Consumer

• CTG Duty-Free Group has priced its IPO at HK$158 per share, at a slight premium to the midpoint of the indicative IPO price range of HK$143.5-165.5 per share.
• At HK$158 per share, the company raised net proceeds of HK$15,892.3 (approx. US$2.0bn) and the IPO is priced at an almost 30% discount to CTG’s A-share last close price.
• Cornerstone investors subscribed for approx. 38.4% of the H-share offering (or 1.9% of the total issued share capital of the company post-offering) with some existing shareholders subscribing under placing guidelines.

• The revenue growth rate fell to 5% in 2Q22 due to the lockdown in Shanghai and Yangtze delta.
• However, freezers became popular in June and July because of the experience during the lockdown.
• We believe the stock has an upside of 21% based on EBITDA, but the upside can be significant if based on sales-related ratios.

• China Tourism Group Duty Free Corp Ltd (1880 HK)/CTGDF priced its H Share at HK$158.00 per share to raise net proceeds of US$2.0 billion. The H Share starts trading tomorrow.
• The H Share listing price implies an AH discount of 27.2% at A Share price of RMB189.80. This compares to an average AH discount of 46.6% of listed AH shares.
• The China Tourism Group Duty Free Corp Ltd (601888 CH) A Shares are trading close to fair value. The H Shares valuation is unattractive compared to peers. 

• 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 also flag those companies where shares have been pledged, both recently and ongoing.

• JD Health reported 1H2022 results. Revenue increased 48.3% YoY to RMB20.2bn (vs consensus RMB19.4bn) while managed to report a small OP of RMB60m (0.3% of revenue) for the period.
• Excluding share-based payment expenses, JD Health reported an OP of RMB1.0bn vs RMB564m in the same period a year ago, resulting in an OPM of 5.1% vs 4.1% in 1H2021.
• The growth in annual active user account growth has declined during 1H2022, however, it was mainly due to decrease in marketing spend.

• Leapmotor (2007699D HK), a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.
• In Leapmotor IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
• The key elements of the bear case rest on a slow ramp-up, lower revenue, high EBIT and FCF loss margin compared to peers at a similar stage of development.

• Sido Muncul recently released its 1H2022, which reflected some impact from inflationary pressure impacting the purchasing power of its customer base, especially for herbal products.
• The company’s food and beverage division and notably energy drinks saw some impact from a slowdown due to consumers taking a longer Lebaran break this year but saw strong exports.
• Sido Muncul (SIDO IJ) saw a sharp correction post its numbers but we would expect some recovery in 1H2022 and a resumption of growth in FY2023 plus valuations are attractive.

• Based on the correlation between revenue and China’s online retail sales, we estimate Pinduoduo (PDD US)’s Q2 revenue to beat consensus by around RMB 2.4bn.
• Our cost estimates translate the above revenue to an OP of RMB 4.0bn in 2Q22 compared to RMB 3.6bn for consensus.
• Even though consensus seems to have over-corrected its 2Q22 assumptions, it is still hung up on old assumptions for the medium term.

• Our earnings projections for China Tourism Group Duty Free Corp Ltd (1880 HK) are 14% and 18% below market consensus respectively. We think these are more realistic expectations.
• At IPO price of HK$158, CDFC H-share sits on 23.9x FY23F PER. We think it is difficult to trade above 22x – the average for top consumer discretionary names.
• Weakened visitor appetite to Sanya, potentially higher discounts, increase in border opening, higher fixed cost and uncertainties for duty free policies beyond 2025 are negative earnings factors.

• Foot Locker has been working hard to reduce its dependence on Nike and offer a broader set offerings over its channels categories and brands that have been yielding positive results.
• The partnership of Foot Locker with Puma continues to drive heat in the basketball categories as MB.01 remains the best-selling shoe in the company.
• It now has the brand worldwide in 95 doors, and it continues to grow its presence of the brand with robust results.

• We expect Emperador (EMI SP) to be added to the FTSE Straits Times Index at the September rebalance after meeting the free float, market cap and liquidity requirements. 
• As the lowest ranked current index constituent, we expect Comfortdelgro Corp (CD SP) will be deleted heaping pressure on the beleaguered stock with over 4 days of ADV to sell.
• Emperador (EMP PM) is an inclusion to the FTSE All-World Index and there is a lot to buy on that line from passive trackers at the close on 16 September.

• Last week Yum China Holdings Inc (9987 HK)  announced it has applied for voluntary conversion to a primary listing on the Hong Kong Stock Exchange.
• Should all necessary approvals from the HKEx be satisfied, Yum will become dual primary listed on the New York Stock Exchange and the HKEx.
• This regulatory process, facilitated by rules introduced by the HKEx over the past year, enables the de-listing of the ADRs and the smooth transition to a sole HK listing.

• Bright Scholar Education (BEDU US) (BSE), an operator of schools across China, the UK, and the US, received an Offer earlier this year from Huiyan Yang, the chairperson.
• Yang is offering US$3.32/ADS – adjusted for the recent reverse split – a 44% premium to the undisturbed price. 
• Yang controls 92.5% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.

• With Q1 park attendance falling short of expectations, it seems unlikely that Oriental Land (4661 JP) will beat FY23 guidance as expected by consensus.
• The consensus medium outlook is also questionable as the management seems less keen on opening Fantasy Springs as soon as possible.
• At over 29.2x EV/consensus FY27 OP (56.5x at LSR-FY27-OP), on exaggerated medium-term growth targets, Oriental Land probably has more downside than some of the expensive tech names on the market.

• Campus Activewear (CAMPUS IN) has received the court’s approval for amalgamation of Campus AI Pvt Ltd into the standalone entity.
• Amidst the plethora of positive rationale for the amalgamation, the one that stands out from the rest is the cleaning up of the books of campus activewear. 
• With the amalgamation scheme, the company also gets rid of the negative capital reserve balance. Is this the only adjustment, or are there more things to clean?

• Leapmotor (2007699D HK), a Chinese EV manufacturer, will start its listing hearing for a US$1.5 billion HKEx IPO this week, according to press reports.
• Leapmotor ranked fifth among the global pure-play EV companies and fourth among the pure-play EV companies based in China as measured by sales volume in 2021. 
• The key elements of the bull case rest on a solid roadmap, executive capabilities, explosive growth, declining loss margin and declining FCF burn.

• China Tourism Group Duty Free Corporation Limited (CDF) raised around US$2.4bn in its H-share listing in Hong Kong, after pricing its IPO at HKD158/share.
• 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 talk about the deal pricing and the trading dynamics.

• Despite the difficult climate, Tapestry’s financial performance in the recent quarter was decent.
• It failed to meet revenue expectations of the Wall Street but managed to produce an earnings beat.
• AUR growth for handbags worldwide increased by about 20% due to this outstanding performance, intentional reductions in promotional activities, and tactical price increases.

• Hyatt witnessed a strong recovery in group and business transient demand and saw strong levels of leisure demand.
• The management is on track to turn the high leisure demand into high rate realization, capitalize on fee increases, and enable margin expansion.
• The Hyatt management is adopting an increasingly data-driven approach and recently expanded their relationship with Knowland to deliver value across its portfolio.

• China-based Lazbao Group, an integrated service provider, has closed its series B round, raising “tens of millions of dollars.”
• Lazbao provides ecommerce services to Southeast Asia, offering supply chain management, ecommerce operations, warehousing, logistics, marketing, cross-border payments, and a digital enterprise resource planning system.
• It has operations in Indonesia, Thailand, the Philippines, Vietnam, and Malaysia.

• Fast Retailing (9983 JP)  has rallied 60% during the last three-months on better-than-expected Q3 performance and a relatively strong bounce in Topix exceeding the upper-end of the trend-channel by 3%.
• Although 20% below the all-time high, reached during the COVID pandemic, the Fast Retailing to Topix  ratio is currently near the pre-COVID peak and starting to show some resistance.
• We would look to short Fast Retailing  with expectations of weakness in overseas markets such as North America and Europe in addition to the already struggling Chinese market.

• The Pinkfong Company was valued at about 1 trillion won, according to local reports in early 2022. Samsung Publishing (068290 KS) owns a 16.8% stake in The Pink Fong company.
• For now, The Pinkfong Company does not have any near term plans for an IPO. However, it may try to complete its IPO sometime in 2023/2024.
• The Pinkfong Company’s sales increased by nearly 500% in the US to reach 24.9 billion in 2021, accounting for 30% of the company’s total sales in 2021.

• Ford performed well during the second quarter despite a difficult environment that included supply chain disruptions, numerous new economic challenges, and general uncertainty.
• It managed to surpass Wall Street expectations in terms of both, revenues as well as earnings.
• The Ford+ strategy, which is Ford’s best chance to add value since they scaled the Model T, is why they achieved these achievements.

Melco Resorts’ Q2/22 results were in line with our expectations. Positively, the company’s overseas assets (in the Philippines and Cyprus) reported strong revenue growth and positive EBITDA, which partly offset the very weak performance in Macau. In addition, the company’s liquidity is strongest among peers, with sufficient cash and availability under its credit facility to last 22 months in a zero-revenue scenario. We expect the company’s expansionary capex to be curtailed in 2023 (after the remaining USD 250 mn of capex for Studio City Phase 2). That said, we view negatively MLCO’s small share repurchases.

• Darden Restaurants delivered a decent quarterly result exceeding sales expectations and having fairly good earnings despite the highly inflationary environment.
• The 2022 fiscal has been good for the company despite the impact of the Omicron variant as its brands continue to strengthen their business models.
• While LongHorn and other business segments saw lower segment profit margins in the last quarter due to higher inflation levels and other investments made in those businesses since pre-COVID, Olive Garden and Fine Dining segments saw segment profit margin growth this quarter.

• Given the impact of inflationary headwinds, Domino’s has been working out ways to improve its consumer pricing architecture in the U.S.
• The management saw the average price rise close to 6% in the last quarter which helped the company surpass revenue expectations of Wall Street.
• In the new season of Stranger Things, they also introduced their Mind Ordering app, which offered a new ordering experience.

• WM Motor Technology Co Ltd (WMT CH) (WMM) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• WM Motor is a smart EV player in China. As of the latest practicable date, it had a total of four main EV models. 
• In this note, we talk about the positive aspects of the deal.

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.

• Golden Eagle Retail
• KWG Living Group

• FTSE announced the results of the September SAIR for the FTSE All-World/All-Cap indices on Friday. There are 243 changes (adds, deletes, migrations across AW/AC) across Asia-Pac.
• The largest inflows will go to PSMC (6770 TT), Sumber Alfaria Trijaya (AMRT IJ),  Daqo New Energy (DQ US) and Tianqi Lithium (002466 CH).
• FTSE will switch index membership from the US ADRs to the HK listings for New Oriental Education & Technology Group (9901 HK) and XPeng (9868 HK). 

• The Hang Seng Index Team announced the index review for the Hang Seng Tech Index Friday after the close. There were no additions or deletions.
• However, there is a 4.9% one-way turnover on reasonably heavy FAF and capping changes. Sensetime sees a huge FAF increase. Tencent, Meituan, and Kuaishou get re-capped higher. Xiaomi lower.
• There is a fair bit of flow, but the obvious big name – SenseTime Group (20 HK) – has potential overhang. Watch Haier Smart Home Co Ltd (6690 HK). 

• Pandemic darling Peloton saw a meteoric rise and fall over the past two years.
• The company initially benefited from soaring demand, but overestimated demand and eventually leading to a fire sale and massive layoffs.
• German sports e-commerce retailer Signa Sports United, which went public through a SPAC deal last year, could face a similar fate in the coming months.

• Logistics companies’ revenue grew by over 10%, which reflects the recovery of e-commerce.
• The market size of Chinese online game continued to shrink in July.
• Alibaba’s Ele.me sets up a mini-program on TikTok to fight Meituan.

• GameStop (GME US)  shares have materially outperformed the Nasdaq and S&P 500. GameStop shares fell ~2% YTD vs. Nasdaq (~-19%) and S&P 500 (~-11%). 
• RC Ventures, controlled by GameStop Chairman Mr. Ryan Cohen, holds a ~12% stake in the struggling video game retailer. The company announced a 4-for-1 stock split in July.  
• GameStop reported a record net loss of $158M and burned through ~$311M in cash in 1QFY22. We continue to believe the stock is massively overvalued and see downside potential. 

• Disney delivered another all-around beat and its strong results were driven by a stellar performance at its domestic theme parks, increases in live sports viewership across its linear channels and ESPN+, and significant subscriber growth at its streaming services.
• The company had 221 million subscribers overall as of the end of the third quarter for its streaming service finally surpassing rival Netflix.
• Their results demonstrate the Walt Disney Company’s potential to power its ecosystem and explore development prospects across industries and distribution channels thanks to its distinctively diversified businesses.

• The inclusion of China Shenhua Energy Co H (1088 HK), Chow Tai Fook Jewellery (1929 HK), Hansoh Pharmaceutical (3692 HK) and Baidu (9888 HK) takes us to 73 index constituents.
• Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover of 5.09% and will result in a one-way trade of HK$10,562m.
• There are large shorts on Chow Tai Fook Jewellery (1929 HK) and Hansoh Pharmaceutical (3692 HK) and there could be some short covering from now to implementation.

• The theme we have seen over the past four weeks is an increasing number of indexes reversing 4-10-month downtrends and/or breaking above important resistance levels, with no failed breakouts.
• We continue to believe that global equities are going through a bottoming process, but the real test will come during the eventual pullback, which we believe we are now experiencing.
• We are watching to see whether these breakout levels and important moving averages (e.g., 50-day MAs) will hold.

• This week, Thirdpoint’s Dan Loeb wrote a letter to Disney asking it to cut costs, spin ESPN, and buy in Hulu.
• We agreed with Loeb two years ago, but don’t see the strategic rationale this time around…Disney isn’t bloated, needs ESPN’s FCF, and doesn’t need to spend $9B on Hulu today.
• We do agree with Loeb’s points about not reinstating the dividend (better use of FCF on Disney + and other investments) and refreshing a (strangely weird) Board of Directors.

• SOCAR (403550 KS) raised around US$78m in its South Korea IPO, after the deal was priced at 28,000 KRW/share, below the bottom end of its initial IPO price range. 
• Subscription rates for SoCar have been tepid, and previous deals with similar subscription rates as that of SoCar have had poor debuts, closing -8.2% on average. 
• The lack of instis opting for lockup will likely result in a selldown given its weak fundamentals and lofty valuations. 

• Kraft Heinz delivered outstanding second-quarter results.
• The company is aware of the Despite the effects of the current inflationary environment on Kraft Heinz’s business, the company delivered a solid result, surpassing Wall Street expectations in terms of both, revenues and earnings.
• Overall, we are neutral on Kraft Heinz we give them a ‘Hold’ rating with a revised target price.

• The food-delivery company Deliveroo (ROO LN)  initiated the stock buyback program and will purchase up to £75M worth of shares to reassure investors. 
• Deliveroo (ROO LN)  is down ~77% from the IPO price as Covid lockdown restrictions have ended and revenue growth slowed significantly. 
• Deliveroo (ROO LN)  currently trades at 0.1x EV/2022E GMV, a discount relative to its key peers that trade at an average of 0.3x EV/2022E GMV.  

• Tyson Foods delivered mixed third-quarter result surpassing revenue expectations as a result of the price increases but failed to meet Wall Street expectations with respect to earnings given the inflationary pressures.
• In order to counteract the rise in the cost of goods, the company implemented pricing efforts, which resulted in an increase in sales for the entire year.
• Among major updates, Tyson entered into a joint venture agreement with the Saudi Arabian Tanmiah Food Company.

• Giordano International (709 HK) has announced 1H22 net profit of HK$97mn compared to  HK$60mn in 1H21.
• Of interest is the declaration of an interim dividend of HK$0.085/share.
• The ex-dividend date is the 20 September. Whether you get the dividend plus the Offer Price depends when the Offer closes (or is extended), and/or whether the Offer turns Unconditional.

• Taste Gourmet Group (8371 HK) reported substantial Q1 2023 numbers, with profits coming in at 16 mn HKD up 42 YoY(%) (-65 YoY(%) netting out the subsidies).
• Despite losing 21 days in April, this is a solid result as cash levels burgeoned to 95 mn HKD from 65 mn HKD (Mar FY22). 
• The stock is cheap, trading at 5.1x FY23 PE and a 11.7% dividend yield ( at a 60% payout ratio), making this extremely attractive to own.

• Giordano International (709 HK)’s 1H22 net profit of HK$97 million was within the HK$91-101 million positive profit range. The IFA noted that interims do not change its advice.
• The Board surprisingly declared an interim dividend of HK$0.085 per share. As the ex-div falls after the final closing date, shareholders who accept the offer will not receive the dividend. 
• The incrementally positive outlook and dividend highlight Giordano’s value. The results have pushed our deal break/intrinsic value to align with the VGO price. 

• Like other premium fashion brands and retailers, United Arrows (7606 JP) has faced unprecedented challenges since lockdown began in March 2020. 
• Sales are still 25% below 2019 levels but the select shop retailer is optimistic about the future, despite the fact that profitability has been in decline since long before Covid.
• Weaknesses remain however, including an ageing customer base and to some extent, an ageing brand.

• Deliveroo’s recent share buyback and exit from Netherlands are not enough to offset people in the UK and Ireland trying to go back to their previous way of lives.
• On 10 August, Deliveroo (ROO LN) announced a share buyback program worth £75 million ($90.6 million) share buyback program, which represents 4.6% of its current market cap. 
• Cost of living increases and millions of European consumers eating out at restaurants rather than ordering food are causing further negative impact on Deliveroo’s business. 

• Liquidity shorts can be great short candidates.  The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements. 
• Liquidity shorts have built-in catalysts, have moderate to higher betas,  and can have strong down moves if a crisis develops.  They can go bankrupt, pushing the stock price near zero.
• Today we are flagging Bed Bath, Blink Charging, Natera, Asana.

• Beauty Farm Medical and Health Industry (BFM HK) is looking to raise up to US$300m in its upcoming Hong Kong IPO. 
• Beauty Farm Medical and Health Industry (BFMHI) is China’s largest provider of daily facial and body care services in terms of revenue in 2021, according to Frost & Sullivan. 
• While BFMHI has stable profitability margins and is even in a net cash position, we do not see anything to shout out loud about given its mediocre growth. 

• Bain Capital Private Equity launched a deal for Net Marketing (6175 JP) at a 63% premium. 
• That should be enough to get it done on its own, despite coming below the IPO price of 5yrs ago. 
• In any case, Shareholder Structure makes this a completely done deal.

• Many consumers bought household freezers after the lift of lockdown.
• Strict rules on physical stores drive consumers to online e-commerce platform.
• Total express parcels increased by 8% YoY in China in July.

• After takeover interest started in March, quirky & ailing Ted Baker has agreed on a 110p/share cash offer from Reebok-owner ABG, (a low) 18% premium, £211 mn implied equity value, £332 mn implied EV.
• Consideration represents 5.6x EV/Fwd EBITDA, vs. 6.4x median of comparables. Although in the midst of a turnaround plan (with execution risk) and unhelpful macro environment, Ted Baker keeps brand equity.
• Irrevocables represent 50.7%. Gross spread is 1.27%, with estimated annual return of 3.99% (assuming scheme is approved and settlement by mid-December). Long.

• Despite unfavorable business environment such as global inflation, Orion was able to generate excellent progress in sales and profit growth in countries including China, Vietnam, and Russia in 2Q 2022.
• Orion had sales of 263.2 billion won (up 19.6% YoY) and operating profit of 35.7 billion won (up 170.3% YoY) in China. 
• Due to a combination of attractive valuations and improving fundamentals along with restrictions of snacks imports from Taiwan to China, we continue to believe Orion’s shares could outperform the market.

• The emergence of new technological innovations has changed many aspects of the day-to-day life of consumers.
• While these kinds of toothbrushes have been in the market for many years, with Oral-B (Procter & Gamble) and Philips, dominating the market, consumer adoption has been limited given the premium pricing of these electric toothbrushes.
• It is a recently listed oral care company that is making highly advanced and sophisticated electric toothbrushes with sonic technology and making them available to the average American consumer at very reasonable prices.

• Yashili International Holdings (1230 HK) independent shareholders unanimously approved the proposed transactions at the 16 August EGM, a crucial step for China Mengniu Dairy Co (2319 HK)’s HK$1.20 offer.
• The remaining pre-condition is the completion of the 25% Yashili acquisition. The completion conditions suggest that this pre-condition is low risk and will likely be completed soon.
• The value test is only applicable to the scheme. At last close and for a November completion, the gross and annualised spread to the offer is 8.1% and 29.6%, respectively.

• CTG Duty Free Group has filed for a HKEx listing and plans to raise net proceeds of US$1.98bn at the midpoint of the IPO price range of HK$143.5-165.5 per share.
• The company’s indicative IPO price range is at a 27-37% discount to the company’s last close of RMB194.75 per share.
• In this insight, we discuss our key concerns on CTG’s financials and our thoughts on the company’s valuation.

• Hyundai Mobis said it was considering a split but had not yet made a decision. This kind of response is generally seen as an ACKNOWLEDGMENT.
• The eventual goal should be to liquidate the Chung family’s Mobis stake via spin-off/merger and swap it with Kia Motors’ Mobis stake. It implies that this will be a spin-off.
• This aspect serves as an opportunity to use today’s Mobis price drop as a swing trading entry point. I would consider building a Long/Short setup with HMC at this point.

• Tasmanian salmon producer Tassal (TGR AU) and Canadian aquaculture play Cooke have entered into a Scheme at A$5.23/share. 
• The revised Offer is Cooke’s fourth bid since late May, having initially pitched A$4.67/share. Cooke has been gradually building its stake and now holds 10.5%, up from 5.4% initially.  
• This Offer is done and dusted. Tassal’s board unanimously recommends shareholders vote in favour of the Scheme.

• Tassal (TGR AU) entered a scheme implementation deed with Cooke at A$5.23 per share, a 48.6% premium to the undisturbed price of A$3.52.
• The offer price is an all-time share price high. The scheme is not subject to due diligence or a financing condition. Cooke also noted that it had received FIRB approval.
• This is a done deal. At last close and for year-end payment, the gross and annualised spread to the offer is 1.8% and 4.6%, respectively.

• We continue to believe that the bear market lows have already been established.
• It remains to be seen whether the indexes will experience a meaningful pullback first, or whether we are already experiencing the initial leg of a new bull market.
• Thus far, market indexes have ignored overbought conditions, which is historically a sign of strength during the initial leg of new bull markets.

• Kroger Co. continued to navigate the challenging operating environment characterized by continued supply chain headwinds, including higher diesel fuel costs and inflationary cost pressures.
• The highlight of the last quarter was its launch of the Boost membership on grocery and fuel delivery.
• We provide the stock of Kroger Company with a ‘Hold’ rating with a revision in the target price.

• Altria is facing a difficult macroeconomic climate since the start of 2022 which was responsible for a weaker tobacco performance.
• The company failed to meet Wall Street expectations in terms revenues despite the robust performance of Marlboro.
• The smokeable products division did generate excellent operating company income growth, while their moist smokeless tobacco brands kept boosting profitability resulting in the company delivering an earnings beat.

• Maintain BUY recommendation for CENTEL with a target price of Bt49.0.The company’s 2Q22 net profit came out above our expectation at Bt22m in 2Q22, compared with Bt44m loss in 1Q22.
• Impressive performance for hospitality business.Hotel revenue hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels jumped sixfold and fourfold 
• Food hit 10 quarter high at Bt2.9bn (+26%YoY+11%QoQ) on the back of strong SSSG at 19% compared with 0% and 10% in 2Q21 and 1Q22 respectively.

• Faraday Future (FF) saw a Q2 net loss of $142m & cash fell by 56% QoQ to $121m. As of Aug-9th, cash sunk another 59% to $52m.
• FF’s recently lined up financing provides $52m, but comes in stages through late October, which could hinder its Q4 new flagship EV launch.
• Risk statements regarding the launch of its new EV raise concerns about supplier relationships and marketing capabilities even if its first EV is launched in Q4. 

• This offering is a 100% stockholder allocation with forfeited shares going to the public. There will be 9.56M new shares at a capital increase of nearly 9%.
• We should note that the largest shareholder may again do the same trick. He may block-deal a 1% stake and use the proceeds to participate in this offering.
• A massive release volume and a 25% discount rate may cause a severe pricing distortion, leading to arb trading openings.

• Giordano International (709 HK)’s voluntary conditional from the Cheng Yu Tung family (24.57% of outstanding shares) at HK$1.88 per share is open with a first closing date of 5 September.
• Crucially, the offeror will not increase the offer price. In combination with an ongoing retail recovery, the low-ball offer has little chance of meeting the 50%+ minimum acceptance threshold.
• While the IFA says the offer is fair and reasonable, key directors will not accept the offer. A deal break implies, at most, another 10% downside to the last close.

• A recent conversation with Sumber Alfaria Trijaya (AMRT IJ) which operates Alfamart and AlfaMidi mini-markets in Indonesia further cemented a positive view on the outlook for the company.
• The company should easily surpass its target for 1,000 new stores this year, with increasing basket sizes and fee-based income and some new features such as BeanStop potentially improving returns. 
• Sumber Alfaria Trijaya remains a core retail holding with an increasing investor following after MSCI inclusion. Valuations remain attractive versus history and ROE at 25% is higher than pre-COVID levels.

Wynn Macau’s H1/22 earnings continued to underperform those of peers, with the trend persisting since Q4/21. This could be owing to stiffer competition from newer properties (e.g. MGM Cotai and SJM Holdings’ Grand Lisboa Palace), particularly in the premium mass segment.

We highlight that Wynn Macau has sufficient liquidity to sustain 15 months of operating cash burn in a zero-revenue scenario. This does not factor in the company’s USD 500 mn loan from its parent, which we assume would be used to meet the government’s requirement for all operators to raise share capital by MOP 5 bn.

Wynn Macau’s next debt maturity will be in October 2024, when the USD 600 mn WYNMAC 4.875 24 will come due. Given that the WYNMAC bonds are yielding 9-12%, we believe it could be very difficult for the company to issue new bonds for refinancing. Hence, Wynn Macau might face serious refinancing risk if the industry fails to recover meaningfully beyond 2023.

• Faraday Future (FF) released an 8-K today saying they raised $52m and could see as much as $600m after 90 days.
• The 90-day lead time is obviously based on whether FF can survive. The company originally said it needed $200m to make it through the Q4 launch of its first EV.
• FF said it only had $52m in cash as of August 9th versus $233m on April 30th. With new funding, FF has 7.4 weeks of money at current cash-burn rates.

• Excluding onetime items, SAPPE’s 2Q22 core profit came in at Bt179m (+41%YoY, +18%QoQ), all-time-high, above our expectation and BB consensus estimated. Impressive result supported by a record high
• MOGU MOGU drove 2Q22 earnings The 2Q22 net profit rose to all-time-high of Bt167m (+32%YoY, +9%QoQ) driven by a solid Mogu Mogu sales (the best-selling products in export markets).
• The 2Q22 revenue rose to all-time-high of Bt1.2bn (+39%YoY, +21%QoQ), thanks to continues growth in international markets especially from Asia (+85%YoY) and EU & America (+63%YoY) due to re-stocking products