Daily Brief Consumer: Alibaba, China Resources Beer Holdings, Cash Converters Intl, Hanon Systems, Dowlais Group , SJM Holdings, SGX Rubber Future TSR20, Tata Consumer Products, Prosus NV, Samvardhana Motherson International Ltd and more

• Context: Stat-arb models flag Alibaba (9988 HK) as overvalued versus the Hang Seng Index (HSI INDEX), with the difference between implied volatility and option premium at historically high levels.
• Highlight: An actionable trade setup — long HSI calls vs. short Alibaba calls — that captures relative value and introduces leverage through a ratio structure.
• Why Read: This is a timely opportunity to combine a directional view with favorable volatility dynamics, offering asymmetric payoff potential.

• Heineken Holding NV (HEIO NA) ’s US$3.2bn acquisition of beer, soft drinks, and retail assets in Central America at 11.6x EV/EBITDA highlights the valuation gap with Asian Beer Companies.
• CR Beer’s strong 1H2025 recovery in sales and margins were powered by innovative product launches and digital channel sales. However it’s performance has drawn little market attention, yet.
• China Resources Beer Holdings (291 HK)  trades near 10-year low EV/EBITDA, even as consensus expects solid margins and steady revenue growth ahead. Expect a valuation upside.

• Cash Converters International (ASX:CCV) is a consumer finance company operating as a service provider, owner and franchisor of second-hand goods and financial services stores in Australia and internationally.
• CCV is currently executing a clearly stated growth strategy involving the reshaping of its personal finance business complemented by growing its corporately-owned store network through acquisition.
• The recent FY25 result was a strong representation of a business that is successfully transitioning and a good leading indicator of the changing business mix which should ultimately result in a business that is geographically broadened yet operating a simplified lending business, with a lower risk profile and improved growth funding optionality.

• Hanon Systems announced that it has finalized a rights offering capital increase of 900 billion won. This capital raise will involve 347.5 million common shares (51.2% of outstanding shares)
• The expected rights offering price is 2,590 won per share, which is 18.4% lower than current price of 3,175 won. 
• We remain Negative on Hanon Systems (018880 KS). There is a high probability that this rights offering deal will likely be a dilutive deal for the Hanon System shareholders.

• Dowlais shareholders receive £0.43 cash plus 0.0881 AAM shares, valuing the stock near 82p. Current price 79.75p leaves a 2.9% spread, annualising to ~11–13% returns.
• Both shareholder votes passed and AAM secured $3bn funding, reducing execution risk. Regulatory approvals across the US, EU, China, Brazil, and Mexico remain the final gating conditions to completion.
• Downside if deal fails: shares could re-rate to pre-announcement 68–75p, ~5–15% downside. Market sees limited overlap, so main risk is delayed approvals pushing closing into early 2026.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings
• UST yields climbed 2-3 bps across the curve yesterday, rising for the fourth straight day after the Fed’s rate cut last week. The UST curve bear flattened slightly, with the yield on the 2Y UST rising 3 bps to 3.60%, while that on the 10Y UST increased 2 bps to 4.15%. Equities climbed for a third straight day.
• The S&P 500 edged up 0.4% to a fresh record high (for the 28th time this year) of 6,694, while the Nasdaq was up 0.7% at 22,789.

• Tire makers see profit pressure despite revenue gains  
• JK Tyre eyes double-digit growth, expands global footprint  
•  CEAT eyes expanding Chennai plant at US$51 million spend  

• Transformation into a Diversified FMCG Major: Tata Consumer Products (TCPL) is aggressively diversifying beyond its core tea and salt businesses, moving into higher-growth categories like packaged foods (Tata Sampann), snacks (Tata Soulfull), and ready-to-drink beverages. Recent acquisitions of Capital Foods (Ching’s Secret, Smith & Jones) and Organic India significantly expand its total addressable market and enhance its presence in high-margin segments.
• Strong Brand Equity and Distribution as Key Moats: The company leverages the immense trust associated with the ‘Tata’ brand, providing a significant competitive advantage. Its extensive distribution network, reaching millions of retail outlets, combined with a growing e-commerce presence, creates a formidable barrier to entry and a platform to scale new product launches and acquisitions effectively.
• Focus on Premiumization and Innovation Driving Growth: TCPL is strategically focused on premiumizing its portfolio across categories, such as value-added salts and premium tea variants, to capture evolving consumer preferences and improve margins. A consistent pipeline of new product launches, particularly in health and wellness, caters to modern consumer trends and is a key driver of future growth.

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• Prosus is a global internet group with a vast portfolio of online companies, but its market value is predominantly influenced by its substantial stake in Chinese tech giant Tencent.
• The company trades at a significant and persistent discount to its net asset value (NAV), a key challenge management is addressing through an open-ended share buyback program funded by the gradual sale of its Tencent shares.
• A strategic pivot is underway, shifting from a passive investment holding company to an active operator aiming to drive its core e-commerce segments (Food Delivery, Classifieds, Fintech, and Edtech) to sustained profitability and unlock value independent of Tencent.

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• Global Automotive Component Leader with Diversified Operations: Samvardhana Motherson International Ltd. (SAMIL) is a leading global manufacturer of automotive components, with a well-diversified portfolio across products, geographies, and customers. The company is a key solutions provider to major automotive original equipment manufacturers (OEMs) worldwide.
• Strong Growth Trajectory and Ambitious Future Plans: The company has a proven track record of strong financial performance, characterized by consistent revenue and profit growth. SAMIL has laid out an ambitious ‘Vision 2030’ with a target of achieving $108 billion in revenue, driven by organic growth, strategic acquisitions, and diversification into non-automotive sectors.
• Focus on Financial Prudence and Shareholder Returns: Despite its aggressive growth strategy, SAMIL maintains a focus on financial discipline, with a healthy leverage ratio and a commitment to improving its return on capital employed (ROCE). The company also has a stated policy of distributing a significant portion of its profits as dividends.

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