Consumer

• Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.
• The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, intends to vote NO. 
• Aeon Co Ltd (8267 JP)’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.   

• Shandong Fengxiang (9977 HK) has disclosed a preconditional privatisation offer from PAG, the controlling shareholder, at HK$2.00 per H share, a 33.3% premium to the undisturbed price.  
• The precondition relates to regulatory approvals. The key conditions for the privatisation will be approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). 
• The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a potential scrip alternative. 

• The key is whether the effectiveness of special committee can fairly guide MBO, but whether the independent outside directors are truly independent, properly informed, and skilled is an important assumption.
• Since companies with high foreign shareholdings generally have higher corporate governance practices, there are concerns about practices in MBO cases for many companies that do not have high foreign shareholdings.
• When a company whose “goal is IPO” conducts MBO when the stock price is lower than at IPO, there are concerns about whether the special committee will guide MBO fairly.

• Chinese Tea Company is moving ahead with the IPO despite heavy Macro-Economic winds.
• The company is seeking up to $412m with a high-end pricing and already includes $205m worth of buying on the cover of the prospectus.
• There are. more questions than answers regarding this IPO due to the current uncertainty in the market. 

• Chagee Holdings (CHA US)  is looking to raise up to US$411m in its upcoming US IPO.
• It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
• We have looked at the company’s past performance and provided our initial thoughts on valuations. In this note, we talk about the IPO pricing.

• Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
• It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki’s share performance is the joint best among recent large placements.
• However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.

• Harley-Davidson is navigating a critical crossroads as it searches for a new CEO to replace Jochen Zeitz, who recently announced plans to retire after five years at the helm.
• This leadership transition comes at a precarious time for the iconic motorcycle brand, which is grappling with a sustained decline in sales, intensifying macroeconomic pressures, and the looming threat of retaliatory tariffs—particularly from the European Union.
• In 2024, global retail sales dropped by 7%, with international sales falling a steep 13%, reflecting a broader downturn in discretionary spending.

• Capri Holdings’ sale of Versace to Prada removes a structurally weak asset, shifting its balance sheet from net debt to net cash, simplifying its brand portfolio for sharper strategic focus.
• Post-Transaction, Capri trades at just 4.4x EBITDA despite becoming a leaner, debt-free luxury group with two globally recognized brands — a setup primed for significant multiple expansion and investor re-rating.
• A sum-of-the-parts valuation excluding Versace suggests Capri’s fair value is $30–33 per share, offering investors over 100% upside as the company pivots from portfolio fixer-upper to focused luxury contender.

• Compass Group PLC has released its full-year 2024 financial results, showcasing a strong performance with a 16% increase in operating profit and an 11% growth in organic revenue.
• The company reported a margin progression of 30 basis points, taking it to 7.1%.
• This has been complemented by a net new business growth of 4.2%, further gaining momentum in the second half of the year.

• Consolidated sales reached JPY205.0bn (+9.3% YoY), with operating profit at JPY7.3bn (-8.4% YoY) and net income JPY3.8bn (-32.1% YoY).
• The company forecasts FY02/26 sales at JPY225.0bn (+9.8% YoY), with operating profit expected to rise 1.3% YoY.
• The company achieved JPY187.5bn sales in FY02/24, surpassing its JPY180.0bn target, due to agile menu price revisions.

• Mark Chadwick highlighted Fast Retailing (9983 JP) ‘s outlook in 2 recent insights, before and after Q2 earnings: his DCF model for this stock suggests roughly a +13% upside.
• This week the stock rallied from the crash at the start of the week, closing a bit higher than the previous week (it had closed 1 week down, CC=-1).
• Assuming the stock may rally further from here, pushed by good Q2 results, let’s have a look to our model to analyze some profit targets.

• Levi Strauss & Co. reported strong first-quarter fiscal 2025 results, exhibiting growth across key financial metrics amidst a challenging macroeconomic environment.
• The company’s strategic shift towards a Direct-to-Consumer (DTC) model has begun to bear fruit, as evidenced by a 9% increase in organic net revenue, primarily driven by a 12% rise in DTC sales.
• These results showcase the impact of successful new store openings, positive comparable growth, and robust e-commerce performance.

• FY02/25 sales increased by 6.7% YoY, with operating profit up 21.2% YoY, but recurring profit declined 23.4% YoY.
• FY02/26 forecasts sales of JPY92.2bn (+5.7% YoY), operating profit of JPY7.3bn (+68.0% YoY), and net income of JPY2.5bn.
• The company plans to open new facility formats and expand in regional cities, focusing on profitability and efficiency.

• Strong Q2 beat: Revenue rose 14% YoY and OP jumped 33%, driven by Japan strength and solid winter sales, offsetting China’s continued weakness.
• Guidance tweak: FY business profit raised to ¥540bn, though H2 expectations effectively lowered due to anticipated US tariff impact.
• US expansion continues: 69 stores now open; North America accounts for 7.5% of sales, with future margin mitigation via supply chain shifts and EU/Asia growth.

• Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
• While Suzuki doesn’t have much direct exposure to the US markets, its shares had corrected in line with other auto players going into the deal launch.
• In this note, we compare the deal to some of the past deals and talk about the updates since our last note.

• Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
• The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive. 
• The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.

• On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held. 
• The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
• The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.

• Our base case valuation of Chagee Holdings is target price of $46.7 per share, representing 67% higher than the high end of the IPO price range ($28 per share). 
• Our base case valuation is based on a P/E of 21.4x on our estimated net profit of 2.9 billion RMB in 2025. 
• We used a very conservative valuation multiple, mainly due to the extremely high macro risks related to the ongoing tariff dispute between China and the United States.

•  Components crossing US–Mexico–Canada corridor face disruption  
•  Reshoring production to US would involve multi-year lead times  
• USTMA expects U.S. tire shipments of 340.4 million units in 2025

• BYD reported C1Q25 net profit up 86%-119% YoY, with the midpoint exceeds our estimate/consensus by 12%/20%.
• We believe this driven by better ASP mix of its products, among other factors;
• We believe a possible China-EU deal on EV market access can be positive for BYD. We raise the TP to HK$400 and place BYD back to TOB BUY.

• Sonos, a prominent player in the home audio industry, recently shared its financial performance for the first fiscal quarter of 2025.
• The interim CEO, Tom Conrad, highlighted several strategic changes and challenges faced by the company.
• These insights provide a nuanced basis for evaluating the company’s future investment potential.

• Lifeway Foods (LWAY) faces a pending takeover by Danone, with a potential board overhaul and strategic acquisition synergies.
• Liquidia (LQDA) anticipates FDA approval for Yutrepia, challenging UTHR’s monopoly, with potential valuation gap closure post-commercialization.
• Sage Therapeutics (SAGE) received a buyout offer from Biogen, with ongoing strategic review and potential for increased offer price.

• Grocery Outlet recently held its fourth quarter and full-year 2024 earnings call, highlighting several key outcomes and strategic initiatives.
• The performance in Q4 showed a net sales increase of 10.9%, reaching $1.1 billion, with comparable store sales climbing 2.9%.
• This growth was primarily driven by a 3% rise in customer visits, although the average basket size remained flat.

• Today, Seven & I Holdings (3382 JP) reported full-year earnings. The FY2025 guidance looks OK. Not overly exciting. Optically, it falls short, but 7&i guidance includes York only for H1. 
• The basic outlines of strategy in the Presentation are unchanged from the 6 March strategy report. The company seems convinced an IPO of SEI is a good thing. I’m underwhelmed.
• The company also announced that it would bring forward ¥600bn of its planned 6-year ¥2trln buyback program, and execute it this year. That’s good. 

• June rebalance drops mid-May, goes live post-KOSPI 200 expiry. Back to 100 names—net outflow setup with more deletes than adds. ETFs rebalance into June 12 close.
• KRX confirmed 10 special entries for June; results likely out in May with Value-Up rebalance. 12 protected names stay. Stocks over 10% weight, like Samsung and SK Hynix, remain.
• Value-Up disclosure isn’t mandatory yet—rule starts June 2026. But compliant firms get a screening boost. Around 76 spots remain, filled via quant screen after excluding 24 protected names.

• Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
• Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
• There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.

• LG Electronics India (123D IN)/LGEIL, a subsidiary of LG Electronics (066570 KS), aims to raise up to US$1.5 billion through a secondary offering (15% of outstanding shares). 
• According to Redseer, as of 30 June 2024, LGEIL was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume.
• The bull case rests on a strong market position, solid revenue growth, top-tier operating and FCF margin profile. 

• US tariffs could sharply cut Shimano’s H2 operating profit by up to 57%, despite limited direct exposure, due to opaque supply chains via China and Taiwan.
• Valuation would look stretched at 25x EV/EBIT versus historical 20x, if earnings fall short of current guidance.
• Shimano’s ¥530bn net cash pile offers room to boost shareholder returns through buybacks or dividends.

• The NIFTY Index (NIFTY INDEX) post-crash bounce peaked around 4.4% before stalling—mirroring the fading rebounds seen across global indices.
• The index has yet to reach levels attractive for shorting, but with two days remaining before the weekend, any positive tariff-related news will push the index towards the targets.
• This insight highlights key price levels for initiating tactical shorts or exiting longs, depending on the tariffs scenario that, once again, changed dramatically from one day to the next.

• Somnigroup Group International, formerly known as Tempur Sealy International, has undergone a significant transformation with the completion of the merger with Mattress Firm, officially operating under the new name Somnigroup Group International.
• This merger creates a global sleep solutions provider encompassing well recognized brands such as Tempur Sealy, Dreams, and Mattress Firm, each operating under their brand names within a decentralized framework.
• The financial results of Mattress Firm will be included in the forthcoming quarters.

• Tesla is facing one of its most turbulent periods in recent memory.
• In just the past few weeks, the electric vehicle giant reported its worst quarterly deliveries since 2022, saw its stock fall over 44% from its December peak, and lost one of its top software executives.
• Tesla’s Q1 2025 vehicle deliveries came in significantly below expectations at 336,681 units, triggering a wave of analyst downgrades, with JPMorgan citing “unprecedented brand damage” as a key factor.

• Conagra Brands recently reported its third-quarter fiscal 2025 financial results.
• A nuanced analysis reveals both strengths and challenges the company is navigating in a dynamic macroeconomic environment.
• On the positive side, Conagra Brands highlighted robust consumer demand for its products.

• Until last year, Trial was a Kyushu-based discount FMCG retailer, that had just completed its IPO. 
• Today, it is one of the largest FMCG retailers in the country having won the bidding to acquire Seiyu from foster care under KKR.
• This is a massive development that will pressure other rivals to step up in order to compete.

• LG Electronics (066570 KS) is looking to raise US$1.5bn+ via part-selling its stake in LG Electronics India.
• LG Electronics India (LGEI) was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume in 1Q25, as per Redseer Report.
• We have looked at the company’s past performance in our previous note. In this note, we undertake a peer comparison.

• Chagee Holdings (CHA US)  is planning to raise up to US$500m through its upcoming US IPO.
• It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
• We have looked at the company’s past performance in our earlier notes. In this note, we discuss latest industry dynamics, conduct a quick peer comparison and discuss the company’s valuation.

• Frontdoor’s financial performance in the third quarter of 2024 reflects both achievements and challenges for the company as it navigates a fluctuating market environment.
• The company reported a 3% increase in revenue to $540 million compared to the same period last year, alongside a notable rise in gross profit margin by 550 basis points to reach 57%.
• Net income saw a substantial uptick of 40% to $100 million, while Adjusted EBITDA increased by 29% to $165 million.

• Japan’s declining % global GDP and the number of top companies in market capitalization shows that simply boosting profits through yen depreciation left behind the growth speed of global competitors.
• While many Japanese companies tried to improve profit margins by reducing labor costs and other expenses, few have managed to improve gross profit margins, which relate to their business models.
• The fact that few companies have taken steps to shift to higher value-added products and services is why the yen rate remains a key factor in stock valuations.

• Cable One’s recent earnings presented a mixed set of financial results for its fourth quarter and full-year 2024.
• The company, while navigating competitive pressures and changes in subscriber programs, managed to demonstrate some resilience in strategies aimed at stabilizing its business.
• On the positive side, Cable One reported growth in its business broadband revenue by 2.6% year-over-year, driven by rising demand across its carrier, enterprise, and wholesale segments.

• GameStop Corporation reported its fourth-quarter and full-year financial results for 2022 with a noticeable shift toward profitability and efficient operations amidst a challenging retail environment.
• The company’s transformation over the past couple of years has been a story of significant restructuring and strategic shifts aimed at revitalizing its financial health and market positioning.
• A notable positive from the results is GameStop’s turnaround from a net loss in the fourth quarter of 2021 to a net income of $48.2 million in the same period of 2022.

• Lululemon Athletica Inc. recently reported its fourth-quarter and full-year financial results, marking another year of growth, while also spotlighting both achievements and challenges.
• The company reported total revenue for the fourth quarter, excluding the 53rd week, increased by 8% year-over-year, or 9% on a constant currency basis.
• Operating margin expanded by 40 basis points to 28.9%, and earnings per share rose by 16%.

• PVH Corp’s recent earnings reflects a mix of achievements and challenges in the fiscal year 2024 and sets cautious expectations for 2025.
• The company, which owns iconic brands Calvin Klein and Tommy Hilfiger, surpassed its initial 2024 guidance both in terms of revenue and non-GAAP EPS.
• However, it faced a decrease in overall revenue compared to previous years, largely attributed to divestitures and external economic factors.

• In this edition: • InPost | Royal Mail to roll out lockers at Sainsbury’s in the UK • Acomo | presents growth and financial strategy at CMD

• McCormick & Company recently presented their results for the first quarter of 2025.
• The report indicated mixed outcomes, with organic sales showing modest growth and some challenges in profitability.
• The company’s total organic sales grew by 2%, primarily driven by volume and product mix growth.

• Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
• While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
• Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).

• The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) was less impacted than other indices by the global sell-off: on Monday it was down only -10% from the recent top.
• On Monday Donald Trump posted that if China does not withdraw immediately its +34% tariffs increase, the United States will impose ADDITIONAL Tariffs on China of +50%, effective April 9th!
• Although the CSI 300 Index is more insulated than other indices from global market volatility, it is not completely immune and remains vulnerable to the impact of US’s tariff threats.

• Chagee is the No. 6 largest teahouse chain in China according to store number.
• Very few teahouses have a per customer transaction higher than Chagee.
• We believe Chagee has advantages in the high price market.

• Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to offload their entire stakes in Suzuki Motor (7269 JP) by way of a secondary offering.
• With the size of the secondary offering less than 5% of the number of shares, there could be no index buying in the short-term and that will pressure the stock.
• If the overallotment option is exercised and the seller of the shares is currently considered as non-float, there could be small passive buying in the short-term.

• GoTo Gojek Tokopedia‘s 4Q2024 is likely just the start of the positive impact of its barbell strategy of enticing new users through affordable products before monetising through premium offerings.
• The rapid turnaround of the fintech business as it booked its first quarterly positive adjusted EBITDA was a key standout and was front and centre of management results comments.
• GOTO remains upbeat in its prospects for 2025, providing its first guidance for adjusted EBITDA, and highlighting the positive contribution from fintech and mid-teens growth for ODS. 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Tata Motors
• In the US, the March nonfarm payrolls unexpectedly increased to 228 k (140 k e / 117 k revised p), albeit the February figure was revised downwards to 117 k (from 151 k). The unemployment rate edged up to 4.2% (4.1% e / 4.1% p).
• Average hourly earnings came in at 0.3% m-o-m (0.3% e / 0.2% revised p) and 3.8% y-o-y (4.0% e / 4.0% p).

• Dixon Technologies India Ltd (DIXON IN), Metropolis Healthcare Limited (METROHL IN), Hitachi Energy India (POWERIND IN) have shared major updates on expansion plans, acquisitions, order growth, and strategic shifts across sectors.
• Each company is taking strategic steps to expand market share, strengthen operations, and tap into emerging growth sectors.
• These updates highlight diverse growth strategies, from Dixon’s manufacturing expansion to Apollo’s focus on defense, suggesting a balanced approach across market leaders.

• Last week, I had the great pleasure of meeting with Chief Financial Officer Amrit Shrestha and several of his colleagues at Coca-Cola bottler Haad Thip (HTC TB – US$193 million).
• The company is the exclusive producer and distributor of Coca-Cola products across Thailand’s 14 Southernmost provinces.
• The stock has performed beautifully over time, though sideways since 2021. It trades at a 9.6x P/E ratio and a 6.4% dividend yield.

• PAGCOR forecasts a strong FY25 industry GGR of 450 bn pesos (20% YoY), of which the share of bingo/casino games is expected to be 50% (~225 bn pesos).
• If DigiPlus Interactive (PLUS PM)  maintains a share of 45% (vs last year’s 47%), revenue will increase by 33% to 100 bn pesos. 
• With the recent correction due to the current geopolitical situation, the stock trades at 12.2x/9.5x FY24/FY25e, 35% ROCE, with multiple catalysts, e.g, a great Q1FY25 and expansion in Brazil.

• Given its portfolio mix, Treasury Wine Estates (TWE AU) does not expect a material impact on its business from the blanket 10% tariff on all goods imported from Australia/New Zealand.
• However, there is a high probability that Treasury Wine Estates (TWE AU) will be deleted from a global index in May and that will lead to large selling from passives.
• There has been an increase in short interest and an increase in other positioning. Trading will be volatile but there could be a downward bias over the next few weeks.

• 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: Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), ENN Energy (2688 HK), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US), Soundwill Holdings (878 HK). 
• Lowest spreads: Sinarmas Land (SML SP), Makino Milling Machine Co (6135 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Tonami Holdings (9070 JP). 

• Komeri plans to expand their addressable market by 75% and to double their current market share to 21%.
• Same store sales of the company’s Pro Stores rose an average of more than 7% in the past 8 quarters, and selling area is expanding at more than 25% annually.
• Yet Komeri trades at just 11x earnings, compared to about 16x for Topix and 18x for the median retail stock.

• Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
• In Chagee Holdings (CHA US) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on unsustainable growth rates, pressure on KPIs, signs of margin pressure, increasing S&M expenses and weakening forward growth indicators.

• Tariff introductions in Vietnam were 46%, PRC 34%, Bangladesh 37%, Indonesia 32%, etc, have rocked the textile complex, and share prices have reacted negatively. 
• The companies with the maximum revenue exposure to the US market are Stella International (1836 HK), with 47%, Crystal International (2232 HK), with 38%, and Lever Style (1346 HK), with 58%.
• We anticipate that the negative sentiment will continue to hinder the sector until a reasonable negotiation occurs. In the meantime, there are no beneficiaries in this trade war.

• 2024 results is significantly below expectations. While revenue had negative growth, SG&A expenses remain high.Coupled with net fair value losses after tax on investment properties, we saw ugly net profit.
• As consumer confidence won’t improve in short term, coupled with competition/corporate strategy lag, we adjusted next three-year growth based on 2024 results. This may increase the success rate of privatization.
• Reasonable valuation of Goldlion is 9-14x P/E due to short-term headwinds.If performance picks up due to effective expansion in online channels or popular products launched, P/E may improve to 12-15x.

• Eliminating income limits on child allowances seems to be the right policy because the wealthier families have more children. However, it lacks viewpoints toward the growing number of unmarried people.
• It seems effective to solve the problem of the growing income disparity and the child-rearing/housework being disproportionately placed on women, and taking appropriate measures for those who desire diverse lifestyles.
• Policies don’t reach the ever-increasing number of singles. Rather than solutions to declining birthrate, priority is given to policies that distribute money to those who are more certain to vote.

• 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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO and Chagee Holdings (CHA US) seeks to raise US$400-500 million through a Nasdaq IPO.
• Event-Driven developments: Skyworth Group Limited (751 HK), HKBN Ltd (1310 HK), Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Domain Holdings Australia (DHG AU), Dropsuite Ltd (DSE AU). 

• Marriott Vacations Worldwide reported solid results for the fourth quarter of 2024, underpinned by strong leisure travel demand and strategic adjustments in sales and marketing approaches.
• The company has successfully expanded its sales channels and promotional strategies, leading to a 7% year-over-year increase in contract sales, with first-time buyer sales growing faster.
• This results from innovative initiatives like virtual tours and sales channels such as roadshows and owner cruises.

• The US imposed a 25% tariff on auto imports, affecting Tata Motors’ JLR unit, where the US accounts for 22% of sales.
• This could shave off 200–300 bps from JLR’s EBITDA margin or weaken US volumes if costs are passed on to consumers.  
• Tata Motors’ FY25 EBIT margin guidance of ≥8.5% looks ambitious; a realistic range may shift to 6.5–7.5% without swift demand or cost-side offsets.

• Steven Madden, Ltd. reported solid financial results for the full year 2024, with revenue increasing 15.2% year over-year to $2.3 billion and diluted earnings per share rising 9% to $2.67.
• The company emphasized four key business drivers: international expansion, category diversification beyond footwear, growth in direct-to-consumer (DTC) channels, and reinforcement of its U.S. wholesale footwear business.
• International revenue rose 12%, with notable growth in the EMEA region (18%), including Europe, the Middle East, and South Africa.

• Reynolds Consumer Products, Inc. reported its financial performance for the fourth quarter and full year of 2024.
• The company experienced a modest volumetric growth of 1% in the fourth quarter across its business units, which include Reynolds Cooking & Baking, Hefty Waste & Storage, Presto, and Hefty Tableware.
• Despite navigating a challenging market environment, the company achieved its strongest profitability since the COVID 19 surge in 2020, highlighted by expanded margins and earnings surpassing initial projections.

• 70% of Tokyo market is traded by overseas investors, so even companies with smaller market capitalization need to catch the attention of overseas investors by increasing their return on capital.
• It is possible that the difference in stock valuations over the past few years has been due to a greater difference in return on capital between large-cap and small-cap stocks.
• Skillful IR alone is not enough to raise stock price valuations. The IR department must have management who can execute management strategies and personnel who can formulate persuasive plans.

• Century Communities reported a record-breaking performance for both the fourth quarter and full year 2024, highlighted by increased deliveries and community expansion.
• The company delivered 11,007 homes in 2024, a 15% increase year-over-year, and expanded its community count by 28% to 322.
• This growth was robust despite fluctuating mortgage rates, which were offset by strategic incentives to drive sales.

• Dorman Products, Inc. reported its fourth quarter and 2024 fiscal year results, showing robust growth and strategic alignment.
• The company surpassed the $2 billion annual sales mark for the first time, with net sales for the year growing by 4.1% year-over-year.
• The growth was largely driven by strong demand and new product introductions in the Light Duty segment, despite market pressures affecting other segments.

• We are reiterating our Buy rating, $23 price target, lowering our FY26 EPS projections and rolling out a somewhat belated return to EPS growth in FY27 after the company announced solid 4QFY25 (January) results, with top and bottom line upside driven by rag and bone and European results.
• With management focused on returning domestic stores to positive comps (via closures and upgrades) and continuing to fund growth opportunities for rag and bone, Guess Jeans and international, we expect FY26 to set the stage for FY27 (and beyond) top and bottom line growth.
• Further, with Guess?’ highly material international operations and licensed businesses, we believe tariffs are not as material an issue as investors perceive.

• LGI Homes, a leader in the homebuilding sector focusing on entry-level housing, presented mixed results for the fourth quarter of 2024.
• The year was marked by heightened economic challenges, arising primarily from an unexpected rise in mortgage rates following the Federal Reserve’s policy adjustments, which exacerbated affordability issues and increased input costs due to inflation.
• On the positive side, LGI Homes met several strategic goals for 2024.

• Albertsons Companies’ third quarter 2024 results showcase a strategically mixed performance with several growth initiatives balanced by ongoing challenges.
• Despite the termination of the merger, the company continues to execute its Customers for Life strategy, focusing on digital transformation, customer loyalty, and enhancing the overall value proposition.
• Financially, Albertsons reported a 2% increase in identical sales, driven notably by a 13% rise in pharmacy sales and 23% growth in digital sales.

• PepsiCo, once a formidable rival to Coca-Cola in the global soda market, is now facing one of its most challenging periods in decades.
• Its flagship cola brand recently slipped to the No. 3 position in the U.S., behind Coca-Cola and Dr Pepper, highlighting the severity of the erosion in its core beverage business.
• Ram Krishnan, the CEO of PepsiCo Beverages North America, is spearheading a turnaround mission with aggressive in-store visits, a refreshed marketing strategy, and operational restructuring.

• For weeks, if not months, the world has been wondering what the “reciprocal tariffs” would be, and what the logic would be behind them.
• There is talk of VAT, and NTBs, and huge tariff step-ups after quotas are exceeded (US exports of milk and cheese to Canada – high tariffs, but quotas not exceeded).
• But a quick check of the math on the Trump Executive Order and Annex I tells you the logic is different than what everyone expected. 

• Dream International (1126 HK) posted strong results, with revenues up 2% and profits down 11% YoY, demonstrating effective cost control in a challenging competitive environment.
• Net cash on the balance sheet ended at 1.52 bn HKD (vs 1.35 bn), representing 33% of market capitalization. The company rewarded shareholders with 60 cents of dividend (~8.9% yield). 
• Trading at 6x/3x PE/EV-EBITDA FY24, with an 8.9% dividend yield and an average 10-year ROCE of 20%, the stock is worth exploring from here. 

• Back on the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
• JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a definitive agreement entered into.
• The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.

• Chagee Holdings (CHA US) is getting ready to complete its IPO on NASDAQ in the next several weeks. Chagee is one of the largest premium tea chains in China. 
• The company’s sales and profits have been exploding higher in the past three years. Its sales jumped from 0.5 billion RMB in 2022 to 12.4 billion RMB in 2024. 
• Chagee could raise more than $500 million in this IPO. However, this is subject to change. 

• The profit outlook for many Japanese companies may not be good enough for overseas investors, who are selecting the best investments from among stocks around the world.
• In FY2025, both sales and recurring profit are expected to slow in the manufacturing sector. This casts a shadow over TSE stock prices, which are dominated by manufacturing companies.
• Companies whose corporate performance are at a standstill has good opportunity to show investors how it will use the proceeds from the sale of cross-held shares to expand corporate value.

• Back in January, New Zealand’s largest private sector union called for the government to step in after NZME Limited (NZM AU/NZ), publisher of the NZ Herald, announced sweeping job cuts, 
• After a flurry of rumours, James Grenon, a Canadian-born but New Zealand-based investor, has proposed sacking the board. Allegedly 37% of shares out, including Genon’s stake, support the board spill.
• The AGM has been pushed out to the 3 June. In a detailed PPT, NZME questions whether Grenon’s motives are in the best interest of the company and its shareholders. 

• American Express Global Business Travel reported strong financial performance for the fourth quarter and full year of 2024, showcasing a record year for adjusted EBITDA and revenue.
• The company exceeded the midpoint of its guidance range, with adjusted EBITDA rising by 26% year-over-year.
• These results were driven by growth in technology-enabled productivity, a scalable cost base, and robust free cash flow generation.

• Spectrum Brands Holdings, Inc. had a mixed first quarter of fiscal year 2025, as revealed in their recent financial results.
• The company experienced a modest increase in net sales, driven by strategic investments and several successful initiatives across its business segments.
• Net sales grew by 1.2% overall, with organic sales, excluding unfavorable foreign exchange impacts, rising by 1.9%.

• Coursera’s latest quarterly and full-year earnings report highlights a complex picture characterized by noteworthy achievements as well as certain challenges.
• Revenue for the fourth quarter of 2024 reached $179 million, marking a 6% increase from the previous year across all operational segments.
• Full-year revenue stood at $695 million, up 9% year-over-year, alongside significant profitability improvements, exemplified by a 750 basis point increase in annual adjusted EBITDA margin and over $59 million in free cash flow.

Refocusing a business takes time, especially when it involves replacing legacy systems, renegotiating framework agreements, integrating numerous acquisitions and rebuilding the balance sheet. The process becomes even more challenging if it coincides with weak market conditions and a significant level of geopolitical uncertainty. Dustin Group’s management is actively addressing these challenges, including a rights issue announced with its results. The business is well positioned, leaving investors with one key question: when is the right time to buy? We believe the next six months may provide the answer.