Consumer

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute. 
• These insights may flag those companies where shares have been pledged. Stocks mentioned include: Perfect Medical Health (1830 HK), Hong Kong Aerospace Technology (1725 HK), and ESR Group (1821 HK).

• Yili is the largest dairy company in China with established entry barriers of brand and products.
• Yili aims to join the world’s top three dairy enterprises by 2025 and strives to seize first place by 2030.
• Management announced the plan of a revenue CAGR of ~10% y/y between 2021 and 2025 and margin improvement of 50bps each year.

• Warner Music Group is one of the top three giants in the music entertainment business across the world.
• Despite the numerous macro challenges, the company achieved double-digit growth for the previous year and outperformed management expectations in several important metrics, such as total revenue, and operating cash flow.
• The company’s music publishing business has shown a remarkable performance and the highlight remains its strong digital revenues which have witnessed a strong momentum given the growth in streaming.

• Itochu Corp (8001 JP) has restarted accumulating Fuji Oil Holdings (2607 JP) shares, with an acquisition of 3.5m shares during the last-quarter to take its ownership percentage in Fuji-Oil to 44%.
• With both earnings and valuations at a cyclical bottom, Itochu could be encouraged to accumulate more Fuji Oil shares in the short term, resulting in Fuji Oil outperforming its peers.
• We think even a takeover offer could be possible while the share price is hovering near the cyclical bottom.

• The December rebalance of the HSI INDEX, HSCEI INDEX and HSTECH INDEX takes place at the close today. One-way flow is estimated at HK$8.4bn.
• There are 3 adds for the HSI INDEX and 4 adds/ 4 deletes for the HSCEI INDEX. There are float changes for a few stocks as well as capping changes. 
• There is excess volume on most adds/deletes post announcement and short interest has also picked up significantly.

• Following a one-month suspension, carbon-fibre wheel maker Carbon Revolution Ltd (CBR AU) announced it will merge (and delist from the ASX) with Twin Ridge Capital, a US-listed SPAC.
• CBR said it also requires upward of A$30mn in bridging finance to fund near-term costs (through to June 2023). The share price promptly tanked 50% upon the resumption of trading. 
• It’s an intriguing situation with an implied notional share price of A$1.49/share under the merger, versus the current price of A$0.15. So I dig a little deeper.

• Although the stock split doesn’t raise the intrinsic value of the stock, the stock price is likely to rise on the speculation that future purchases into the NISA are expected.
• As cross-shareholdings decline, the companies are actively engaging in IR activities with individual investors to secure shareholders who share the company’s position against foreign shareholders who are increasing their presence.
• Some believe that NISA will be used as receptacle for the disposal of BOJ’s ETF holdings, but companies may hope that the silent shareholder hold ETFs as long as possible.

• Gap delivered a strong set of results in the quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
• The company has taken steps to maximize profitability and cash flow while rebalancing and lowering inventory to drive short-term and long-term improvements across its entire business.
• However, the company is proving strength in lifestyle segments, which are growing at an accelerated rate in the current market.

• Despite operating in a turbulent market, including inflationary pressure on the consumer around the world, Foot Locker generated better-than-expected results and managed to surpass Wall Street expectations on all fronts.
• Due to strong brand consistency across the board and successful back-to-school marketing initiatives, Kids Foot Locker had mid-single-digit growth.
• Additionally, Foot Locker extended its partnership with Puma to connect with next-generation consumers through exclusive basketball and other high-end partnerships.

• Macy’s delivered a strong set of results surpassing Wall Street expectations in terms of revenues as well as earnings.
• Besides, they created permanent Toys “R” Us shop-in-shops within every Macy’s site, offering a unique experience not offered nationally anywhere else.
• Macy’s also has a flexible pricing plan to change discounts and markdowns if demand materializes slowly.

• Ross Stores’ results were well above market expectations in terms of revenues as well as earnings as it increased storewide values.
• On the other hand, given their third-quarter sales growth and enhanced holiday assortments, they face their easiest sales and earnings comparisons in the fourth quarter.
• We maintain our ‘Hold’ rating on Ross Stores with a revised target price.

• JD Health (6618 HK) and Yum China Holdings Inc (9987 HK) will replace Longfor Properties (960 HK) and XPeng (9868 HK) in the FTSE China 50 Index on 16 December.
• The largest flow and impact of passive trading will be on Yum China Holdings Inc (9987 HK). There could be buying on Yum China Holdings, Inc (YUMC US) overnight.
• Short interest on the deletes is over 7% of float and there could be short covering against the passive selling at the close on 16 December.

• Rakuten’s successful junk bond sale means the Rakuten Bank IPO will happen next year and not in December as some had feared
• More detail on mobile shows that network costs including D&A are 4x that of service revenue and slightly higher QoQ. Roaming alone is higher than service revenue 
• And that means Rakuten can’t aggressively go after new subscribers unless it wants operating losses to accelerate. Bad for Rakuten but good news for incumbents KDDI, NTT and Softbank. 

• Post market close yesterday, FTSE announced the preliminary changes to the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) for the December rebalance. The final changes will be announced today.
• As expected, AMMB Holdings (AMM MK) and Ql Resources (QLG MK) will replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) in the index.
• From a near 20% index weight in 2020, Malaysian glovemakers will have no representation in the index once these changes are implemented.

• Balrampur Chini Mills (BRCM IN) is one of the major integrated sugar manufacturing companies in India. Besides sugar, the company also engages in the business of ethanol and power generation.
• Balrampur has managed to turnaround its free cash flows and earnings quality. Additionally, it has also stabilized working capital on the back of declining debt. 
• While there are not many red flags, care must be given to inventory reconciliation with bank statement.

• Mahindra & Mahindra (MM IN) ‘s production data provides more questions than answers.
• The drop in production for Thar and XUV 700 in October in spite of the high order backlog is surprising. 
• Considering the industry outlook and the existing sales and production for these two models, we believe this demand forecast may not materialise

• Lava International (9263793Z IN)  is one of the leading end-to-end focused mobile handset and mobile handset Solutions Company based in India, with operations in a number of countries.
• Major business risk arises from external environment, as Lava is one of the prominent leaders in feature phone segment, where the market is dying. 
• Key forensic takeaways pertain to ECL provisioning and some absurd trend in line items. There are several discomforts on the governance end as well which must not be ignored.

• Berli Jucker (BJC TB) is seeing a recovery underway although it has been masked by YoY comparisons and some pressure from higher raw material costs for its packaging business. 
• The company is back into expansion mode in retail with 200 new Mini BIGC stores planned for 2023 plus it will increase its aluminium can capacity in Thailand by 10%.
• Berli Jucker (BJC TB) continues to be an interesting recovery play as an indirect play on tourism and consumption recovery as well as now declining commodity prices. 

• It was announced today that Hong Jung-Guk (eldest son) received a 10.5% stake in BGF Co. (10 million shares) from his father Hong Suk-Jo. 
• Hong Jung-Hyeok’s (second son) stake in BGF also increased from 0.03% to 10.5%.
• We like a pair trade between BGF Co (go long) and BGF Retail (go short). The combination of price momentum and valuation favor BGF vs BGF Retail. 

• We are publishing updated forecasts and commentary for Sky Perfect after meeting the company post-results 
• Media results were predictably weak but the company hopes to make up ground in H2 as it ramps up marketing spend to support sport packages that launch in Spring
• Amazon’s reveal that it has tested LEO-based satellite software highlights cloud platform interest in space ICT infrastructure like that being pursued by Sky Perfect JSAT and NTT

• Weilong Delicious Global (WDG HK), a spicy snack food company in China, aims to raise around US$200m in its Hong Kong IPO.
• According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
• In this note, we provide an update to our earlier peer comparison and valuations.

• The December rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituents at 8%. This will lead to large flows.
• The largest inflows will be on Alibaba Group, Haier Smart Home, Kuaishou Technology, Li Auto, PetroChina, Tencent, JD.com, China Resources Mixc Lifestyle Services and Tingyi Holding.
• The largest outflows will be on SMIC, NetEase, AIA Group, HSBC Holdings, China Construction Bank, Alibaba Health Information Technology, Innovent Biologics, China Mobile, Ping An Insurance and ICBC.

• The next six months will be critical for the future of the global gaming industry as Regulators carry out further investigations into the Microsoft acquisition of Activision
• This is particularly important for SONY, where games account for around one third of consolidated revenue and profits
• This is a battle for the future of subscription services and cloud streaming – Call of Duty yields unprecedented power over the industry. Regulators need to do their Duty. 

• Pinduoduo (PDD US)’s 3Q22 mirrored its strong previous quarter with revenue of RMB 35.5bn (consensus: RMB 30.8bn) and OP of RMB 10.4bn (consensus: RMB 6.7bn).
• CCP’s anti-monopoly drive and common prosperity measures are helping Pinduoduo to outperform the competition.
• Nonetheless, we refrain from being outright positive on any of the Chinese e-commerce names with the economy heading into a slowdown and the lowest sector-multiple at above 12x FY+1 OP.

• China Education Group (839 HK)‘s 27.8% growth in net profit affirmed its solid fundamentals and minimal exposure to regulatory risks. We also welcome its resumption of dividends.
• Management expects profitability will be driven by the 48% new student enrollment growth, potential for tuition increase and global education segment recovery. Consensus forecasts are currently too conservative.
• Weaker 2H FY22 profit is due to higher depreciation and finance costs but will be absorbed with higher enrollment. Capex will be light and we also like its deleveraging move. 

• Commodities trader Theme International Holdings (990 HK) is up 670% since the inset of Covid, and that is after declining 52% from the July 2021 peak.
• A sharp increase in iron ore prices since 2020 resulted in FY21 net income of HK$1bn against HK$146mn in FY19. Net cash is currently HK$4.2bn, 38% of Theme’s market cap. 
• You Zhenhua is Theme’s largest shareholder. Theme recently acquired a 6.6% stake in You Zhenhua-controlled Esteel, which in turn holds a 61% stake in BRC Asia Ltd (BRC SP). 

• J Front has acquired a stake in an e-sports management business and will use this to target younger people, drawing them into its buildings through themed events.
• Event marketing has become a key weapon for department stores and shopping buildings and should help bring in more young people.
• J Front is also using technology to bring in more HNWIs – where the real profits lie.

• Haier Smart Home Co Ltd (6690 HK) revealed that domestic sales are performing well in the “Double-11” festival and overseas sales have outperformed peers in Black Friday.
• The high-end brand Casarte has maintained good market shares in refrigerators, drum washing machines and air-conditioners. Overseas market also saw positive upgrade demand. 
• Its digitalisation strategy has enhanced customers’ shopping experience and increased repurchases. HSH has also achieved improvements in overall efficiency through such efforts.

• At the end of the further extended acceptance period, PMHH owns 93.11% of the shares of Swedish Match (obtained both through shares tendered and market purchases).
• PMHH intends to initiate compulsory redemption under the Swedish Companies Act to acquire all remaining shares in Swedish Match and request delisting from Nasdaq Stockholm. PMI wins again.
• Although the shares are still liquid, gross spread is 2 bps, and therefore there is no trade worth considering, in my view.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads  21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Genex Power Ltd (GNX AU), Golden Energy & Resources (GER SP), Perpetual Ltd (PPT AU), 111 Inc (YI US).
• Lowest spreads  Tyro Payments (TYR AU), Warrego Energy (WGO AU), Nitro Software Ltd (NTO AU), Chip Eng Seng Corp (CHIP SP), Uzabase Inc (3966 JP), PTB Group Ltd (PTB AU). 

• Amid the challenging market, Bosideng International Holdings (3998 HK)‘s 15% growth in 1H FY23 profit is decent. Excluding impairments, operating profit would have grown by 31.3%.
• It expects FY23 gross margin to expand and further store optimisation to enhance operating margin. The introduction of highly successful ultralight down jackets is an added driver.
• With 32% increase in online branded apparel sales, the channel will be Bosideng’s key growth impetus. For “double-11”, sales have outperformed peers significantly, showcasing its product strengths.

• Companies that went public through SPACs in 2020 and 2021 have struggled this year due to inflation and, most recently, a weakening economy.
• SPACs have gotten a bad reputation for making unproven, unprofitable companies public, ultimately leading to a majority underperforming the broader market and a few even going out of business soon after their debut.
• However, SPACs have also taken established companies public, like convenience store chain operator Arko, which has relatively fared better.

• Cisarua Mountain Dairy (CMRY IJ) remains one of Indonesia’s most interesting high-quality consumer staples companies, with strong brands in both premium dairy products and premium packaged foods. 
• The company grew total sales by 76% YoY for 9M2022, with dairy products growing 51% YoY and packaged foods by 125% YoY driven by increasing capacity to serve burgeoning demand. 
• Margins have been impacted by rising raw material prices but powdered milk prices have been falling which should mean margins recover but all the same 9M2022 net profit rose 1.5x.

• There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals were discussed on Smartkarma: the Tangs’ Offer for Chip Eng Seng (CHIP SP); and the Mori Trust Sogo Reit (8961 JP)/Mori Trust Sogo Reit (8961 JP) merger. 
• Key updates took place for: Pendal Group (PDL AU)/Perpetual Ltd (PPT AU), Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB), and Lifestyle International Holdings (1212 HK).

• We calculated the intrinsic value of the stocks is ~30% undervalued at US$6.79 a share.
• The strong Manila market recovery and planned on time opening of Cyprus property does not seem to be baked into the price at writing.
• Macau travel bans will keep MLCO dead pooled, but value lies in its assets still at work

• Nitori is one of few Japanese retailers to brave the US market. The US has beaten Nitori for now and it will instead focus on Japan and Asia. 
• Nitori’s ability to leverage its efficient supply chains to lower prices will likely lead it to further dominance at home and allow it to invest in the rest of Asia.
• The company expects pressures on costs to ease in 2023 as the Yen rises but is working on reducing the cost of goods and operations.

• Suzuki is our top pick in the auto sector in Japan as a key beneficiary of strong demand for autos in India
• Suzuki reported better-than-expected 2Q earnings – but the stock price has not reacted
• Suzuki remains mispriced. Suzuki’s market cap is negative if we strip out the value of Maruti

• China Tourism Duty Free (CDF) is the largest travel retail operator in the world primarily focusing on sales of high-quality duty-free and duty-paid merchandise to domestic and international travelers.
• As per Frost & Sullivan (F&S), it had 86.0% market share by retail sales revenue in China duty-free merchandise sales in 2021.
• With signs emerging of China finally looking to relax its COVID restrictions over the coming months, this will lead to a sales revival at its airports.

• The success of domestic brands in the low-cost cosmetics segment seems to be cascading into mid and high-price segments within the Chinese cosmetics market.
• This could be bad news for Shiseido Company (4911 JP), whose investors are expecting the company to maintain its historical superiority in the Chinese cosmetics market.
• We think that there’s a good chance for FY+2 EV/OP to return to the 12-20x range once the market price-in Shiseido’s weakening competitive position in the mainland China market.

• JD.com should have an outsized benefit from a recovery in Chinese retail sales as further macro stimulus and a gradual easing of China’s covid-zero policy stimulates demand throughout 2023.
• Following a return to margin expansion this year, due to economies of scale and curbing operating expenses during a challenging macro environment, the longer-term margin expansion trend remains on track.
• JD.com Inc. (9618 HK) trades on extremely attractive valuation multiples (PE, PEG, FCF yield) with net cash on its balance sheet equal to 32% of its market cap.

• Weilong Delicious Global (WDG HK), a spicy snack food company in China, aims to raise around US$200m in its Hong Kong IPO.
• According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
• In this note, we will talk about the updates from the recently re-refiled PHIP.

• Alibaba and JD stock prices have rallied around 20-30% in the past month, which was the low-hanging fruit for the investors.
• With the full re-opening in 2023 in China, there is still upside for the sector. 
• Ecommerce players will enjoy GMV growth acceleration and margin improvement next year. 

• Weilong Delicious Global (WDG HK) has refiled (again) its PHIP with an aim to raise US$200 million, materially below its original ambition to raise US$1 billion. 
• We have previously discussed the IPO in Weilong Delicious IPO: In a Pickle, Weilong Delicious IPO: Mixed Update and Weilong Delicious IPO Initiation: Tasty Bite.
• The latest PHIP highlights Weilong’s floundering attempt of putting in price increases to protect margins but without tanking demand. We would pass on the IPO.  

• Weilong Delicious is a leading spicy snack food company in China with a market share of 6.2%. The company plans to raise proceeds of about US$500m through a HKEx IPO.
• This insight focuses on the new data points from the company’s latest PHIP release (dated 23rd Nov) which includes the company’s 1H2022 results.
• Weilong Delicious Global (WDG HK)’s top line growth has slowed down during 1H2022 and margins have come under pressure due to increased S&M spending and lower utilisation.

• Dat Bike, a Vietnam-based electric motorbike startup, has raised US$8 million in a funding round.

• The deal pushes the total funding Dat Bike has raised to date to US$16.5 million.

• Founded in 2019, Dat Bike said that its electric motorcycles have 4x the range (200 kilometers versus 50 kilometers) and faster charging time (3 hours versus 6 hours) compared to most alternatives.

We view Wynn Macau as “High Risk” on the LARA scale. The company has a good operating track record in the Macau gaming market, supported by two high-quality assets (Wynn Macau and Wynn Palace). Conversely, our view also takes into account the company’s geographical concentration and exposure to Chinese regulatory changes. Moreover, we consider the risks associated with the ownership by Wynn Resorts, given Wynn Macau’s history of paying large dividends to the parent company. Over the medium to long term, the Macau gaming industry should benefit from the rising affluence and discretionary income of China’s growing middle class. That said, the industry is facing challenges from the impact of the COVID-19 pandemic on tourism and consumers’ discretionary spending.

Our fundamental Credit Bias on Wynn Macau is “Negative”, on account of its severely weakened leverage and the uncertain recovery trajectory. In addition, we are concerned that the company might resume dividend payments too quickly (before being able to generate and sustain positive FCF), which would be highly credit negative. Still, the company has adequate liquidity for now, with no debt maturities until October 2024. We also anticipate that Wynn Macau will successfully renew its concession agreement in December 2022.

Controversies are “Immaterial”. In February 2018, founder Steve Wynn resigned as Chairman and CEO of Wynn Resorts, after he was accused of sexual misconduct. Mr Wynn sold his 11.8% stake in the company in March 2018. The Board also made major changes and removed directors with past links to Mr Wynn. In our view, Wynn Resorts acted promptly to limit reputational damage. We also deem Wynn Resorts’ corporate governance to have improved, as it is now run by professional managers and no longer has direct ties to its founder. Mr Wynn’s ex-wife, Elaine Wynn, is currently the largest shareholder of Wynn Resorts (8.4% stake).

Some ESG-compliant funds may be prohibited from investing in Wynn Macau, due to the nature of its core business (casinos). That said, Macau’s gaming industry is established, transparent and highly regulated. We believe the curtailment of junket activities would help to further raise operators’ transparency. Moreover, the authorities are seeking to reduce the city’s reliance on gaming and promote leisure tourism in the medium term. These factors should mitigate ESG-related risks. Overall, the ESG Impact on Credit is “Neutral”.

• This post will specifically examine arb trade opportunities during the subscription rights trading period, with the recent HLB and Lotte Chemical cases.
• HLB gave an arb yield of 8%. As for Lotte Chemical, the size (₩1.1T) is much bigger, and it carries single-stock futures, a powerful incentive for arb traders.
• Another thing for Lotte Chemical is that it is unclear whether the major shareholders will participate in the subscription, which can lead to a widening of our arb spread.

• With just over two months left in the review period, we expect three changes to the Nikkei 225 (NKY INDEX) at the March rebalance.
• Lasertec Corp (6920 JP), Oriental Land (4661 JP) and Renesas Electronics (6723 JP) could replace Toyobo Co Ltd (3101 JP), Nippon Light Metal (5703 JP) and Toho Zinc (5707 JP).
• As with the last rebalance, there will be a large funding trade estimated at JPY 417bn. There are many stocks with over 0.5x ADV to sell.

• DPC Dash aims to raise around US$100m in its Hong Kong IPO. 
• The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
• In this note, we will talk about the not-so-positive aspects of the deal.

• Although spending on non-necessities withered from March 2020 onwards, some low-cost retailers of discretionary items continued to grow. 
• Workman’s mix of high cost performance and engagement with the ever more active outdoor market has, and will, support expansion, even if same-store sales growth has slowed.
• Future category expansion will deliver higher same-store sales as well as top line growth. 1,500 stores (from 1,000) is certain but 2,000 is possible thanks to new categories like footwear.

• Sector headwinds including supply chain shortage and business interruptions from Covid lockdown is easing.
• More new models in pipeline to drive sales volumes and earnings in 2023E
• Valuation re-rating would be triggered with earning recovery, consensus estimate upgrades, Zeekr ramping up and potentially Zeekr spin off.

• Despite $IWM already hitting our price target at 200-day MA/YTD downtrend, and the $SPX getting to within 1% of our target at 200-day MA, we see this 1.5-month rally continuing.
• We expect further upside as long as the 1.5-month uptrend channels remain intact on the SPX and IWM, and we believe that breakouts above their 200-day MAs could be coming
• Breakouts above their 200-day MAs that would likely signal the end to this bear market.

• Lower losses for investment business and sportswear retailing have contributed to a 48.4% reduction in losses for 1H FY23 at China Dongxiang Group Co (3818 HK).
• The resumption of interim special dividend is a welcoming sign. Inventory clearance, store optimisation, cost reduction and growth at the PHENIX ski wear brands are positive drivers.
• Its market capitalisation of HK$1.88bn represents a steep discount of 79% to its cash and investment portfolio of Rmb8.46bn, and this also means sportswear business is free.

• IPAR continues to experience a strong consumer spending environment for fragrances where it has become increasing difficult to have all the components to manufacture a bottle
• IPAR reported third quarter sales of $280.5 million compared to our original estimate of $275.3 million. The increase in sales was the result of a strong showing from new licenses
• At the start of 2022, our 2022 EPS forecast was $3.05. It is now $3.40. IPAR’s stock has shown little movement for such an achievement

• This is our first report on Brazilian beverage giant, Ambev SA.
• In spite of the headwinds in a few of its international operations, Ambev delivered strong results in the previous quarter in terms of both organic growth and net revenue.
• Non-alcoholic beverages also delivered a stellar quarter with volume growth.

• I had to write a brief note about the panic whipped up by UBS’ downgrade of Petrobras, cutting its price target from R$47 to R$22 on fears of a policy shift under the incoming Lula administration.
• This combined with quarterly ex-dividend day, to send the shares sharply lower and extend their slide since the election.
• This Reuters article sums up recent events nicely- namely Lula is over-hauling PBR management and seeking a strategic shift from monster dividend pay-outs, towards increased investment in renewables and possible domestic price caps.

• DPC Dash aims to raise around US$100m in its Hong Kong IPO. 
• The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
• In this note, we will talk about the positive aspects of the deal.

• China funeral industry has large growth potential.The total market scale would be about RMB400 billion if based on annual death toll of 10 million and per capita expenditure of RMB40,000.
• Information asymmetry weakens the bargaining power of buyers. Administrative barriers raise the threshold of market access and weaken competition. So, related companies usually have high profitability and return on capital.
• Changes in population structure would have a negative impact on most consumer goods, but demand of funeral industry would continue to rise. Investors would have both alpha and beta superposition.

• The Keepers Holdings, Inc. (KEEPR PM) trades at 7.1x/5.6x FY22e/FY23e on revised numbers (including earnings from the W&H acquisition) and has 10% of its market cap in net cash. 
• The outlook from the conference call was bullish, and the Q4 2022 revenue growth trend is expected to be similar to the 9M2022 (34% YoY) and future structural teens growth.
• At a 300 mn USD market cap, you get a virtual monopoly (>70% marketshare by volume) of the imported spirits business with sole distributorship of the most recognizable brands. 

• This is our first report on Save Foods and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• Despite catering to a sizable addressable market, Save Foods is currently trading at valuation ratios far lower than its competitors.
• Baptista Research looks to evaluate the different factors that could influence Save Foods’ price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology to determine a suitable price for the company’s stock.

• Just under two weeks ago, AXXZIA Inc (4936 JP) announced it had on that day (9 November) applied to move to TSE Prime from TSE Growth. 
• It’s an interesting one because of the strange differential between “tradable shares” and “float.”
• After some study, I think this could be a TOPIX inclusion at end-Feb 2023, but there are steps to take between now and then. 

• Hong Kong is – very gradually – rolling back Covid restrictions
• That’s a welcome relief for tourists, and for hospitality companies dependent on tourism. 
• Mandarin Oriental International (MAND SP) is trading cheap at 0.7x P/B against 1.8x on average (five years) pre-Covid.

• Independent shareholders of Lifestyle International Holdings (1212 HK) comfortably voted through the Scheme resolution.
• 94.93% of stakeholders present (and via proxy) voted FOR, with 5.07% voting AGAINST. 
• The last day of trading is the 6 December with payment expected on or before the 30 December. 

• Ql Resources (QLG MK) and AMMB Holdings (AMM MK) could replace Hartalega Holdings (HART MK) and Top Glove Corp (TOPG MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX).
• If the changes go through, glove makers will have no representation in the index. At one point in 2020, glove makers made up nearly 20% of the FBMKLCI INDEX.
• One-Way turnover at the rebalance will be around 3% and the impact of passive trading will be higher on the inclusions as compared to the deletions.

• At the end of the review period for the December rebalance, we see JD Health (6618 HK) replacing XPeng (9868 HK) in the FTSE China 50 Index.
• There is a very slim possibility of Longfor Properties (960) being deleted; it could be replaced with either Yum China Holdings Inc (9987) or PICC Property & Casualty H (2328).
• Short interest has stayed rangebound on JD Health (6618 HK) this year, while shorts have gone parabolic on XPeng (9868 HK) over the last few months.

• Lifestyle International Holdings (1212 HK)’s scheme resolution was approved at today’s court meeting – 94.93% of independent share votes cast FOR (2.31% of all independent shareholders AGAINST).
• This is in line with our expectations – in Lifestyle International (1212 HK)’s Wide Spread Heading into the 21 November Vote that despite the wide spread, the offer would succeed.
• At the last close and for the 30 December payment date, the gross and annualised spread to the offer is 2.0% and 20.6%, respectively.

• The revenue growth rate bounced back to 11% YoY in 3Q22.
• The operating margin improved to a historical high at 3.1%.
• We believe the stock price has an upside of 27% for year end 2023.

• The suprise return of Bob Iger as Disney CEO can fix certain Bob Chapek specific issues: relationships with investors, politicians, and creative types.
• But Iger faces similar intractable issues: accelerating cord cutting, a transition to a less profitable form of media distribution, and a potential recession.
• We think Iger will refocus investors on revenues/profits at Disney+ rather than subscribers, will more efficiently spend on content through decentralizing decision making… and potentially sell Disney to Apple.

• This is our first report on global automobile behemoth, Honda Motors.
• The Shanghai lockdown and semiconductor supply shortage resulted in a drop in unit sales and automobile production of Honda in the quarter, mainly in North America and China.
• However, despite soaring raw material costs and a drop in automobile unit sales, the sales of motorcycle units were up which led to the revenue beat.

• On 21 November, The Walt Disney Co announced that it has replaced the incumbent CEO Bob Chapek with Bob Iger who has successfully headed Disney previously for nearly 15 years.
• We believe this is a wonderful change and will have a huge impact in turning around Disney’s share price which is down nearly 50% from its peak in March 2021.
• The previous CEO Bob Chapek did not focus enough on delivery great contents. Rather, the company got involved too much in politics turning off millions of customers.