ConsumerDaily Briefs

Consumer: Sony Corp, Zomato, Cosmax Inc, Nayuki Holdings, Tesla Motors, Izumi Co Ltd and more

In today’s briefing:

  • Sony Bull Bet off Trendline Nearing First Resistance
  • Zomato (ZOM IN) | Merchant Surveys – Operating Metrics and a Hidden Predator
  • Cosmax Rights Offering Details & Trading Opportunities
  • Nayuki Holdings IPO: ‘New Style’ Teahouses Are Failing to Encourage Customers to Make Regular Visits
  • Tesla’s Pending China Sales and Model S Plaid—with an Asterisk
  • Izumi Focus on Food and Online Should Improve Margins

Sony Bull Bet off Trendline Nearing First Resistance

By Thomas Schroeder

Sony Corp (6758 JP) rally off of 10k trendline buy support is nearing the first key resistance at 11,400  (to reduce) with intermediate resistance at 11,700. Rally is due for a rest with risk of re testing the key trendline support that if broken would cause mid cycle damage (a must hold level).

Dual tops to weigh on rally attempts.

Trendline support currently lies near 10,250 and the trend pivot.

Zomato (ZOM IN) | Merchant Surveys – Operating Metrics and a Hidden Predator

By Pranav Bhavsar

In our quest to value Zomato (ZOM IN, in this insight, we identify key operating metrics that would aid in the revenue build-up. To understand the core drivers behind these operating metrics, we speak to predominantly urban dominated restaurateurs in Mumbai, Hyderabad, Visakhapatnam (Vizag) and Bangalore.  

This insight focuses on building Gross Order Value (GOV), Revenue and Margins will be subject of subsequent insights, post additional channel checks. 

Cosmax Rights Offering Details & Trading Opportunities

By Douglas Kim

Trading Opportunity for the Rights Offering – For the short term investors, we think that there could be an attractive trading opportunity regarding Cosmax. Given the relatively high upside (current price vs expected rights offering price), we would participate in the rights offering.

We also think that there is a relatively solid probability of the COVID-19 cases declining in Korea in the next several weeks and that Xi Jinping could come to South Korea sometime in August/September. As a result, we believe that there is a good chance that the Korean cosmetics stocks continue to outperform in the 2-3 months. 

In this insight, we discuss the details of the Cosmax Inc (192820 KS) rights offering details and potential trading opportunities. Cosmax is one of the top five listed cosmetics companies in Korea. It currently has a market cap of 1.3 trillion won ($1.2 billion).

On 26 April 2021 (after market close), Cosmax announced that it will issue 1.3 million shares to raise 144.3 billion won. After this announcement, the stock fell 11.5% on the following day. Since then, the stock price has recovered nicely. From 26 April to 8 June 2021, Cosmax’s share price is down 3%. 

The expected rights offering price is 103,000 won and based on the current price of 130,000 won, it represents a 26.2% upside. Given this solid upside and the recent recovery of the stock price, there is likely to be relatively solid demand for this rights offering. 

The rights offering subscription dates for the existing shareholders are from 17 to 18 June 2021. The new shares listing date is on 8 July. There is a 11.5% shares dilution associated with this rights offering. 

Currently, Cosmax BTI is the largest controlling shareholder with a 26.2% in Cosmax Inc (192820 KS)

Nayuki Holdings IPO: ‘New Style’ Teahouses Are Failing to Encourage Customers to Make Regular Visits

By Oshadhi Kumarasiri

  • Nayuki Holdings (NYK HK), the operator of Nayuki teahouses, has had a successful hearing with the Hong Kong Stock Exchange about proceeding with the proposed US$500m IPO, which could value the company in excess of US$2.0bn. The company was valued at nearly US$2.0bn at its latest funding round in December 2020.
  • Nayuki is growing rapidly on the back of ‘new style’ tea growth in China, but these bubble and fruit infused teas do not contain sufficient caffeine to produce enough dopamine to cause an addiction that could encourage consumers to walk into these ‘new style’ teahouses on a daily basis. We think bubble tea/new style tea is a temporary bubble. Thus, Nayuki’s medium term growth prospects might be weaker than what they appear to be on the surface. 

Tesla’s Pending China Sales and Model S Plaid—with an Asterisk

By Vicki Bryan

The first “refreshed”Tesla Motors (TSLA US) Model S will roll out in a “delivery event” on Thursday, unless it gets delayed again.

Either way, it’s not likely to move the needle much on second quarter deliveries.

For that we look to China, arguably Tesla’s most important market. This week we find out how well Tesla’s monthly deliveries recovered in May versus dismal April results (see Tesla’s Troubles in China Are Heating Up on 5/12/21).

Izumi Focus on Food and Online Should Improve Margins

By Michael Causton

Izumi Co Ltd (8273 JP) is Japan’s largest retailer in the South and, at least until 2018, was the last GMS to maintain a growth trajectory. Now, with the popularity of the Cosmos Pharmaceutical (3349 JP)  discount food chain eating into Izumi’s profits in Kyushu and the same lack of enthusiasm for the GMS format also spreading as it has elsewhere, Izumi last month announced a wide-ranging and ambitious plan to reinvent itself over the next five years. Izumi’s alliance with Seven & I Holdings (3382 JP) will also grow in importance.

These plans include expansion online and investment in discount retailing. The problem with the former is that there are already many more and better organised competitors and in the latte, Izumi has no experience in the kind of supply chain expertise required to build a discount retail business of any scale.

While Izumi has been one of the few well-run GMS operators in the past five years, there is increasing concern that it will fall victim to pressures from discounters on one side and e-commerce competitors on the other.

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