Daily Brief Consumer: Itochu Shokuhin, Toyota Industries, Pacific Industrial, Olectra Greentech, Lkq Corp, Borgwarner Inc, Hilton Grand Vacations, Pricesmart Inc, Shake Shack Inc Class A, Cavco Industries and more

• On 14 November, media outlets reported that Sapphireterra has sent a letter to the Itochu Shokuhin (2692 JP) Board suggesting two strategic alternatives to improve shareholder returns. 
• Sapphireterra has suggested that Itochu Corp (8001 JP) privatise Itochu-Shokuhin at JPY14,000, a 50.5% takeover premium. Due to the shareholder structure, Itochu does not need to be this generous.
• Sapphireterra has also alternatively suggested JPY7,000 special dividend. The strong YTD share performance suggests no pressing need for the Board to act on this proposal. 

• Elliott ups its stake in Toyota Industries (6201 JP) and considers the proposed Offer to be significantly undervalues the company. 
• No matter how you slice it, Zijin Mining Group Co Ltd H (2899 HK)is trading rich. Zijin Gold (2259 HK) is trading even richer. 
• Is Genting  (GENT MK)‘s low-balled Offer for Genting Malaysia (GENM MK) all about securing statutory control; or is there scope for a bump now that the transaction has turned unconditional? 

• The Pacific Industrial (7250 JP) “MBO” was egregiously mis-priced. I was surprised the family did it but on 23 October, they increased their bid by 42.4%, from ¥2,050 to ¥2,919/share.
• The stock was at ¥2,735 after activist Effissimo had built a 13% stake at ¥2365. The day after the announcement, the stock opened up through terms and continues to climb.
• Effissimo responded 4 days later, buying 2% of voting rights as the stock climbed past ¥3,000, another 1% later. Now the stock is 8+% through new terms. They’re not playing.

• Olectra Greentech is a leading manufacturer of electric buses in India, strategically positioned to capitalize on the country’s significant push towards electric mobility in public transportation.
• The company’s growth is underpinned by a strong order book from State Transport Undertakings (STUs), a technological partnership with global EV giant BYD, and robust support from government initiatives like the FAME II scheme and the National Electric Bus Program.
• Key risks include high dependence on government contracts, intensifying competition from established automotive players, and a premium valuation that demands flawless execution on its large order book.

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• LKQ Corporation has once again found itself in the activist crosshairs.
• According to reports, hedge fund Ananym Capital has been engaging with the company for several months, urging management to sell or spin off its struggling European business to refocus on its more profitable North American operations.
• The push comes amid ongoing operational challenges across LKQ’s European footprint—where macroeconomic weakness, price competition, and legacy inefficiencies have hampered growth—and after CEO Justin Jude’s recent comments about a potential portfolio simplification process.

• BorgWarner’s third-quarter results for 2025 reveal a mixed performance, characterized by both encouraging indicators and some ongoing challenges.
• The company’s organic sales growth of just over 2% indicates resilience despite external pressures, including downtime at a major European customer due to a cyber-related issue, which slightly dampened performance.
• Excluding declines in the Commercial Vehicle (CV) battery and Charging Systems segment, organic sales grew approximately 4% year-over-year.

• Hilton Grand Vacations (HGV) reported a performance in the third quarter of 2025 that showcased both strategic successes and challenges.
• The company’s contract sales rose impressively by 17% to $907 million, setting a record on a pro forma basis.
• This growth underpinned a noticeable improvement in both real estate profitability and adjusted EBITDA, which reached $302 million, marking near double-digit growth.

• PriceSmart, Inc.’s latest earnings for the fourth quarter of fiscal year 2025 painted a complex picture of the company’s financial health and strategic initiatives.
• On the positive side, the company reported solid growth in both net merchandise sales and revenue, with total net merchandise sales reaching nearly $5.2 billion for the fiscal year, marking a 7.7% year-over-year increase.
• Notably, this growth was largely driven by the successful expansion of their club network and enhanced digital sales channels.

• Shake Shack’s third quarter of 2025 demonstrated significant growth and operational improvements despite facing macroeconomic challenges.
• The company’s revenue grew by approximately 16% year-over-year, driven by both strong new Shack openings and the performance of its existing comp Shack base.
• The licensing segment also showed robust performance, with revenue increasing by 21.1% year-over-year.

• Cavco Industries, Inc. recently reported their second quarter fiscal year 2026 earnings, showcasing both strengths and challenges.
• Positive aspects included a 9.7% year-over-year increase in revenue, driven by a 5.4% increase in homes sold and a 4.4% increase in average revenue per home sold.
• Operating profit spiked by 27% compared to the previous year, indicative of robust operational performance and cost management efficiency.