Daily Briefs

• Golden Eagle Retail (3308 HK)‘s scheme document is out, with the court meeting scheduled for 15 September. The IFA considers the HK$6.88 per share offer fair and reasonable. 
• The key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The shareholder with a blocking stake has provided an irrevocable.
• This is a done deal which help by the material derating of peers. At the current price of HK$6.75 and for the 17 October payment, the gross/annualised spread is 1.9%/13.4%.

• Holistic Educational Suite: 3PL enriched its product portfolio, with the APAC debut of WritingLegends and BrightPath Assessement. 
• Steady Financial Growth: Amidst challenges in the UK, 3PL’s 9% ARPU growth highlights its consistent performance and market strength. 
• Setting the Pace: With attractive-priced offerings, an integrated product approach, and an innovative teacher training vision, 3PL is expected to continue growing its top line as more schools join. 

• Anta Sports Products (2020 HK) reported a set of resilient earnings in 1H23, with net profit up 32% yoy.
• Management reconfirmed 2023 guidance for Fila and Anta at double-digit retail sales growth, and increased 2023 guidance for other brands to 40% yoy compared to 30% before. 
• Anta’s sales growth has been the most resilient in previous industry down-turns in China.  China macro worries should not be overly read through to Anta’s future results.

H&H International’s H1/23 results were stronger than expected. The company managed to deliver y-o-y growth of 17% in total revenue to CNY 7 bn, driven by an optimised product mix with strong growth (above 40%) in nutrition supplements across all product categories. As a result, revenue from nutrition supplements further expanded to account for 60.1% of total revenue (H1/22: 49%). The top-line increase was boosted by double-digit expansion across all regional markets, in Mainland China (H1/23: +15.4%), Australia & New Zealand (ANZ; +19.4%), North America (+20.9%) and other territories (+13.7%).

Problems in baby nutrition & care (BNC) persisted, with revenue down 2% y-o-y in H1/23. IMF sales dropped 10% in Mainland China and fell 55% in ANZ, in line with our expectations. We expect adult nutrition & care (ANC) and pet nutrition & care (PNC) to continue being H&H’s key growth segments, while BNC should remain challenging.

That said, we believe H&H faces very limited short-term repayment risk, with 1.4x LTM Cash/ST Debt as at end-June 2023. The company had CNY 2.1 bn in cash, compared to c. USD 210 mn in repayment needs over the next 12 months. Liquidity could also be supported by enhanced working capital efficiency, which would lead to stronger operating cash flow.

Our Credit Bias on H&H is “Stable”, given the company’s solid business fundamentals, strong market positions and moderate financial profile. The BTSDF notes are trading at c. 94.5, yielding 10-16%. We view the notes as fairly priced, and maintain our “Hold” recommendation.

• C2Q23 revenue (1.9%)/2.6% vs. our estimate/consensus, its non-GAAP NI is 18.5%/18.3% higher than estimate/consensus. 1) GPM improvement from revenue mix ; 2) less than expected OPEX from IP licensing fee. 
• We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for-money, which bodes well for its long-term brand value. 
• We maintain Buy rating and maintain TP at US$26. We raise 2024 EPADS by 6.4% to project lower OPEX with efficiency improvement.

Borussia Dortmund’s headline (income statement) results for FY23 were ahead of management’s previous guidance and our estimates. The company enjoyed a year of recovery following the disruption of COVID-19 in the prior year and the first team enjoyed better sporting success than the previous season, although it fell agonisingly short of winning the Bundesliga. We will update our underlying FY24 estimates when the full financial statements are published at the end of September 2023 but, in the interim, we include part of the disclosed transfer profit on the recent sale of Jude Bellingham.