Consumer

• Rolex acquisition of Bucherer signals the company’s intention to own retail distribution and gain access to what its competitors are doing, with the battleground currently being Europe.
• We believe it will take years for Rolex to digest this acquisition before foraying into other markets, but with a similar approach, potentially making Oriental Watch (398 HK) a target.  
• Trading at 6.9x PE with 50% of the market cap in cash and a ~15% dividend yield, the company presents a great investment opportunity. 

• Astra International (ASII IJ) looks set to have another year of positive growth driven by strong performance from its Auto and 2W businesses and steady performance from United Tractors.
• The company’s move into the EV space has begun with 16 models hybrid or BEV models already launched, with 4W hybrid outperforming ICE given narrowing price differentials. 
• Astra International (ASII IJ) continues to invest in core growth areas of the Indonesian economy, with a strong sustainability bent. Valuations are attractive versus history on 8.3x FY2024E PER. 

• Tuhu Car (2007986D HK) is looking to raise up to US$300m in its upcoming Hong Kong IPO. 
• Tuhu is an integrated online and offline platform for automotive services in China.
• We have looked at the firm’s past performance and PHIP updates in earlier notes. In this note, we undertake a peer comparison.

• In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in December 2023.
• There could be one ADD and one DELETE for HSTECH in December 2023 but I would treat them as low-conviction changes.
• At present, I see one-way flows for the December 2023 rebalance to be around US$250mn but as prices change, our index change and flow expectations will change too.

• Luckin Coffee is creating a stir with an unusual offering to capture the attention of Chinese coffee drinkers: lattes with a nip of Kweichow Moutai’s baijiu.
• The coffee chain partnered with China’s luxury liquor maker Kweichow Moutai to launch an alcohol-infused coffee drink, the so-called “sauce-flavored latte,” referring to the popular savory notes of Moutai liquors.
• The tie-up between Luckin and Moutai, the maker of China’s national liquor baijiu, triggered a buying frenzy. Discussions about whether it is safe to drive after consuming the alcohol-infused drink topped China’s social media Monday with 430 million views.

• SJM has lagged other sector peers in price recovery since the end of the Beijing zero covid ban policy last Janaury 6th.
• The company last year underwent a significant reordering of its business model which is not yet reflected in its ongoing momentum towards regaining positive EBITDA.
• Trading volume indicates ongoing interest but stock in our view has not yet reflected the continuation of positive sales growth leading to EBIDA turning positive in forward quarters.

• Chewy (CHWY US) reported a strong quarter but provided weak 3Q revenue guidance, pushing shares down over 10% on heavy volume during regular trading session.
• Chewy (CHWY US) shares massively underperformed in 2023, with shares down ~34% year-to-date vs a 16% gain on the S&P 500 index.
• In July, Chewy CFO Mario Marte stepped down after 8 years in the company. He sold ~$10M worth of Chewy shares in 2023.

• Macy’s delivered a positive result and managed an all-around beat last quarter, with notable achievements in net sales, gross margin rate, and SG&A rate.
• These outcomes were primarily driven by better-than-expected sales, gross margin results, and SG&A.
• Macy’s demonstrated effective inventory management strategies, resulting in reduced inventories compared to previous periods.

• Target Corporation delivered mixed results in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
• At the beginning of the quarter, Target started seeing softening sales trends.
• Comp trends softened in May and June and a meaningful recovery was seen in both comps and traffic in July.

• TJX delivered a positive result and managed an all-around beat in the last quarter.
• Marmaxx delivered high increases in both customer traffic and comp sales.
• The overall home sales improved significantly and returned to positive sales growth.

• Today, NTT (Nippon Telegraph & Telephone) (9432 JP) announced a partial offer to buy a minimum of 40.0% and a maximum of 51.0% of Intage Holdings (4326 JP). 
• Six crossholders holding 20.98% between them have separately agreed to tender a total of 19.9%. That means a minimum 25.4% minority participation. With success, minimum pro-ration is 51.5%. 
• The dynamics of this deal and where synergies lie suggests people need to think really hard about where they underwrite future illiquid ownership. 

• NTT (Nippon Telegraph & Telephone) (9432 JP) has announced a partial tender offer for Intage Holdings (4326 JP) to make it a consolidated subsidiary. 
• The offer is for a minimum of 15.4m shares (40.00% ownership ratio) and a maximum of 19.6m shares (51.00%) at JPY2,400 per share, a 26.4% premium to the undisturbed price.
• Irrevocables represent a 19.90% ownership ratio. The minimum acceptance condition requires a 20% minority acceptance rate. The offer is attractive and represents an all-time high.

• With shares trading near its all-time low since its listing on HKEX in 3Q19, we think it could be worthwhile taking another look at Budweiser Brewing APAC (1876 HK)’s valuation.
• China’s beer industry and regional markets are expected to sustain growth momentum in Q3, driven by tourism’s impact on increased beer consumption.
• We think it’s worth keeping an eye on Budweiser APAC, as we suspect that it could start to break out from the current downtrend in the near term.

• Agile Response to Visa Changes: NextEd’s nimble approach to the end of the COVID-19 408 visa showcases adaptability in uncertain times.
• Tech Sector Growth Potential: Expanding in the thriving tech field, NextEd taps into strong post-study work rights and sector support.
• Regulatory Challenges: Navigating regulatory shifts, NextEd’s resilience shines amid uncertainty in the non-university education landscape.

• Luckin Coffee’s new blockbuster Moutai Latte achieved 5.42mn cup sold with RMB100mn GMV in first day. 
• We think Luckin Coffee had effectively achieved two goals through the new premium product: 1) de facto price lifting; 2) extend potential customer base and step into the monetization stage.
• We raised our 2023 revenue and non-GAAP NI on Luckin by 1.6%/4.4%. We maintain the stock as BUY rating and raise TP by US$1 to US$44/ADS.

• Swatch Group enjoys a strong competitive position in the Swiss watch industry, with leading positions across all price segments
• Swatch Group’s 17 watch brands and 2 multi-brand retail companies demonstrate an incredible creativity and savoir-faire
• The stock is currently trading well below its 10-year historical P/E mean.

• Back on the 28th May, PRC department store play Golden Eagle (3308 HK) announced a privatisation offer, by way of a Scheme, at $6.88/share, a 40.41% premium to last close.
• The Offeror is the Wang family, who together with concert parties, held 80.29%. 7.18% of the 19.71% held by the disinterested stakeholders have given irrevocables in favour of the Scheme.
• Ahead of the Scheme Meeting on September 15th, a significant amount of shares have moved out of CCASS. This is not something to concern investors. 

• L’Occitane (973 HK) announced after market close yesterday that the controlling shareholder has terminated the potential general offer. 
• Shares trade at a significant discount to global cosmetics peers and its own historical trading range, while brands’ growth momentum remain intact. 
• Take advantage of any potential significant sell-down caused by the drop of the privatization attempt. 

• Positive retail flows, HNI & AIF inflows, along with global market trends, suggest that the uptrend for the NIFTY Index (NIFTY INDEX) may continue.
• Bullish stocks include Metro Brands (METROBRA IN) and Zydus Wellness (ZYWL IN), while the sentiment for Whirlpool of India (WHIRL IN) is Bearish.
• Highlighted global stocks include Ebix (EBIX US) , Smith (A.O.) (AOS US) and Apple (AAPL US) 

• Strong Q2 results out Tuesday morning beat consensus Revenue and core EPS estimates
• But concerns remain about expense control and longevity of ongoing demand recovery
• Great Q2 results, yes, but we think investors want more clarity about H2 demand

• A survey result supports that the fact that women temporarily leave the workplace due to childbirth or childcare is detrimental to their careers.
• Since there’re issues that require solutions not only for companies but for society, judicial decisions will encourage companies to make female employees subject to the same conditions as male employees.
• While more companies may take this ruling as an opportunity to consider conventional HR practices, since cases of employees going to court are rare, some companies may not act immediately.

• Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
• As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
• Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.

• Now that the September 2023 Nikkei 225 Rebal is announced, we look at the March 2024 rebal and its possibilities. 
• Socionext (6526 JP) is the only automatic ADD, but it might not be. ZOZO Inc (3092 JP) and Ryohin Keikaku (7453 JP) would be sector balance ADDs.
• Fast Retailing (9983 JP) could get capped if it outperforms Nikkei 225 by ~10%+ to 31Jan2024. And Nitori Holdings (9843 JP) will see an add of ~14 days of ADV.

• Despite expected increased demand from returning Asian tourists, Japanese cosmetics companies have been hesitant to revise their 2H 2023 inbound demand projections.
• We are long Kose Corp (4922 JP), Shiseido Company (4911 JP), and Pola Orbis Holdings (4927 JP), as consensus estimates look extra cautious and reasonable and appealing FY+2 valuation multiples.
• We view the risk of Chinese consumers boycotting Japanese cosmetics due to Fukushima wastewater release as relatively low.

• Seven & I has finally sold Sogo Seibu to Fortress Investments.
• It will be pleased to have offloaded a loss-making format it never really understood but at a cost – it will write off more than ¥90 billion in loans.
• Fortress will immediately sell the land under Seibu Ikebukuro and some other assets to Yodobashi with suggestions of major redevelopment of both Ikebukuro and Shibuya.

• Moncler SpA (MONC IM) is an outstanding compounder with clear market leading position in luxury outerwear.
• Moat is increasing every year through relentless focus on brand building. 
• We believe that Moncler deserves a higher PE multiple than its current 22x forward expected earnings.      

• The Estée Lauder Companies Inc. delivered a mixed set of results in the quarter, with revenues above market expectations.
• Estée Lauder produced a 4% rise in organic revenue, returning to growth for the quarter as predicted.
• Despite challenges, Estée Lauder Companies grew in the EMEA and Asia Pacific markets, compensating for the decline in organic sales.

• Ross Stores Inc. delivered a positive result and managed an all-around beat last quarter, with a 5% increase in comparable store sales primarily attributed to heightened customer traffic.
• Despite remaining cautious due to ongoing challenges in the economic landscape, Ross Stores raised its outlook for the second half of the year, indicating an upward trend in comparable store sales for the upcoming quarters.
• This resilient approach and the company’s strategic planning position Ross Stores for continued growth and success in the retail industry.

• Tapestry has been in the news for its $8.5 billion acquisition of Capri Holdings.
• Meanwhile, we delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
• Tapestry achieved remarkable and strategic progress, showcasing robust brand-building strategies, consumer-centric approaches, and effective execution, resulting in significant earnings per share.

• Walmart delivered a strong result and managed an all-around beat last quarter.
• The company continued gaining market share across various formats and markets, achieving positive growth in units sold and transaction counts.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• The September 2023 index changes for the ES50 index was confirmed after the close on Friday 1st September 2023.
• There will be two ADDs and two DELETEs. One set of changes was well anticipated by us. The other set comes as a major surprise to us.
• Collectively, the two ADDs could see ~US$2.4bn index flows and the two DELs could see ~US$2.9bn index flows, with US$500mm of reverse funding flows.

• The Brand-Spanking New (three weeks old) A-H Monitor has tables, charts, measures galore. 
• Last week was slightly disappointing but the Recommendations Outperformed the universe.
• New stimulus measures are partly supply side, and a little bit demand side, but they’re not big enough yet to move the needle. Mainland ETF buying smells like National Team.

• In this insight we analyze the drivers of a new relationship between SHEIN and Forever 21
• We think SHEIN agreed to the deal in part to become more “mainstream” in the US
• We also believe SHEIN takes seriously the legal and political risks it faces ahead of US IPO

• While it’s commendable that increasing numbers of companies are publishing skill matrices, there is not enough verification that the skill items are useful in expanding the value of the company.
• It is a prerequisite that the process of selecting skill items and the nominating committee that governs it are functioning and independent.
• Even if a governance framework and tools such as the skills matrix are introduced, whether they actually function depends largely on the quality of management.

• I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Quiet week – only one new deal: STG’s Offer for Energy One Ltd (EOL AU).
• Key updates took place for Costa Group Holdings (CGC AU), DDH1 (DDH AU), ENM Holdings (128 HK), and Penguin International (PBS SP).

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
• A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
• Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-August 2023.

• Back on the 2 June, small-cap fashion wear retailer ENM Holdings (128 HK) received a delisting Offer from major shareholder, Chinachem, at HK$0.58/share, in cash.
• The Scheme Doc is now out after thrice being delayed. The EGM/Court Meeting will be held on the 26 September with expected payment around the 14 November. 
• There’s a whiff of opportunism embedded in the Offer. But being loss-making and illiquid, I’d expect the vote to still get up.

• Vietnamese automaker Vinfast (VFS US) made its public debut on 15th August via a SPAC deal which valued the company approx. US$23bn.
• Shares opened US$22 per share and went up to $37.06 at the end of first-day. Share price hit a peak of $82.35, however, shares closed last at $34.71 per share.
• Our forecasts and valuation for Vinfast suggest that the company’s shares are still overvalued even after falling more than 50% from its peak over the last few days.

• ENM Holdings (128 HK)‘s scheme document is out, with the vote scheduled for 26 September. The IFA considers Chime Corporation’s HK$0.58 per share offer fair and reasonable.
• The spread of 7.4% reflects vote risk – cash required for the proposal is lower than the net cash, and the offer price is below the IFA’s SoTP valuation (HK$0.658). 
• Shareholder approval of the scheme is aided by no shareholder holding a blocking stake, a low AGM minority participation rate and no visible retail opposition to the offer. 

• China Mengniu Dairy Co (2319 HK) is a good pick for those seeking value in the China consumer sector. 
• The company currently trades at 15x 2024E PE, compared to over 20x forward PE in the last 5 years, as the industry growth stagnated. 
• We can still expect above 10% net profit growth over the next three years, with the company looking to return more cash to shareholders. 

• Herein we revise our estimates for Culp, which reported 1QFY24 results and issued guidance in the face of continued weak demand juxtaposed against improving and better-than-expected margins.
• Gross margin for CHF, Culp’s mattress fabrics segment, is recovering faster than expected (up ~700 bps in 1QFY24 versus 1QFY23).
• For CUF, Culp’s upholstery fabrics segment, management grew 1QFY24 gross margin by 667 bps despite a significantly down Y/Y sales comparison (~ -17.4%).

• It’s debatable whether to view the gradual increase in the percentage of female executives as a positive or a negative that it is so much lower than in other countries.
• This issue should be considered from the shareholder’s perspective, and the ratio of female board members should be increased if it is considered positive for the company’s management.
• While there are many things that companies should do to increase the ratio of female managers, there are also significant issues that society as a whole needs to address.

• Doms (DOMS IN) is looking to raise around US$140m (estimated) in its upcoming India IPO. The deal will be run by JM Financial, BNP, ICICI Securities and IIFL Securities.
• DOMS is a leading player and brand in India’s stationery and art products market. It designs,  manufactures, and sells a wide range of products, primarily under its flagship brand ‘DOMS’.
• Its core products such as pencils and mathematical instrument boxes had market shares of 29% and 30% by value in FY23, respectively, as per Technopak.

• JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) could be deleted as the lowest ranked current index constituents.
• There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
• Short interest has been increasing on JB Hi-Fi Ltd (JBH AU), Charter Hall (CHC AU) and Lendlease Group (LLC AU) and could be partially driven by potential index deletions.

• The electric-vehicle unit of defaulted property developer China Evergrande Group reported that in the first half of 2023 it delivered 760 cars and its net loss narrowed by almost half from a year earlier to 6.87 billion yuan ($942 million).
• China Evergrande New Energy Vehicle Group Ltd.’s revenue jumped more than fivefold to 155 million yuan, mainly from mass production and delivery of its flagship model, the Hengchi 5, starting last October.
• The electric-car company has been plagued by production delays and setbacks since touting its first Hengchi model as early as 2019 and pledging to rival Tesla within three to five years.

• Wynn Resorts delivered a positive result and managed an all-around beat in the last quarter.
• During the quarter, Wynn Las Vegas generated $224.1 million in adjusted property EBITDA on $578.1 million in operating revenue, resulting in an EBITDA margin of 38.8%.
• Additionally, Wynn Resorts had strong hotel occupancy and excellent tenant retail sales in July.

paragon continued its debt reduction programme in Q223 with the disposal of semvox. Operating performance progressed positively with H123 sales rising 7% and EBITDA margin in Q223 exceeding 10%, although the business mix shifted towards Mechanics as new contracts ramped up. Management has maintained FY23 guidance and we have modestly reduced our earnings estimates to reflect the mix change as well as higher interest in FY23. As the debt reduction programme continues into FY24 we expect lower interest charges and improving operational cash flows. Assuming the successful further partial redemption of the Eurobond by January 2024, investor focus should return to the growth potential.

• Sony Group Corporation delivered an all-around beat in the previous quarter.
• However, consolidated operating income fell because the Financial Services segment’s operating income fell.
• Software sales for the quarter increased mostly due to the launching of the enticing third-party software and increased PS5 penetration.

• The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat.
• The company made significant management adjustments and productivity enhancements to develop a more economical, coordinated, and streamlined approach to operations.
• Disney+ core subscribers increased during the quarter, with foreign growth more than balancing small domestic net losses.

• After Wednesday’s close, Culp Inc. reported a 1Q24 EPS loss of $0.27, beating our $0.36 loss estimate and its 1Q23 $0.47 LPS.

• Revenues missed expectations and residential demand challenged. The balance sheet remains strong.

• The Mattress Fabric (CHF) segment delivered a markedly improved margin, reporting a gross margin of 6.8%, up from negative 0.1% a year ago and better than our estimate of 2.6%.

• Honda Motor delivered a mixed result in the recent quarter, with revenues below market expectations, but surpassed the analyst consensus regarding earnings.
• Unit sales for Power Products operations fell to 5.645 million units, mostly because of a fall in North America.
• The supply conditions for semiconductors gradually improved throughout the quarter, which led to greater unit sales in the United States year over year.

• The Home Depot delivered a solid result and managed an all-around beat in the last quarter, with sales of $42.9 billion.
• Comp sales for the entire firm, as well as for the company’s US locations, fell in the quarter.
• The second quarter’s pro sales performance was slightly worse than the DIY customer’s performance.

• As part of our Narrative and Numbers themed Annual Report insights, we shift our focus to FSN E-Commerce Ventures (Nykaa) (NYKAA IN).
• We focus on Nykaa Fashion due to its financial significance in spite of not being a material subsidiary warranting the need for board review on materiality policy.
• Notable issues demanding scrutiny include (1) Declining Financials, (2) Inconsistent Reporting, (3) Misleading Narrative, and (4) Elevated Executive Compensation.

• PDD reported blowout 2Q results with bottom line beating consensus by 40% thanks to stronger domestic marketplaces business, narrower losses incurred by TEMU and higher other income.
• 2Q results cleared much of our concern around PDD’s bottom line growth and we now see 2Q as the low point of earnings growth in FY23.
• We believe the company will report $9 billion net profit for FY23 and expect rounds of earnings revision by the street will further lift share price. US $120 price target.

• Despite disclosing “improvement measures,” many companies have yet to see their stock prices rise sufficiently, which is one reason why an increasing number of companies announce enhanced shareholder returns.
• 2003 and 2013 were the starting point for monetary easing and excess liquidity helped raise P/B. Whether BOJ will head for the exit or continue easing is a major factor.
• Since this stock price rally was brought about by an increase in P/E multiples, further stock price appreciation will require continued profit growth, i.e., an increase in ROE.

• Organto reported Q2 financial results that missed our estimates on revenue but beat our estimates on gross margin and adjusted EBITDA.
• Yesterday evening, Organto Foods (OGO:TSXV) reported Q2/23 financial results that were softer than our expectations on revenue but beat our estimates on profitability metrics.
• Gross margin for the quarter came in at 9.0% compared to our estimate of 8.0% and 4.1% in Q2 last year.

• PDD reported CY2Q23 top-line and non-GAAP net profit 28% and 58% vs. our est., and 21% and 44% vs. cons., respectively. 
• We raised our 2H23 forecasts for PDD because: 1) GMV growth hasn’t been significantly impacted by the current competitive landscape; 2) take rate could maintain a high level due to 
• Continuous optimization of ad products; and 3) new businesses such as Temu and Kuaituantuan (快团团) have fair growth. We maintain BUY and raise our TP to US$ 107.

• Shareholders of Prosus NV (PRX NA) and Naspers (NPN SJ) approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers’ Share Consolidation to move forward.
• What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.
• Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. 

• The Hang Seng announces changes along with prospective flows 2wks before the actual change. Capping flows are calculated off the close three days before implementation. That was today.
• There have been some minor movements in the rankings. Nothing major. There is still just over US$1bn to trade, one-way.
• Enclosed are totals for each of the three major indices (Hang Seng, HSCEI, and HS Tech) and then netted flows. The biggest is US$470mm of BABA to sell. Spreadsheet attached.

• PDD’s revenue increased by 66% YoY to RMB52 bn, significantly higher than the market consensus RMB43 bn.
• The operating margin declined to 24% in 2Q23 from 28% in 2Q22 due to aggressive expansion outside China.
• We believe the stock still has an upside of 47% for year end 2023. Buy.

• During the initial months of 2QFY24, both Tokyo Disneyland and Tokyo DisneySea experienced a significant double-digit QoQ drop in Google search interest.
• Using Google Search trends data for the first two months of 2QFY24, we anticipate a QoQ decline of about 17% in Oriental Land’s Theme Parks revenue, dropping below ¥100bn.
• 2QFY24 consensus OP is 2.5x above the company’s guidance, and both short and medium term consensus revenue and OP targets for Oriental Land (4661 JP) appear blatantly unachievable.

• Chongqing Hongjiu Fruit (6689 HK) was listed on 5th Sep 2022, where it raised around US$71m in its Hong Kong IPO. Its one-year lockup will expire on 4th Sep 2023. 
• Chongqing Hongjiu Fruit (CHJF) is a multi-brand fresh fruit distributor in China with an end-to-end supply chain. As per CIC, it was the largest fruit distributor by revenue in 2022. 
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Ultrajaya Milk (ULTJ IJ) remains a core proxy for the under-penetration of dairy products in Indonesia, which stands at less than half of Thailand in terms of per capita consumption.
• Ultrajaya has seen a strong rebound in sales this year for its UHT milk sales but material pressure persisted in 1H2023 but will abate in 2H2023 improving margins.  
• Its carton tea products are seeing a strong rebound and a new distribution warehouse in Cikarang will improve distribution. Ultrajaya‘s growth trajectory is resuming and valuations are attractive. 

• Wuliangye Yibin Co Ltd A (000858 CH), the second largest Chinese liquor company in China, trades at one of the lowest PE multiples in the space. 
• Kweichow Moutai (600519 CH), the largest Chinese liquor company trades at 26x 2024 expected earnings, and most other listed Chinese liquor names trade above 20x 2024 expected earnings.
• Upon closer look, Wuliangye is actually a classic case of value trap – slow growth with no change or slowly deteriorating PE multiples. 

• The company is the most geographically diverse operator in the global gaming space. It has been something of a post-covid laggard relative to sector peers.
• Return to modern profit largely comes from Malaysia Highlands flagship.
• Big unnoticed catalyst could be its key position in the bidding wars for three new licenses to be awarded in metro New York. Genting active there since 2011.

• Yerbaé reported strong Q2 financials that were in line with our estimates on sales ($4.1M) and beat our expectations for gross margins (56%).
• Yesterday, Yerbaé Brands Corp. (YERB.U:TSXV, YERBF:OTC) reported Q2/23 financial results that were in line with our estimates for net revenue and beat our estimates for gross margin.
• Gross revenue came in at $4.3M vs. our estimate of $4.5M with the promotional rate at 4% compared to our estimate of 7%.