Daily Brief Consumer: Yue Yuen Industrial Holdings, Bikaji Foods, Dabur India Ltd, Guangdong Chj Industry Co A, Oriental Food Indust Hldgs, On Holding AG, Once Upon a Farm, PBC, LG Electronics India, Select Comfort, Hyundai Motor and more

• World’s Largest Footwear Manufacturer: Yue Yuen is the global leader in athletic and casual footwear manufacturing, producing for top-tier brands like Nike, Adidas, and New Balance. Its immense scale provides significant competitive advantages.
• Dual Business Model with Integrated Retail: The company operates a core manufacturing (OEM/ODM) business and a significant sportswear retail and distribution arm in Greater China, Pou Sheng International (3813 HK). This provides diversification and end-to-end solutions for its brand partners.
• Challenging Near-Term Outlook but Attractive Valuation: While facing headwinds from rising labor costs, geopolitical uncertainties, and soft consumer demand in its retail segment, the company’s valuation appears compelling. Strong recent growth in net income and a high dividend yield present a potentially attractive risk/reward profile for long-term investors.

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• 94% of Bikaji’s revenue now falls under favorable GST slab due to the recent rate cut, positioning it to gain significant market share through lower consumer prices.
• The company is strategically passing on the tax benefit to consumers via higher grammage and lower MRP, which is expected to drive an incremental 2-3% volume growth while sustaining margins
• The company has the immediate manufacturing headroom and distribution reach to capture the expected volume surge without major, immediate capital expenditure.

• Dabur India Ltd (DABUR IN) ‘s business is contracting in volume and value, with declining margins, masking structural weakness through recurring excuses and shifting narratives across seasons and quarters.
• Disclosure standards have been reduced; management hides key metrics citing “competitive sensitivity,” obscuring true demand, volume trends, and domestic business performance.
• Q2 guidance cut to mid-single-digit growth confirms prior double-digit guidance was untenable, exposing weak underlying demand and the market’s slow recognition of systemic underperformance.

• Guangdong Chj Industry Co A (002345 CH) (CHJ) submitted an application to list H-shares on the Main Board of the Hong Kong Stock Exchange.
• Despite higher valuation multiples, the company has been able to successfully generate higher sales and profits in the past several years. 
• The high and rising global gold prices have created a strong loyal customers and investor base that could positively impact this IPO on the HK Stock Exchange. 

• Makes branded and contract manufacturing snack food and confectionaries in Melaka Malaysia
• Super Ring is its own brand which is very popular among customers for its unique flavour
• Company is expanding capacity indicating the future revenue and profit grow

• On Holding AG is a high-growth premium sportswear brand that has rapidly gained market share through innovative products, particularly its patented CloudTec® cushioning technology, and effective marketing strategies.
• The company demonstrates a strong financial profile with impressive revenue growth, high gross margins, and a robust balance sheet with more cash than debt, enabling significant reinvestment into global expansion and product diversification.
• Key risks to the investment thesis include a high valuation that prices in significant future growth, intense competition from established industry giants, and potential margin pressures from currency fluctuations and tariffs.

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• They are driving systemic change in childhood nutrition with real, organic, farm-fresh food–made with no added sugar, no preservatives, and nothing artificial.
• Their net sales were $94.3 million and $156.8 million and their net loss was $17.6 million and $23.8 million in 2023 and 2024, respectively.
• The current government shutdown could delay the debut of this IPO due to the SEC unable to deem IPOs “effective” in a timely manner. 

• LG Electronics India (LGEIL) ’s USD 1.3 bn IPO, which opened on October 6, closes for subscription today, October 9, and is expected to list on October 14th.
• LGEIL has secured Rs34.7 bn from anchor investors ahead of its Rs116.1 bn IPO, signaling a likely strong oversubscription at close today.
• LGEIL IPO, priced at a steep discount to peers do not fully reflect company’s comparative strengths – strong market leadership, high returns and growth potential. Expect listing pop of 30%+.

• Select Comfort, operating as Sleep Number, is facing significant financial headwinds, evidenced by a consistent decline in revenue and a shift from profitability to net losses over the past three years. This is reflected in the negative compound annual growth rates across all key financial metrics over the last decade.
• The company’s core competitive advantage lies in its patented, adjustable air-chambered smart bed technology (Sleep Number 360) and a direct-to-consumer (DTC) sales model. This allows for brand control and higher potential margins, but also necessitates significant marketing expenditure.
• The mattress industry is intensely competitive and sensitive to macroeconomic conditions affecting consumer discretionary spending. While the trend towards health and wellness and smart home technology presents an opportunity, the company faces threats from both traditional players and nimble online ‘bed-in-a-box’ competitors.

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• Sanae Taikichi will become the next Prime Minister of Japan. This is likely to have a Negative impact on the Korean automakers including Hyundai Motor and Kia Corp.
• Sanae Takaichi is a firm advocate of the late Prime Minister Shinzo Abe’s “Abenomics” strategy to boost the economy with aggressive spending and easing monetary policy.
• The weakening JPY combined with existing tariff rate advantage versus the South Korea could further positively impact the Japanese auto makers versus the Korean auto makers.