Consumer

There is 1 add for the CSI Liquor Index and 1 add/ 2 deletes for the CSI Alcoholic Drink Index in June.
Gansu Huangtai Wine Mktg Ind Co., (000995 CH) will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index.
There will be big selling in Kweichow Moutai (600519 CH) due to the stock being capped in both indices. Smaller capping flows in the other stocks.

Selected European HoldCos and DLC: May 2025 Report

By Jesus Rodriguez Aguilar

Discounts to NAV of covered holdcos mainly widened during May. Coverage of CF Alba is discontinued following delisting.
Discounts (30 May): GBL, 37.9% (vs 35.3%, 2 May); Heineken Holding, 12.5% (vs. 12.3%); Industrivärden C, 9.6% (vs. 9.1%); Investor B, 9.6% (vs. 5.8%); Porsche Automobile Holding, 29.5% (vs. 29.2%);
Rio DLC 22.2% (vs. 25.8%); Vivendi 45% (vs. 46%). What seems interesting: Heineken Holding, vs. Heineken, Porsche SE vs. listed assets and Rio DLC (long RIO LN/short RIO AU).

Welspun Living: Navigating with Strategic Diversification and Domestic Focus

By Sudarshan Bhandari

FY25 consolidated revenue surpassed INR 10,000 crore mark, increasing 8.9% year-on-year. Emerging businesses contributed over 30% to revenue.
Despite achieving the revenue milestone, Q4 performance and FY25 margins were impacted by cautious customer order patterns due to US tariff uncertainty.
The company is de-risking its geographical exposure by reducing reliance on the US while focusing on the potential from the UK FTA and strengthening its domestic presence, through strategic acquisition.

Pre IPO Eastroc Beverage Group (H Share) – The Strength, the Concerns and the Outlook

By Xinyao (Criss) Wang

2024 is a milestone year. The weighted average ROE set a new high. Due to cost dilution brought by economies of scale, net profit growth was higher than revenue growth.
The risk of relying on a single category hasn’t been eliminated. Traditional advantages of offline channels are becoming saturated. There is a gap between channel structure and new consumer forces
Eastroc’s valuation is expected to be higher than the industry average and peers due to its higher growth rate, but investors needs to consider the H/A premium

Triveni Engineering & Industries: Mega Restructuring & Stellar Performance

By Sudarshan Bhandari

Triveni reported record revenue and PAT for Q4 FY25, largely driven by the exceptional performance of the Power Transmission business and improved sugar realisations despite operational challenges
The strong performance of the Power Transmission segment and strategic focus on exports highlights its potential as a key growth driver, while the proposed restructuring aims to unlock values.
Company is guiding for improvement in each segment including Sugar, IMIL and transmission in the upcoming year.

Birkenstock’s Profit Engine Revealed: How New Factories & Smart Tech Are Boosting Margins Fast!

Birkenstock Holding plc’s second-quarter results for fiscal year 2025 highlight a period of robust revenue growth, resilient operational strategies, and geographical expansion.
Total revenues reached EUR 574 million, marking a 19% increase year-over-year in reported currency, and an 18% increase in constant currency.
This growth was fueled by a balanced performance across both Business-to-Business (B2B) and Direct-to-Consumer (DTC) channels, both of which exhibited strong demand dynamics and strategic channel enhancements.

Nike Reinvents Its Iconic Lineup—Can Its Bold Product Overhaul Halt The Revenue DECLINEt?

In the latest earnings, NIKE, Inc. reported its fiscal 2025 third-quarter results.
Various strategic initiatives, including a focus on expanding product offerings and enhancing brand presence, were discussed by CEO Elliott Hill and CFO Matt Friend.
The results show a complex scenario for NIKE, characterized by both challenging headwinds and promising initiatives aimed at revitalizing growth.

Deckers Brands: Will Its Strategic Investments in SG&A And Brand Awareness Help in Sustainable Growth?

Deckers Brands recently reported its financial performance for the fourth quarter and the fiscal year 2025.
The company showcased robust growth across its portfolio, emphasizing the success of its leading brands, HOKA and UGG.
With a revenue increase of 16% year-over-year, the company approached $5 billion in sales, signaling strong brand appeal and strategic market positioning.

BJ’s Wholesale Club: Initiative for Fresh 2.0 to Enhance Its Market Share In The Competitive Landscape!

BJ’s Wholesale Club Holdings, Inc. showed a strong start to the fiscal year 2025, surpassing initial expectations with impressive top and bottom-line growth.
The company registered a 4.7% increase in net sales, with operating income and net income leaping by 27% and 35% respectively.
Membership growth continues to be a core driver, reflecting BJ’s strategic focus on value, enhanced merchandising, and digital convenience.

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Jun 02

Daily Brief Consumer: Isuzu Motors, Seven & I Holdings, Tjx Companies, DigiPlus Interactive , Target Corp, Home Depot Inc, Toll Brothers, Water Oasis, ZOZO Inc, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!
DigiPlus Interactive (PLUS PM): Galloping Away Into A Strong Q2 FY25
Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?
How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!
Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?
Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
Zozo Purchase of Lyst Is Timely
Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week.

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Mayne Pharma (MYX AU), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Spartan Resources (SPR AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP), Nippon Road (1884 JP).

The TJX Companies: Leveraging Vendor Relationships For A Competitive Edge!

The TJX Companies, Inc. reported its first-quarter results for fiscal year 2026, demonstrating resilient performance across its various divisions amidst a challenging macroeconomic environment.
The company achieved a 3% increase in comparable store sales, driven by higher customer transactions, with each division—both in the U.S. and internationally—contributing positively.
Notable growth was observed in the HomeGoods division, which outperformed its competitors, delivering a 4% increase in comp sales and a 70 basis point improvement in segment profit margin compared to the previous year.

DigiPlus Interactive (PLUS PM): Galloping Away Into A Strong Q2 FY25

By Sameer Taneja

DigiPlus Interactive (PLUS PM) reported robust Q1 FY25 results, driven by an increase in MAUs to 7.5 million (6.5 in Q4). The company maintained its market share at ~45%.
Net margins expanded 200 bps QoQ (to 18.2%), as the company benefited from a 500 bps reduction in its share of GGR to PAGCOR.
The stock has increased by >400% since January 2024, but it trades at 14.1x FY25 PE, with growth catalysts from the Philippines and Brazil expected in the future.

Target Corporation: Will Its Investments in Digital Fulfillment and Supply Chain Pay Off?

Target Corporation faced a set of challenging conditions in the first quarter of 2025, significantly impacting its overall performance.
The detailed analysis of the quarterly results reveals a balanced mix of positive aspects, setbacks, and strategic adjustments, offering investors insights into the company’s current standing and future priorities.
First-quarter sales for Target declined by 2.8%, primarily driven by a decrease in comparable sales of 3.8%.

How The Home Depot Plans to Capture a $50 Billion Opportunity Amid Economic Uncertainty!

The Home Depot, during its first quarter of fiscal 2025, reported sales of $39.9 billion, which represented a 9.4% increase compared to the same period last year.
However, the company’s comparable store sales declined slightly by 0.3%.
The U.S. comps showed a modest increase of 0.2%.

Toll Brothers: Will Its Spec Home Strategy & Market Adaptation Be A Breakthrough Move?

During its second quarter earnings for fiscal 2025, Toll Brothers, Inc. outlined its financial and operational performance amidst a challenging economic environment, providing insights into its strategies and market outlook.
Toll Brothers reported robust financial performance for the second quarter, achieving record second quarter home sales revenue of $2.71 billion, which surpassed the midpoint of their guidance by $236 million.
They delivered 2,899 homes at an average selling price of approximately $934,000.

Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization

By Sameer Taneja

Water Oasis (1161 HK) H1 FY25 results were encouraging and a step in the positive direction as revenue/PAT improved by -2.5%/116% YoY
The company declared a semi-annual dividend of 3.5 cents (6.7% annualized yield) for a 43% payout ratio. Net cash of 633 million HKD represents 90% of the market capitalization.
Trading at 6.0x FY25 PE with earnings stabilization, this is a great name to explore, although we would like to see an improvement in capital allocation.

Zozo Purchase of Lyst Is Timely

Zozo’s purchase of UK mall Lyst will create significant synergies, allowing Zozo to build a strong base in Europe and the US.
The move will allow brands from Japan to sell overseas easily, while also potentially making it simple for European and US brands to sell into Japan.
The deal comes just in time given slowing e-commerce sales in Japan.

Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues

While offering non-serious TOB prices, knowing that the likelihood of TOBs by the activist fund is low, the aim to extract concessions from the REIT and sponsor companies was successful.
The governance problem is the composition of the company, which continues to manage off-balance sheet real estate through its subsidiary REIT asset management company.
So far, however, governance issues have not received much attention, only confirming the sponsor companies’ willingness to continue REIT control and investors’ benefit from higher REIT stock prices by TOBs.

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Jun 01

Daily Brief Consumer: Aurora World, Shenzhen Overseas Chinese (A), Expedia Group, Inc., Installed Building Products, Nexstar Broadcasting Group, Inc, Tapestry Inc, US Foods Holding Corp, Crocs Inc, Great Wall Motor and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Korea Small Cap Gem #35: Aurora World
CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes
Expedia Group: Diverse B2B Growth Opportunities As a Significant Growth Lever!
Installed Building Products (IBP): Its Efforts Towards Expansion in Heavy Commercial Business & Other Major Drivers!
Nexstar Media Group’s Bold Play on Political Ads & Digital Power Could Shock the Industry; What Lies Ahead?
Tapestry Inc.: An Insight Into its Direct-to-Consumer Model
US Foods Holding Corp.: A Tale of Health Care & Hospitality Sector Expansion!
Crocs Inc. Accelerates Global Expansion With Aggressive Market Penetration in China
HK Connect SOUTHBOUND Flows (To 30 May 2025); Volumes OK, Big Net Buying on SOEs/Financials

Korea Small Cap Gem #35: Aurora World

Aurora World is best known for its plush toys (Palm Pals and YooHoo & Friends). It is increasingly trying to leverage its toy character brands to expand into digital contents.
What makes Aurora World so interesting is its excellent fundamentals and deeply discounted valuations relative to The Pinkfong Company (IPO in 2H25) and SAMG Entertainment.
Aurora World generated more than 80% of its sales in overseas markets including the United States, U.K., and Hong Kong.

CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes

There are 3 adds and 4 deletes for the CSI All Share Real Estate Sector Index in June. There are changes driven by changes to the sector classification for stocks.
Passive trackers will need to buy between 0.2-0.65x ADV in the adds and sell between 0.15-1.75x ADV in the deletes.
The deletes have outperformed the adds over the last few months and some of that could dissipate over the next couple of weeks.

Expedia Group: Diverse B2B Growth Opportunities As a Significant Growth Lever!

Expedia Group’s recent financial results for Q1 2025 present a complex blend of performance metrics that reveal both strengths and areas of concern.
The company’s gross bookings climbed by 4% to $31.5 billion, while revenue increased by 3% to $3 billion, aligning with expectations but reflecting a modest growth trajectory.
The growth has been hampered by weaker travel demand within and into the U.S., despite strong performances elsewhere.

Installed Building Products (IBP): Its Efforts Towards Expansion in Heavy Commercial Business & Other Major Drivers!

Installed Building Products (IBP) reported its first quarter 2025 financial results, reflecting mixed performance amidst a challenging macroeconomic landscape affecting the construction industry.
The company’s performance was impacted by housing market dynamics and adverse weather conditions, although strategic initiatives and a strong operating framework provided some balance.
On the positive side, IBP maintained a solid financial base with significant cash flow, highlighting its capacity for growth via acquisitions.

Nexstar Media Group’s Bold Play on Political Ads & Digital Power Could Shock the Industry; What Lies Ahead?

Nexstar Media Group, a significant player in the broadcast television industry, delivered record financial results in the fourth quarter of 2024.
The company reported $5.4 billion in total net revenue for the year, marking the highest in its 28-year history.
This performance was primarily driven by a strong political advertising cycle and growth in distribution revenue, alongside the company’s strategic positioning in nearly 85% of competitive election markets.

Tapestry Inc.: An Insight Into its Direct-to-Consumer Model

Tapestry, Inc. has recently released its third-quarter results, which exceeded market expectations, highlighting the company’s strong positioning and operational momentum across its brands.
The quarter saw accelerated revenue growth of 8% on a constant currency basis, driven primarily by the performance of its flagship brand, Coach, which achieved a 15% revenue increase.
Geographic performance was varied, with Europe seeing a 35% increase, substantial gains in the Asia-Pacific region, and steady growth in North America.

US Foods Holding Corp.: A Tale of Health Care & Hospitality Sector Expansion!

US Foods Holding Corp.’s latest earnings report for the first quarter of fiscal 2025 presents a mixed yet cautiously optimistic outlook.
The company reported strong profitability, with adjusted EBITDA growing more than 9% and adjusted diluted EPS increasing by 26%.
Notably, this performance was achieved despite adverse weather conditions and an overall challenging operating environment, highlighting the company’s effective execution of its strategic initiatives.

Crocs Inc. Accelerates Global Expansion With Aggressive Market Penetration in China

Crocs, Inc. reported a relatively stable first quarter of 2025 despite facing a volatile macroeconomic environment, mainly due to evolving global trade policies.
The company’s total revenues grew by 1% to $937 million, exceeding their guidance of a potential 1.5% decline.
This growth was driven by the Crocs brand, which saw revenues increase by 4% to $762 million.

HK Connect SOUTHBOUND Flows (To 30 May 2025); Volumes OK, Big Net Buying on SOEs/Financials

Gross SOUTHBOUND volumes back below US$12bn a day this past week, but net buying was nearly US$700mm a day, which was decent.
Among the top buys as a percentage of volume, FINANCIALS, ENERGY, TELECOMS stand out, dramatically. Among top sells, it is CONSUMER and INFO TECH dominating the top 20. Again.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

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May 31

Daily Brief Consumer: Texas Roadhouse, Samyang Foods, Hang Seng Index, Carvana , Viacom Inc Class B, Ambev , Restaurant Brands Internationa, TSE Tokyo Price Index TOPIX, Valor Holdings, Planet Fitness Inc Cl A and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Texas Roadhouse: A Tale Of Smart Menu Pricing & Inflation Defense Tactics!
Korean F&B: Focus on Companies With Strongest Export Growth
HSI Index Options Weekly (May 26-30): Choppy Tape, One Strike Rules Them All
Carvana Co.: Is The Third-Party Marketplace Expansion Its Secret Weapon For Growth?
VIAB US – How Paramount Global Is Mastering Linear-Streaming Synergy to Dominate Sports and Series!
Ambev S.A.: How Are They Dealing With Competitive Market Dynamics & Other Risks?
Restaurant Brands International (QSR): Are Their Efforts Towards Revamping Burger King U.S. Paying Off?
Could It Be that the Unit Share System Has Helped to Turn Away from Growing Shareholder Interests?
Valor Responds to Trial-Seiyu Threat
Planet Fitness Expands Its Global Footprint with Breakout Success in Spain & Australia; What Lies Ahead?

Texas Roadhouse: A Tale Of Smart Menu Pricing & Inflation Defense Tactics!

Texas Roadhouse reported its first quarter financial results, demonstrating both strengths and challenges in its business performance.
The company recorded a revenue of over $1.4 billion, with same-store sales increasing by 3.5% and average weekly sales reaching all-time highs.
Notably, March experienced the highest weekly sales across Texas Roadhouse’s three brands: Texas Roadhouse, Bubba’s 33, and Jaggers.

Korean F&B: Focus on Companies With Strongest Export Growth

In this insight, we provide 3 major fundamental criteria for screening major Korean F&B companies.
Three major criteria include 3 years CAGR revenue growth of 5% or more, increase in net margin in 2024, and overseas sales more than 10% of total sales.
Of the 30 Korean F&B companies mentioned in this insight, only six companies meet these criteria including Samyang Foods, Orion Corp, Hitejinro, Lotte Wellfood, Daesang Corporation, and Pulmuone.

HSI Index Options Weekly (May 26-30): Choppy Tape, One Strike Rules Them All

By John Ley

HSI traded sideways for a third straight week as macro headlines swirled and tariffs turned internally litigious.
Volatility drifted lower, with 1M implied vol dropping below its 1-year median for the first time in months.
Call volumes were significantly higher led by one strike in particular.

Carvana Co.: Is The Third-Party Marketplace Expansion Its Secret Weapon For Growth?

Carvana Co.’s latest earnings for Q1 2025 highlighted several key achievements as well as ongoing challenges.
The company reported robust growth across several financial metrics, reflecting the effectiveness of its business model in a competitive and fragmented automotive retail industry.
On the positive side, Carvana achieved record retail units sold at 133,898, representing a 46% increase year over-year.

VIAB US – How Paramount Global Is Mastering Linear-Streaming Synergy to Dominate Sports and Series!

Paramount Global’s Q1 2025 financial results presented a mixed picture of the company’s performance and strategic positioning.
On the positive side, Paramount reported a 2% revenue growth, when excluding the Super Bowl, alongside a significant year-over-year improvement in Direct-to-Consumer (DTC) OIBDA by approximately $180 million.
The company also generated $123 million in free cash flow, demonstrating efficient cash management amid a challenging advertising environment.

Ambev S.A.: How Are They Dealing With Competitive Market Dynamics & Other Risks?

Ambev S.A.’s recent financial disclosures provide a mixed picture for investors, underscored by a strong start to 2025 but tempered by broader economic challenges.
The company reported a robust top-line performance for the first quarter of 2025, with revenues rising by high single digits and EBITDA growing by double digits, despite nominal volume growth of just 0.7%.
This performance signifies healthy operational efficiency and strategic execution across various business pillars, though the flat net income reflects substantial tax comparisons from the previous year.

Restaurant Brands International (QSR): Are Their Efforts Towards Revamping Burger King U.S. Paying Off?

Restaurant Brands International recently held a financial review for the fiscal year and fourth quarter ending December 31, 2024.
The company displayed notable achievements and areas for improvement across its diversified portfolio, which includes household names such as Tim Hortons, Burger King, Popeyes, and Firehouse Subs, under its wing.
The company reported a moderate growth trajectory with a 2.3% increase in comparable sales, a 3.4% growth in the number of net restaurants, and a 5.4% rise in system-wide sales.

Could It Be that the Unit Share System Has Helped to Turn Away from Growing Shareholder Interests?

The reason behind “TSE’s request to lower minimum investment amount to around JPY100,000” is to increase stocks that can be purchased with monthly 100,000 yen of NISA’s installment investment limit.
While the share unit system has allowed listed companies to reduce various costs, it has neglected the equal rights of shareholders who own less than one unit of stock.
Now that advances in shareholder administrative tools can reduce administrative costs, shareholders could be trade as few as one share and be granted the same rights as a single shareholder.

Valor Responds to Trial-Seiyu Threat

After seeing Trial acquire Seiyu, Chubu-based supermarket group, Valor, has announced it will expand into other regions too, accelerating its plans by two years.
It hopes to take advantage of the current disruption happening in the supermarket sector.
First stop will be Kansai which is ripe for disruption given the poor competitive positioning of the incumbents.

Planet Fitness Expands Its Global Footprint with Breakout Success in Spain & Australia; What Lies Ahead?

Planet Fitness demonstrated a solid performance in the first quarter of 2025, aligning with its strategic goals amidst a challenging macroeconomic environment.
The fitness company reported an increase in its member base to 20.6 million, reflecting growth by approximately 900,000 members from the previous year.
The system wide same club sales rose by 6.1%, with the company opening 19 new clubs globally, totaling 2,741 locations.

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May 30

Daily Brief Consumer: Isuzu Motors, SHEIN, Mazda Motor, The Pinkfong Company, Miniso, Globus Spirits, Build A Bear Workshop, Lands’ End Inc, Light & Wonder and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

[Japan ECM] Financial Crossholders Offering Isuzu (7202) – Big Buyback Covers Most Of The Back End
Isuzu Motors Placement – Relatively Small Deal Along with Buyback
Shein IPO: Hong Kong Yes, London No
CIT Saves the World from Tariffs, but Not Mazda (7261)
Initial Thoughts on The Pinkfong Company IPO (Creator of the Baby Shark Brand)
[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit
Globus Spirits: Consumer Business Growth & Manufacturing Stability
BBW: 1Q Review: Impressive Q; Guide Right for the Times; Reiterate Buy, $58 PT
LE: 1Q Preview: Being Creative in Uncertain Times; Reiterate Buy, $20 PT
Light & Wonder’s Secret Weapon: Premium Games & A $1.4B Profit Target in Sight; But Is It Achievable?

[Japan ECM] Financial Crossholders Offering Isuzu (7202) – Big Buyback Covers Most Of The Back End

In line with the trend of financial institutions led by non-life insurers selling out of their cross-holdings, today we get an offering of shares held in Isuzu Motors (7202 JP).
Today we got an announcement of 29.28mm shares being offered by a dozen financial institutions and a greenshoe for 15% more. At a 10% discount from here it’s ¥57bn/US$400mm.
It is 16 days of ADV, which is big, but the company also announced a ¥50bn buyback from Pricing+6 to end of March 2026. That should stabilise things.

Isuzu Motors Placement – Relatively Small Deal Along with Buyback

By Sumeet Singh

A group of shareholders aims to raise around US$380m via selling around 4% of Isuzu Motors (7202 JP).
Being another cross-shareholding unwind in Japan, it shouldn’t carry much negative connotations, in our view.
In this note, we will talk about the placement and run the deal through our ECM framework.

Shein IPO: Hong Kong Yes, London No

Shein announced it is planning for an IPO in Hong Kong in 2025. Shein tried to go public in London, but its attempt has essentially failed.
Due to tariff war and ending de minimis for shipments from China and Hong Kong by the U.S. government, the valuation of Shein could decline to less than $50 billion.
Now, as long as the valuation is not excessive but reasonable, there could be a decent demand for this IPO of Shein in Hong Kong.

CIT Saves the World from Tariffs, but Not Mazda (7261)

By Michael Allen

Mazda leaped upward with other Auto companies following a Court of International Trade ruling that nullified Trump’s reciprocal tariffs but left auto tariffs at 25%.
The CIT has historically given presidents much more leeway on rules that the auto tariffs fall under, so challenges to these tariffs are less likely to succeed.
The tariff threat to Mazda is existential, and in our view, consensus forecasts have not even begun to appreciate this.

Initial Thoughts on The Pinkfong Company IPO (Creator of the Baby Shark Brand)

By Small Cap Consumer Research

In this insight, we provide our initial thoughts on The Pinkfong Company IPO which is expected to be completed in KOSPI in 2H 2025.
The Pinkfong Company is the creator of the Baby Shark brand. Its original “Baby Shark Dance” is the most viewed Youtube video ever (15.9 billion views as of May 2025).
The Pinkfong Company’s valuation was more than 1 trillion won in 2021 (Series B investment round).

[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit

By Eric Wen

MNSO reported 1Q25 rev. in line with cons. but non-GAAP op. profit 17% below and GAAP net income 33% below cons,
We view MNSO’s store expansion as being below its bar of quality. Downside risks were not fully priced in. Our 2025 revenue/net profit forecasts are 7.0%/8.2% below consensus;
We cut the TP from US$16 to US$13.5/ADS and keep the SELL rating.

Globus Spirits: Consumer Business Growth & Manufacturing Stability

By Sudarshan Bhandari

Globus Spirits continues its strategic pivot towards high-margin consumer business, with P&A revenue up 186% in FY25 and Regular & Others up 17%.
The manufacturing segment’s margins are stabilising due to favourable government ethanol policies and raw material availability, enhancing overall profitability.
This shift, coupled with significant investments in the key Uttar Pradesh market and near completion of major capex, positions the company for continued profitable growth, reinforcing a positive view.

BBW: 1Q Review: Impressive Q; Guide Right for the Times; Reiterate Buy, $58 PT

We are reiterating our Buy rating and $58 price target for Build-A-Bear Workshop and slightly lowering our EPS projections to account for the current tariff-driven environment, as the company announced material 1Q top and bottom line upside, driven by strong offerings, seasonal shifts and further gains in the higher margin franchising and third party segments.
Further, management continues to return capital to shareholders via share repurchases and quarterly dividends, while still maintaining a cash rich ($3.37 per share), debt free balance sheet.
That said, given the current uncertain economic environment, management, despite the 1Q upside, remained conservative in their guidance, reiterating FY25 revenue growth of mid single digits and reducing the pre-tax projection to $61 to $67 million.

LE: 1Q Preview: Being Creative in Uncertain Times; Reiterate Buy, $20 PT

By Small Cap Consumer Research

We are reiterating our Buy rating, price target and projections for Lands’ End with the company announcing 1QFY25 (April) results before the open on Thursday.
We believe in the key tenets of the Lands’ Ends story, from: 1) lowering discounting (and inventory); 2) shifting the product and customer mix to a younger, more fashion driven buyer who will purchase multi-item offerings; 3) expanding and shifting the product mix with higher-margin licensed categories; 4) continuing to expand the online marketplace offerings; 5) leveraging the company’s strong brand and ability to quickly respond to capture more business services contracts and 6) growing the international business via owned and licensed offerings.
That said, even before tariffs, the optics of 2025, with increased levels of licensed goods, would make this year a period of transition.

Light & Wonder’s Secret Weapon: Premium Games & A $1.4B Profit Target in Sight; But Is It Achievable?

Light & Wonder (LNW) has demonstrated resilient growth in its first quarter of 2025, reflective of a comprehensive strategy focused on product innovation, operational excellence, and a diversified gaming portfolio.
The company reported a 2% increase in consolidated revenue year-over-year, reaching $774 million, driven primarily by its gaming and iGaming segments.
The gaming division, which accounted for $495 million of the revenue, experienced growth across various business lines, notably in gaming operations, tables, and systems.

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May 29

Daily Brief Consumer: 52TOYS Development, The Walt Disney Co, MercadoLibre , Amara Holdings, TSE Tokyo Price Index TOPIX, Topbuild Corp, Zee Media Corporation, Wynn Resorts, Carvana , Rivian Automotive and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

52 Toys Development Co. Ltd Pre-IPO Tearsheet
Disney’s $875 Million Streaming Comeback and UAE Power Move Could Change Everything!
MercadoLibre’s Fintech Empire Is Growing: Credit
Amara (AMA SP): Trading At Terms. Will Be Suspended At Offer Close. Tender/Sell – Or Avoid
Not the Timing of Annual Securities Report Disclosure, but Rather Company Management Objectives
TopBuild Corp Is Powering Ahead with Aggressive M&A Playbook To Capture Market Share; What’s Next?
Prices Drop, Eyes Pop: Insider Buying Update – May 2025 (Small Cap Companies)
Wynn Resorts: Will Its Global Expansion Efforts & High-Stakes Bet on the UAE Yield Results?
Upgrading Consumer Discretionary (XLY) To Overweight; 5700-5785 SPX Gap Support Holding as Expected
Rivian Automotive: Will its Expansion of Production & New Models Help Stay Competitive In A Turbulent EV Market?

52 Toys Development Co. Ltd Pre-IPO Tearsheet

By Rosita Fernandes

52TOYS Development (TOY HK) is planning to raise about US$200m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citi, Huatai International.
52Toys was established in 2015. The firm is one of the leading IP toy company in China.
According to CIC, the company was the second-largest multi-genre Chinese IP toy company in terms of China GMV in 2024.

Disney’s $875 Million Streaming Comeback and UAE Power Move Could Change Everything!

Walt Disney’s second-quarter 2025 earnings report was met with a wave of investor enthusiasm, driving the stock up 11% to over $102.
This optimism was not only driven by stronger-than-expected financials but also by the high-profile announcement of a new theme park in Abu Dhabi.
The planned park marks Disney’s seventh globally and is set to be developed in collaboration with the Miral Group.

MercadoLibre’s Fintech Empire Is Growing: Credit

MercadoLibre, the leading e-commerce and fintech company in Latin America, has reported its financial performance for the first quarter of 2025, showcasing strong growth across its major business segments.
The company continues to consolidate its position as a key player in both the e-commerce and financial services sectors in the region.
On the positive side, MercadoLibre has maintained robust growth in net revenues, reflecting the momentum achieved in 2024.

Amara (AMA SP): Trading At Terms. Will Be Suspended At Offer Close. Tender/Sell – Or Avoid

By David Blennerhassett

Back on the 28 April, Amara (AMA SP), a property/hotel play, announced a best-and-final conditional S$0.895/share Offer, a 27% to undisturbed and a lifetime high, from the controlling Teo family.
This was the Family’s second attempt to take Amara private after its November 2023 best-and-final unconditional Offer at S$0.60/share as discussed in Amara (AMA SP): Teo Family’s Lifetime High Offer.
The Offeree circ is now out. The IFA says fair & reasonable. The Offer closes on the 10th June – no extension. The Offer is unconditional in all respects.

Not the Timing of Annual Securities Report Disclosure, but Rather Company Management Objectives

For dialogue with shareholders, annual securities reports should be disclosed in English for overseas investors, who are eager to request the pre-AGM submission and have high demand for this information.
To change a company to a mindset of dialogue with shareholders rather than controlling AGM, it needs to have a successful experience in converting management to create value through dialogue.
It’ll be interesting to see if the traditional values of companies, which has been accustomed to management that does not face shareholders, can be changed in the coming years.

TopBuild Corp Is Powering Ahead with Aggressive M&A Playbook To Capture Market Share; What’s Next?

TopBuild Corp.’s first quarter performance of 2025 reflects a mixed outlook with certain challenges and strengths highlighted across their operations.
With a reported decline of 3.6% in total sales to $1.2 billion, the company felt the impact of weakened residential construction demand.
This decline in new residential construction, the company’s largest segment, was partially mitigated by growth in its commercial and industrial sectors.

Prices Drop, Eyes Pop: Insider Buying Update – May 2025 (Small Cap Companies)

By Sreemant Dudhoria

We highlight small cap companies that experienced significant insider buying during May 2025, as reported on the stock exchanges.
As May 2025 is a earnings season month ,very few companies reported insider transactions. However, we should expect increased buy transactions once the earnings season concludes.
Real Estate, Media, Power, Industrials and Financial services are top sectors which saw insider buying in the small cap universe.

Wynn Resorts: Will Its Global Expansion Efforts & High-Stakes Bet on the UAE Yield Results?

Wynn Resorts recently conducted its Q1 2025 earnings review, which showcased both strengths and challenges within its operations.
This assessment provides a comprehensive analysis of the company’s recent performance and strategic positioning.
In Las Vegas, Wynn Resorts acknowledged the significant impact of tariffs on its operations, with a pronounced effect on capital expenditures (CapEx) rather than operating expenditures (OpEx).

Upgrading Consumer Discretionary (XLY) To Overweight; 5700-5785 SPX Gap Support Holding as Expected

By Joe Jasper

A weak 20-year note auction last Wednesday sparked the first semi-meaningful pullback since this lockout rally began April 22nd, when we turned short-term bullish (4/22/25Compass) as SPX was testing 5100-5120.
We will be watching the 10- and 30-year Treasury yields closely, as both are approaching important resistance levels (more on that below).
Unsurprisingly, SPX only tested short-term gap support on the pullback at 5700-5785, where we said to expect support in last week’s Compass (5/20/25). Expect this gap support to hold.

Rivian Automotive: Will its Expansion of Production & New Models Help Stay Competitive In A Turbulent EV Market?

Rivian Automotive Inc.’s latest earnings results present a nuanced view of the company’s current trajectory and strategic plans.
The first quarter of 2025 showcased Rivian’s efforts to achieve financial and operational milestones, while also highlighting potential challenges it faces in the evolving market landscape.
On the positive side, Rivian reported a second consecutive quarter of positive gross profit, achieving $206 million.

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May 28

Daily Brief Consumer: Seven & I Holdings, Foshan Haitian Flavouring & Food Company, S.M.Entertainment Co, Greaves Electric Mobility Ltd (GEML), Netflix Inc, Korea Stock Exchange KOSPI 200, PDD Holdings, Seres Group , Kraft Heinz Co and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Seven & I Holdings (3382 JP): Wait and Hope
HK Strategy: Some Consumer IPO Pipelines and Their Proxies
HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale
Conbini Winning by Adding Value but Not Seven Eleven
Greaves Electric Mobility Ltd Pre-IPO – Battles Market Share Erosion and Reliance on Subsidies
Netflix Faces The Heat & The Spotlight: Is The Streaming Giant Still A Safe Bet?
KOSPI 200 Tactical Outlook After Index Rebalancing
Pinduoduo: Record Ownership Decline Amid Sharp Rotation
Seres Group A/H Listing – Rapid Growth but Its Partner’s Sanctions Risk Might Keep Some Away
Kraft Heinz Just Lost Berkshire’s Board Backing—Is A Breakup Or Buyout Next?

Seven & I Holdings (3382 JP): Wait and Hope

The Seven & I Holdings (3382 JP) AGM was a vote of confidence in the Board’s strategy of pursuing two parallel paths to generate value.
The Board’s management initiatives are steadily being implemented, but have yet to deliver shareholder value. Since they were announced, the share price has modestly outperformed the Nikkei 225.
7&I and Couche Tard signed an NDA but a viable divestiture plan to gain US regulatory approval remains in doubt, particularly as PE has emerged as the likely bidder.

HK Strategy: Some Consumer IPO Pipelines and Their Proxies

By Osbert Tang, CFA

Hong Kong’s IPO market has gathered momentum lately, especially with the overwhelming response to CATL (3750 HK). Consumer IPOs are the next ones to gather interest.
Foshan Haitian Flavouring & Food Co (FHF HK) is the most imminent one, potentially seeking up to US$1bn. Without significant peers in Hong Kong, it should attract good attention.
The other interesting ones include Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH), Three Squirrels (TRS HK), and Eastroc Beverage Group (EBG HK).

HYBE to Sell Its 9.4% Stake in SM Entertainment to Tencent Music in a Block Deal Sale

On 27 May, HYBE announced that it will sell its 9.4% in S.M.Entertainment (2.21 million shares) for about 243 billion won (US$145 million) to Tencent Music Entertainment.
HYBE’s sale of its stake in SM Entertainment is expected to take place on Friday (30 May) after the market close through an after hours block deal trade.
The block deal sale of SM Entertainment by HYBE to Tencent is likely to have a negative impact on SM Entertainment’s shares mainly due to large share price discount (15.3%).

Conbini Winning by Adding Value but Not Seven Eleven

The four largest convenience stores all had varying results last year, two setting records for high profits, and the other two seeing worrying shortfalls.
The biggest differentiating factor was how each handled the problem of inflation, either through lower prices or by offering added value.
Unfortunately, Seven Eleven was the worst performer of the big three, still suffering from a price perception problem and lower levels of innovation compared to Lawson and Familymart.

Greaves Electric Mobility Ltd Pre-IPO – Battles Market Share Erosion and Reliance on Subsidies

By Troy Wong

Greaves Electric Mobility Ltd (GEML) is looking to raise about US$120m in its upcoming India IPO.
GEML is a manufacturer of electric vehicles in India, specializing in E-2Ws and 3Ws to a lesser extent. It’s focusing on shifting towards higher ASP High Speed E-2Ws.
Historically, demand has been sensitive to whether government subsidies are available and had impacted margins before.

Netflix Faces The Heat & The Spotlight: Is The Streaming Giant Still A Safe Bet?

In a turbulent 2025, Netflix has emerged as one of the most closely watched tech stocks, not just for its market performance but also for its evolving business strategy.
The streamer’s share price is up over 30% year-to-date, nearing a $500 billion market cap, outpacing the broader S&P 500 by a wide margin.
Amid global macro uncertainty and shifting consumer behavior, Netflix is experimenting aggressively — hosting live NFL games, expanding into gaming, leveraging artificial intelligence in content production, and responding to a proposed 100% tariff on foreign-produced films.

KOSPI 200 Tactical Outlook After Index Rebalancing

By Nico Rosti

Korea Exchange announced its KOSPI 200 rebalance changes on 27 May, Sanghyun Park and Douglas Kim wrote extensively about this, here we want to focus purely on the tactical strategy.
The KOSPI 200 INDEX pulled back last week, then surged on Monday and stagnated on Tuesday, the index has plenty of room to go higher according to our model.
According to our model, the number of rallies vastly offset the number of pullbacks when this pattern is encountered (=pullbacks are rare), this could be read as a bullish indication.

Pinduoduo: Record Ownership Decline Amid Sharp Rotation

By Steven Holden

Pinduoduo sees one of the steepest ownership drops in EM funds, with 95 net sellers and 28 closures in six months.
Major closures from Aubrey, AllianceBernstein, UBS, and BNP Paribas; largest outflows from Fidelity and BlackRock.
Despite sharp declines, PDD remains in 36.5% of GEM funds and a top 10 holding in China & HK.

Seres Group A/H Listing – Rapid Growth but Its Partner’s Sanctions Risk Might Keep Some Away

By Sumeet Singh

Seres Group (601127 CH), a Chinese NEV manufacturer, aims to raise around US$2bn in its H-share listing.
Seres Group (SG) is principally engaged in the research and development, manufacturing, sales and services of new energy vehicles (NEV) as well as core NEV components.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

Kraft Heinz Just Lost Berkshire’s Board Backing—Is A Breakup Or Buyout Next?

The Kraft Heinz Company has ignited speculation across the investment world with its recent confirmation that it is exploring “potential strategic transactions” aimed at unlocking shareholder value.
This announcement comes at a time of mounting pressure for the food giant, which owns legacy brands such as Heinz, Oscar Mayer, and Kraft.
Notably, the news coincided with another significant development: Berkshire Hathaway, a long-time stakeholder holding 27.5% of the company, has relinquished its board seats, with Timothy Kenesey and Alicia Knapp stepping down.

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May 27

Daily Brief Consumer: Tsuruha Holdings, Fuji Media Holdings, Meituan, Uni President Enterprises, Thai Beverage, NIFTY Index, Foshan Haitian Flavouring & Food, BYD, TSE Tokyo Price Index TOPIX, DoorDash and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
Meituan (3690 HK): 1Q25, Main Businesses Up by 20%
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Five Changes; US$5.2bn Trade; Other Index Flows
Thai Beverage (THBEV): Undervalued with Catalysts Coming
NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)
Foshan Haitian Flavouring H Share Listing: The Investment Case
Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold
Is Now Time to Move Forward with Efforts to Raise % Female Board Directors, Even Matching Numbers?
DoorDash Inc.: How Autonomous Delivery Initiatives Could Potentially Redefine Logistics Within The Food Delivery & Broader E-Commerce Sectors!

[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies

This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.
The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon’s interest and NEWCO vs World.

[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits

Fuji Media Holdings (4676 JP) has for years been “undervalued” and owned by value-oriented actively-managed fund managers. Under-used real estate and IP assets. Lack of governance regarding capital.
A Shukan Bunshun article in Dec-2024 reported a former boy band SMAP member and Fuji TV regular made a big payment to an unidentified woman after a June 2023 “incident.”
Fuji TV hemmed and hawed about its involvement. Advertisers bolted. Activists activisted. The chairman resigned. Now Major Activist Dalton has a director slate for the AGM. What Next?

Meituan (3690 HK): 1Q25, Main Businesses Up by 20%

By Ming Lu

In 1Q25, total revenue grew by 18% YoY, with main businesses up by 20% YoY.
The operating margin rose by 3.6 ppt YoY by cutting every cost in 1Q25.
We expect EPS will grow by 37% in 2025 and the stock has an upside of 48%.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Five Changes; US$5.2bn Trade; Other Index Flows

There should be 5 changes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in June. Most changes are due to missing dividend forecasts for constituent stocks.
Constituent changes along with capping changes will lead to a one-way turnover of 17.6% and in a round-trip trade of TWD 157bn (US$5.2bn).
There are multiple stocks that have same-way or opposite flow from trackers of other Taiwan dividend yield weighted indices and presents some interesting trading opportunities.

Thai Beverage (THBEV): Undervalued with Catalysts Coming

By Henry Soediarko

Thai Beverage (THBEV SP) share price has been quite beaten down in the last few years and has not recovered since COVID.
A few near-term catalysts that could revive the share price i.e. government subsidies for tourist flights, Chinese tourists are back, and the lifting of the alcohol sales ban in afternoon.
Cheapest earnings multiple, pays higher dividend yield, high ROE, and also generated USD 420 million free cash flow.

NIFTY Index Outlook (With an Eye on Zomato’s Passive Selling Starting…)

By Nico Rosti

As reported by Brian Freitas , one of the NIFTY Index (NIFTY INDEX) ‘s component (Zomato: Eternal (ETERNAL IN) ) will be subject to big passive selling beginning on Tuesday.
Let’s have a look at the NIFTY Index (NIFTY INDEX) to evaluate the tactical outlook according to our model.
Since our last BUY recommendation in a previous insight in early May, the index has made some progress uptrending, let’s see if the rally can continue…

Foshan Haitian Flavouring H Share Listing: The Investment Case

Foshan Haitian Flavouring & Food (603288 CH), a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$1 billion.
Foshan Haitian Flavouring & Food Company (FHF HK) has been China’s leading condiments company in terms of sales volume for 28 consecutive years.
The investment case rests on its market positioning, return to growth, industry-leading profitability, cash generation and strong balance sheet. However, the valuation of the A Shares is full.

Connect SOUTHBOUND Flows (To 23 May 2025); Volumes OK, Telecoms & Banks Bought, Tech & Consumer Sold

Gross SOUTHBOUND volumes back below HK$100bn a day this past week, but net buying was nearly HK$19bn, which is decent.
Among the top buys as a percentage of volume, FINANCIALS and TELECOMS stand out, dramatically. Among top sells, it is CONSUMER and INFO TECH dominating the top 20.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

Is Now Time to Move Forward with Efforts to Raise % Female Board Directors, Even Matching Numbers?

It is good to see that affirmative action has increased the number of women managerial positions in ITOCHU. This is presumably due to the increase in foreign ownership.
The non-statutory executive officers are not in a legally responsible position and are not involved in management decisions. 2 female independent non-executive directors do not have a management background.
Looking at the board compositions, one notices many issues, but AGMs of many companies are concentrated in June, making it difficult to take the time to scrutinize the convocation notices.

DoorDash Inc.: How Autonomous Delivery Initiatives Could Potentially Redefine Logistics Within The Food Delivery & Broader E-Commerce Sectors!

DoorDash’s latest earnings revealed a nuanced overview of its financial performance and strategic direction, highlighting a mix of strengths and challenges.
The first quarter of 2025 demonstrated significant growth and ongoing investment in expanding its global footprint through strategic acquisitions.
In terms of financial performance, DoorDash saw a continuation of growth trends, with consistent gains in gross order volume (GOV) and earnings before interest, taxes, depreciation, and amortization (EBITDA), underscoring operational efficiency.

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May 26

Daily Brief Consumer: Tsuruha Holdings, Toyota Industries, Eternal, Tongcheng Travel Holdings , Alibaba Group Holding , Foshan Haitian Flavouring & Food Company, Jade Group and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings
Weekly Deals Digest (25 May) – Toyota Industries, Shibaura, ESR, Soundwill, Mayne Pharma, GMO
Zomato/Eternal: The BIG Passive Selling Starts
Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com
Alibaba (9988 HK): Navigating Post-Earnings Volatility
Alibaba (9988 HK): Unpacking the Week’s Savvy Top Options Trades
Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) – Some Points Worth the Attention
Jade Group: Magaseek and Locondo Stall

Tsuruha (3391 JP)/Welcia (3141 JP): Vote Musings

Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.
For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.

Weekly Deals Digest (25 May) – Toyota Industries, Shibaura, ESR, Soundwill, Mayne Pharma, GMO

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: GMO Internet (4784 JP) secondary offering of 91.7 million shares, worth around US$1.9 billion.
Event-Driven developments: Toyota Industries (6201 JP), Shibaura Electronics (6957 JP), ESR Group (1821 HK), Soundwill Holdings (878 HK), Mayne Pharma (MYX AU), Gold Road Resources (GOR AU).

Zomato/Eternal: The BIG Passive Selling Starts

Following shareholder approval of the proposal to reduce the Foreign Ownership Limit from 100% to 49.5%, NSDL has updated the FOL. This starts the process of passive selling in Zomato.
Passives will sell US$350m at the close on Tuesday. There is a low probability of more selling later in the week. There will be bigger selling in August.
The size of the selling in August and beyond will depend on what foreign investors do in the stock till the end of June. Watch the red flag/ breach list.

Tongcheng Travel (780 HK): Regaining Momentum, Better Choice than Trip.com

By Osbert Tang, CFA

Tongcheng Travel Holdings (780 HK)‘s 1Q25 adjusted net profit surged 41.1%, suggesting an accelerating momentum. It should continue to outperform Trip.com Group (9961 HK).
Good cost management, even as revenue rose 13.2%, has enhanced adjusted EBITDA margin by 5.3pp YoY – this trend will sustain.
More visa convenience will boost inbound and outbound travel. At end-1Q25, net cash equals 14% of market capitalisation, and it can still generate ROE of 12-15%.

Alibaba (9988 HK): Navigating Post-Earnings Volatility

By Gaudenz Schneider

Implied Volatility Trends:Alibaba Group Holding’s (9988 HK) one-month implied volatility has significantly receded to the 37th percentile after its 15 May earnings, reflecting a substantial implied vola crush.
Skew and Term Structure Dynamics: The implied volatility term structure is now slightly upward-sloping with longer-dated options commanding a small premium. Skew dynamics indicate cheaper puts.
Open Interest Distribution: Liquidity is greatest in the June and September expiries. Short term strikes are concentrated near or at the money.

Alibaba (9988 HK): Unpacking the Week’s Savvy Top Options Trades

By Gaudenz Schneider

Over the past five trading days, Alibaba Group Holding (9988 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Popular Strategies: Over 35% of all strategies are Calendar or Diagonal Spreads. Bullish and bearish views prevail at equal rates, with very few market-neutral views expressed.
Top Trades: Some market participants were betting on a short term re-bound after the post-earnings drop. Others take a bearish view with finely calibrated medium-term hedges. Trade-examples are presented.

Pre-IPO Foshan Haitian Flavouring & Food Company (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

Despite returning to positive growth, Haitian still failed to achieve its 2024 revenue target, mainly due to underperformance of Soy sauce products, consumption downgrades, slow online layout/distributors recovery.
Haitian would face dual challenges of “cost increase + structural transformation” in the next three years due to inflation and the negative impact of “new standard”. We shared our performance forecast.
High valuation is unsustainable if based on current growth rate.Reasonable valuation is about 20-30x P/E. However, due to the strong sentiment for AH listing, share price may still perform well.

Jade Group: Magaseek and Locondo Stall

Jade Group (3558 JP) made some wild promises about its potential to grow its online fashion mall business last year when it acquired Magaseek.
But recent results suggest what many feared: building scale without due regard for the quality of the assets acquired does not an empire make.
With Magaseek contracting and e-commerce overall showing muted growth, Jade Group´s capacity to escape the shadow of the big three looks limited.

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May 25

Daily Brief Consumer: Toyota Industries, Bajaj Auto Ltd, Floor & Decor Holdings, Mohawk Industries, Shake Shack Inc Class A, Hilton Grand Vacations, Hyatt Hotels Corp Cl A, Instacart, Sirius Xm Holdings, TSE Tokyo Price Index TOPIX and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Last Week in Event SPACE: Toyota Industries, CATL, Mitsubishi Logisnext, Mayne Pharma, Melco
Event Driven: Bajaj Auto Acquired Majority Control of Austrian KTM
Floor & Décor: Diversification In Sourcing & Supply Chain Management to Protect Margins Amidst Tariff Turmoil!
Mohawk Industries Bets Big on Luxury—Can Its Premium Products Help Them Gain Market Share?
Shake Shack: Looking To Redefine Fast-Casual Dining with High-Impact Innovation & Smart Pricing!
Hilton Grand Vacations: Continued Expansion of HGV Max and Bluegreen Collaboration & Other Major Growth Drivers!
Hyatt Hotels Corporation Surges Ahead as Owned Properties Deliver Record-Breaking Returns!
Maplebear Inc (Instacart): A Focus On Enhanced Shopper Efficiency & Experience & Other Major Drivers!
SiriusXM: Launch of New Ad-Supported Tiers to Diversify Revenue Streams; What’s The Long-Term Impact?
A Company that Performs Well Has Shareholders with Influential Equity Interests

Last Week in Event SPACE: Toyota Industries, CATL, Mitsubishi Logisnext, Mayne Pharma, Melco

By David Blennerhassett

Winner winner chicken dinner. A Nikke article suggests a bid higher than ¥6tn for Toyota Industries (6201 JP). In addition, people thinking about ¥18,400/share are going about this incorrectly.
Contemporary Amperex Technology (CATL) (3750 HK) pops on its IPO debut. The HKEx has issued a high concentration warning
Mitsubishi Logisnext Co., Ltd. (7105 JP) is still ragingly cheap given the move to delist dual parent/sub listings and having a global footprint. Own it here and now.

Event Driven: Bajaj Auto Acquired Majority Control of Austrian KTM

By Nimish Maheshwari

Bajaj Auto will take majority control of KTM AG by buying out its Austrian partner in Pierer Bajaj AG and injecting €800 million to close KTM’s court-approved restructuring.
The deal rescues a flagship European brand from insolvency, safeguards KTM’s supply chain, and vaults Bajaj into the global premium-sport segment as an OEM rather than a contract partner.
Bajaj’s pivot from passive investor to turnaround owner adds earnings volatility near-term, but long-term it secures technology, brand equity, and a bigger share of high-margin 400-1,000 cc bikes.

Floor & Décor: Diversification In Sourcing & Supply Chain Management to Protect Margins Amidst Tariff Turmoil!

Floor & Decor Holdings reported its fiscal 2025 first quarter results, offering an insightful view into its strategic positioning and operational efficiencies amid a challenging economic landscape characterized by high volatility and uncertainty.
The company delivered diluted earnings per share (EPS) of $0.45, slightly down from $0.46 in the same period last year, but still surpassing the lower end of its expectations despite a decline in comparable store sales.
Total sales showed a 5.8% increase, reaching $1.161 billion compared to $1.097 billion in the previous year.

Mohawk Industries Bets Big on Luxury—Can Its Premium Products Help Them Gain Market Share?

Mohawk Industries’ fourth-quarter results showed a mixed performance amid ongoing industry challenges.
The company reported net sales of approximately $2.6 billion, consistent with the previous year, although this included the benefit from two additional shipping days.
Positively impacting the results were sales initiatives, restructuring efforts, and productivity improvements.

Shake Shack: Looking To Redefine Fast-Casual Dining with High-Impact Innovation & Smart Pricing!

Shake Shack’s recent quarter results indicate a dynamic period for the company, showcasing both substantial progress and areas with potential challenges.
The company has positioned 2025 as a transformative year, beginning with an ambitious expansion strategy to increase the number of company-operated Shacks to at least 1,500.
This expansion will demand strong leadership and innovative strategies, with a focus on enhancing the guest experience, operational efficiency, and margin improvements.

Hilton Grand Vacations: Continued Expansion of HGV Max and Bluegreen Collaboration & Other Major Growth Drivers!

Hilton Grand Vacations (HGV) reported solid results for the first quarter of 2025, reflecting strong operational performance and strategic initiatives aimed at sustaining its growth trajectory.
The company’s contract sales rose by 10% to $721 million, and adjusted EBITDA reached $248 million, with margins excluding reimbursements at 22%.
These results were driven by a combination of transaction volume growth, increased VPG, and effective process improvements.

Hyatt Hotels Corporation Surges Ahead as Owned Properties Deliver Record-Breaking Returns!

Hyatt Hotels Corporation’s recent earnings for the first quarter of 2025 revealed a mix of solid operational performance and cautious outlook driven by macroeconomic uncertainties.
The company reported strong RevPAR (Revenue per Available Room) growth of 5.7% for the quarter, driven by the luxury segment of its portfolio, which continues to attract high-end consumers prioritizing travel.
Notably, Hyatt’s business model transformation towards an asset-light approach has paid dividends, reducing earnings volatility compared to historical figures.

Maplebear Inc (Instacart): A Focus On Enhanced Shopper Efficiency & Experience & Other Major Drivers!

Instacart’s first quarter financial results for 2025 highlight both growth opportunities and challenges as the company seeks to expand its footprint in the online grocery market.
The adoption of online grocery services remains a key growth area, with Instacart reaching 98% of households in North America.
Despite the ongoing macroeconomic uncertainties, consumer behavior has not shifted unexpectedly, maintaining robust demand across various retail categories.

SiriusXM: Launch of New Ad-Supported Tiers to Diversify Revenue Streams; What’s The Long-Term Impact?

SiriusXM released its Q1 2025 financial results, indicative of the company’s navigation through a challenging economic environment with a focus on its core in-car audience and new strategic direction.
The company’s revenue for the quarter was $2.07 billion, marking a 4% decrease compared to the prior year, reflecting both subscriber base contractions and softer advertising trends.
Net income amounted to $204 million, and adjusted EBITDA was reported at $629 million, both showing slight declines from the previous year.

A Company that Performs Well Has Shareholders with Influential Equity Interests