Consumer: Seven & I Holdings, Taste Gourmet Group, Tassal, China Tourism Group Duty Free Corp Ltd, Sawit Sumbermas Sarana and more

• Initial reports suggest that Fortress Investment, part of the Softbank group of funds, is now the frontrunner in negotiations to acquire Sogo Seibu department stores from Seven & I.
• Reports suggest Fortress is already in discussions with privately owned retailer Yodobashi Camera to take over management of the chain’s better stores, beginning with Seibu Ikebukuro.
• The loss of ¥500 billion or so in turnover won’t be missed not will the ¥8.8 billion losses but activist investors won’t stop there.

• Taste Gourmet Group (8371 HK) reported worse numbers than we expected for Q4 2022 during the restrictions; Checks indicate recovery in Q1 2023 is far better than our expectations. 
• Cash declining from 96 to 65 mn HKD QoQ resulted in the company having to declare a smaller final dividend of 1.6 HKD cents ( interim: 4 HKD cents ) 
• Trading at 5.4x FY23 and 11.1% dividend yield (assuming a 60% payout ratio), the company represents an excellent investment opportunity with >100% upside at the very least.

• On 1 July, Cooke, the spurned suitor, disclosed that it further increased its stake from 5.40% to 7.60% at an average price of A$4.59 per share. 
• The Tassal (TGR AU) Board decided not to engage with Cooke as its third offer of A$4.85 per share did not reflect the fundamental value of the business. 
• Cooke’s recent actions suggest that it will not be easily deterred. We think that it is likely that Cooke returns with another offer which will force the Board to engage.

• China Tourism Group Duty Free Corp Ltd (601888 CH) has revived its H-share IPO plan by re-submitting the Application Proof to the Hong Kong Stock Exchange on 1 Jul. 
• While there is no material changes in the Proof, weaker 1Q22 result, negative impact of pandemic and new agreements signed with Guangzhou Airport are recent developments that should be noted.
• We think CDFC’s H-shares, based on similar valuation before cancellation of the previous IPO plan, look less attractive given the sharp pull back of its peers in Hong Kong. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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