Daily Brief Consumer: SPDR S&P 500, Dream International, Dada Nexus , Chagee Holdings, TSE Tokyo Price Index TOPIX, NZME Limited, Global Business Travel Group I, Spectrum Brands Holdings, Inc, Coursera , Dustin Group AB and more

• For weeks, if not months, the world has been wondering what the “reciprocal tariffs” would be, and what the logic would be behind them.
• There is talk of VAT, and NTBs, and huge tariff step-ups after quotas are exceeded (US exports of milk and cheese to Canada – high tariffs, but quotas not exceeded).
• But a quick check of the math on the Trump Executive Order and Annex I tells you the logic is different than what everyone expected. 

• Dream International (1126 HK) posted strong results, with revenues up 2% and profits down 11% YoY, demonstrating effective cost control in a challenging competitive environment.
• Net cash on the balance sheet ended at 1.52 bn HKD (vs 1.35 bn), representing 33% of market capitalization. The company rewarded shareholders with 60 cents of dividend (~8.9% yield). 
• Trading at 6x/3x PE/EV-EBITDA FY24, with an 8.9% dividend yield and an average 10-year ROCE of 20%, the stock is worth exploring from here. 

• Back on the 27th January, Dada Nexus (DADA US), a Chinese on-demand retail and delivery platform, announced a preliminary non-binding proposal from JD.com (9618 HK).
• JD.com, a 63.2% shareholder, was offering US$0.50/share (US$2.00/ADS), a 42% premium to last close. Those terms are now firm and a definitive agreement entered into.
• The merger is expected to close in the third quarter. Trading at 4.7%/15%, gross/annualised spread, assuming a four month off-ramp.

• Chagee Holdings (CHA US) is getting ready to complete its IPO on NASDAQ in the next several weeks. Chagee is one of the largest premium tea chains in China. 
• The company’s sales and profits have been exploding higher in the past three years. Its sales jumped from 0.5 billion RMB in 2022 to 12.4 billion RMB in 2024. 
• Chagee could raise more than $500 million in this IPO. However, this is subject to change. 

• The profit outlook for many Japanese companies may not be good enough for overseas investors, who are selecting the best investments from among stocks around the world.
• In FY2025, both sales and recurring profit are expected to slow in the manufacturing sector. This casts a shadow over TSE stock prices, which are dominated by manufacturing companies.
• Companies whose corporate performance are at a standstill has good opportunity to show investors how it will use the proceeds from the sale of cross-held shares to expand corporate value.

• Back in January, New Zealand’s largest private sector union called for the government to step in after NZME Limited (NZM AU/NZ), publisher of the NZ Herald, announced sweeping job cuts, 
• After a flurry of rumours, James Grenon, a Canadian-born but New Zealand-based investor, has proposed sacking the board. Allegedly 37% of shares out, including Genon’s stake, support the board spill.
• The AGM has been pushed out to the 3 June. In a detailed PPT, NZME questions whether Grenon’s motives are in the best interest of the company and its shareholders. 

• American Express Global Business Travel reported strong financial performance for the fourth quarter and full year of 2024, showcasing a record year for adjusted EBITDA and revenue.
• The company exceeded the midpoint of its guidance range, with adjusted EBITDA rising by 26% year-over-year.
• These results were driven by growth in technology-enabled productivity, a scalable cost base, and robust free cash flow generation.

• Spectrum Brands Holdings, Inc. had a mixed first quarter of fiscal year 2025, as revealed in their recent financial results.
• The company experienced a modest increase in net sales, driven by strategic investments and several successful initiatives across its business segments.
• Net sales grew by 1.2% overall, with organic sales, excluding unfavorable foreign exchange impacts, rising by 1.9%.

• Coursera’s latest quarterly and full-year earnings report highlights a complex picture characterized by noteworthy achievements as well as certain challenges.
• Revenue for the fourth quarter of 2024 reached $179 million, marking a 6% increase from the previous year across all operational segments.
• Full-year revenue stood at $695 million, up 9% year-over-year, alongside significant profitability improvements, exemplified by a 750 basis point increase in annual adjusted EBITDA margin and over $59 million in free cash flow.

Refocusing a business takes time, especially when it involves replacing legacy systems, renegotiating framework agreements, integrating numerous acquisitions and rebuilding the balance sheet. The process becomes even more challenging if it coincides with weak market conditions and a significant level of geopolitical uncertainty. Dustin Group’s management is actively addressing these challenges, including a rights issue announced with its results. The business is well positioned, leaving investors with one key question: when is the right time to buy? We believe the next six months may provide the answer.