Daily Brief Consumer: Doms, JB Hi-Fi Ltd, Evergrande Auto, Wynn Resorts, paragon AG, Sony Corp, The Walt Disney Co, Culp Inc, Honda Motor Co Ltd (Adr), Home Depot Inc and more

• Doms (DOMS IN) is looking to raise around US$140m (estimated) in its upcoming India IPO. The deal will be run by JM Financial, BNP, ICICI Securities and IIFL Securities.
• DOMS is a leading player and brand in India’s stationery and art products market. It designs,  manufactures, and sells a wide range of products, primarily under its flagship brand ‘DOMS’.
• Its core products such as pencils and mathematical instrument boxes had market shares of 29% and 30% by value in FY23, respectively, as per Technopak.

• JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) could be deleted as the lowest ranked current index constituents.
• There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
• Short interest has been increasing on JB Hi-Fi Ltd (JBH AU), Charter Hall (CHC AU) and Lendlease Group (LLC AU) and could be partially driven by potential index deletions.

• The electric-vehicle unit of defaulted property developer China Evergrande Group reported that in the first half of 2023 it delivered 760 cars and its net loss narrowed by almost half from a year earlier to 6.87 billion yuan ($942 million).
• China Evergrande New Energy Vehicle Group Ltd.’s revenue jumped more than fivefold to 155 million yuan, mainly from mass production and delivery of its flagship model, the Hengchi 5, starting last October.
• The electric-car company has been plagued by production delays and setbacks since touting its first Hengchi model as early as 2019 and pledging to rival Tesla within three to five years.

• Wynn Resorts delivered a positive result and managed an all-around beat in the last quarter.
• During the quarter, Wynn Las Vegas generated $224.1 million in adjusted property EBITDA on $578.1 million in operating revenue, resulting in an EBITDA margin of 38.8%.
• Additionally, Wynn Resorts had strong hotel occupancy and excellent tenant retail sales in July.

paragon continued its debt reduction programme in Q223 with the disposal of semvox. Operating performance progressed positively with H123 sales rising 7% and EBITDA margin in Q223 exceeding 10%, although the business mix shifted towards Mechanics as new contracts ramped up. Management has maintained FY23 guidance and we have modestly reduced our earnings estimates to reflect the mix change as well as higher interest in FY23. As the debt reduction programme continues into FY24 we expect lower interest charges and improving operational cash flows. Assuming the successful further partial redemption of the Eurobond by January 2024, investor focus should return to the growth potential.

• Sony Group Corporation delivered an all-around beat in the previous quarter.
• However, consolidated operating income fell because the Financial Services segment’s operating income fell.
• Software sales for the quarter increased mostly due to the launching of the enticing third-party software and increased PS5 penetration.

• The Walt Disney Company delivered mixed results in the quarter, with revenues well below analyst expectations, but managed an earnings beat.
• The company made significant management adjustments and productivity enhancements to develop a more economical, coordinated, and streamlined approach to operations.
• Disney+ core subscribers increased during the quarter, with foreign growth more than balancing small domestic net losses.

• After Wednesday’s close, Culp Inc. reported a 1Q24 EPS loss of $0.27, beating our $0.36 loss estimate and its 1Q23 $0.47 LPS.

• Revenues missed expectations and residential demand challenged. The balance sheet remains strong.

• The Mattress Fabric (CHF) segment delivered a markedly improved margin, reporting a gross margin of 6.8%, up from negative 0.1% a year ago and better than our estimate of 2.6%.

• Honda Motor delivered a mixed result in the recent quarter, with revenues below market expectations, but surpassed the analyst consensus regarding earnings.
• Unit sales for Power Products operations fell to 5.645 million units, mostly because of a fall in North America.
• The supply conditions for semiconductors gradually improved throughout the quarter, which led to greater unit sales in the United States year over year.

• The Home Depot delivered a solid result and managed an all-around beat in the last quarter, with sales of $42.9 billion.
• Comp sales for the entire firm, as well as for the company’s US locations, fell in the quarter.
• The second quarter’s pro sales performance was slightly worse than the DIY customer’s performance.