U.S. tariff expenses exploded from 6 million yuan to 108 million yuan between 2023 and 2025, eating 18% of net profit. The planned Vietnam factory, scheduled for late 2026, faces major supply chain maturity constraints and escalating geopolitical risks that limit its effectiveness as a tariff hedge.
• Squeezed Margins & Retail Volatility: Securing shelf space in North American retail (Walmart, Target, Costco) requires high slotting fees, trade promotions, and co-op marketing. This, paired with inflating customer acquisition costs (CAC) and copycat pressure from deep-pocketed legacy players like Haribo, threatens Amos’s long-term operating margins post-IPO.

• The widely cited “$5 billion” net income swing is actually an RMB 5.3 billion (approx. US$730 million) negative variance in “other income/loss, net,” representing a mix-up of currency units in initial market reporting. This non-operating swing—driven by a suspected RMB 1.5 billion regulatory fine and retrospective local tax subsidy clawbacks—was the sole driver of the Q1 2026 GAAP net income decline of 15% to RMB 12.5 billion.
• PDD’s core operating trajectory remains highly robust, making GAAP operating profit of RMB 19.6 billion (up 22% year-over-year) the most reliable compass of business health. The optical slowdown in online marketing ad growth to 2.5% (to RMB 49.9 billion) is an accounting distortion caused by “Smart Coupon” nets, masking a true underlying ad growth rate of 12% to 15% on estimated GMV growth of roughly 18%.
• The company’s massive RMB 436.1 billion onshore cash pile is politically and operationally locked, precluding offshore share buybacks. Instead, PDD is deploying this cash to fund its capital-intensive RMB 100 billion “Xinpinmu” self-operated brand initiative—including the recent RMB 3.3 billion acquisition of the DBS Bank Tower in Shanghai—as a direct structural hedge against cross-border tariffs and compliance risks.

• Imminent Lockup Expiry Pressure: On August 6, 2026, the 6-month lockup on Muyuan’s HK$10.7 billion H-share IPO expires, releasing US$685 million in cornerstone investments. While industrial strategics like Charoen Pokphand Foods (CPF) (US$200 million allocation) and Wilmar (US$70 million) are locked in for the long haul to secure supply-chain synergies, financial cornerstones such as Fidelity (US$80 million) and Ping An face severe pressure to exit or trim positions as the stock trades near HK$31.22, a steep discount from the HK$39.00 IPO price.
• Buyback Plan is a Purely Defensive Signaling Device: The approved HKD 300 million to HKD 500 million H-share buyback program is funded not by organic cash flow—given the CNY 5.7 billion to CNY 6.7 billion projected H1 2026 net loss—but rather by state-approved domestic debt. This program is strategically timed as a defensive measure to cushion the market ahead of the August lockup unlock, adding to a balance sheet already burdened by high short-term leverage.
• Severe Cash Burn and Biological Asset Valuation Smoothing: Muyuan is experiencing a direct cash drain, selling 38.62 million market hogs in H1 2026 at an average price of CNY 10.4 per kilogram (dipping to CNY 9.69 per kilogram in June) against a fully-loaded production cost of CNY 11.6 to 11.7 per kilogram. Under CAS 5, the valuation of their RMB 36.59 billion biological assets is subject to highly sensitive internal assumptions (such as feed conversion ratios and piglet mortality rates) that management has historically tweaked to smooth paper losses, deferring the full visual impact of this downcycle on the profit and loss statement.

• Our global intermediate-term outlook remains bullish on MSCI ACWI (in place since our 5/14/25 Compass). We also remain near-term bullish on MSCI ACWI since our 4/23/26 Int’l Compass.
• Support at $152.35-$153.70 on ACWI-US must continue to hold for us to maintain our near-term bullish outlook; and as long as this holds, this consolidation appears healthy
• Technology has continued to move sideways-to-lower, and we still believe the “rotation trade” that we have been recommending since May 29 will continue to work for the foreseeable future.

• Amos Food Group (AMOS HK) is looking to raise US$500m in its upcoming Hong Kong IPO.
• Amos Food (AF) is a leading global sugar confectionery company engaged in the design, manufacturing and sales of innovative candy products.
• In this note, we look at the company’s past performance.

• Copart is a dominant global leader in the online vehicle auction market, specializing in salvage vehicles, with a business model that creates a wide economic moat through significant network effects and high barriers to entry.
• The company exhibits a strong track record of profitable growth, driven by resilient demand from the insurance industry and international expansion. Its capital-light, fee-based model generates substantial free cash flow.
• Future growth is expected to be propelled by three key pillars: continued international expansion, growth in the domestic whole car market, and the enhancement of technology-driven services for its customers.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• An increase in % of variable compensation in executive compensation, linked to medium-to-long-term performance targets, is expected to foster shareholder-oriented management and lead to growth of shareholder value over time.
• Some caution is needed when executive compensation is linked to TSR. The key is to ensure that executive incentive compensation is determined based on combination of medium-to-long-term performance and TSR.
• Although the proportion of performance-based and incentive compensation has been gradually increasing, it seems that many executives are still hesitant to take risks to create value.

• In Q1 FY03/27, revenue decreased 43.0% YoY to JPY10.0bn, with a net loss of JPY720mn.
• Condominium business revenue fell 62.3% YoY, with 49 units handed over and land bank at JPY430.0bn.
• Asset Management revenue rose 0.2% YoY, driven by higher management fees and expanded assets under management.