Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>I tally 47 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal. </li>
<li>Two new deals discussed this week on Smartkarma: <a href="https://www.smartkarma.com/entities/furukawa-battery-co-ltd" target="_blank" data-smartkarma-citation="entities:6513:1" rel="noopener">Furukawa Battery (6937 JP)</a>'s TOB, and the <a href="https://www.smartkarma.com/entities/arvida-group-ltd" target="_blank" data-smartkarma-citation="entities:14485:1" rel="noopener">Arvida (ARV NZ)</a>. <a href="https://www.smartkarma.com/entities/warehouse-group-limited-the" target="_blank" data-smartkarma-citation="entities:1721:1" rel="noopener">Warehouse Group Limited (WHS NZ)</a>'s co-founder is kicking tyres. </li>
<li>Key updates took place on <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>, <a href="https://www.smartkarma.com/entities/canvest-environmental-protection-group-co-ltd" target="_blank" data-smartkarma-citation="entities:100:1" rel="noopener">Canvest Environmental Protection Group (1381 HK)</a>, <a href="https://www.smartkarma.com/entities/cpmc-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10427:1" rel="noopener">CPMC Holdings (906 HK)</a>, <a href="https://www.smartkarma.com/entities/jeisys-medical-inc" target="_blank" data-smartkarma-citation="entities:36766:1" rel="noopener">Jeisys Medical (287410 KS)</a>, and <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>.</li>
</ul>


I tally 47 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal. 
Two new deals discussed this week on Smartkarma: Furukawa Battery (6937 JP)'s TOB, and the Arvida (ARV NZ). Warehouse Group Limited (WHS NZ)'s co-founder is kicking tyres. 
Key updates took place on Pacific Smiles (PSQ AU), Canvest Environmental Protection Group (1381 HK), CPMC Holdings (906 HK), Jeisys Medical (287410 KS), and Hollysys Automation Technologies (HOLI US).


(Mostly) Asia-Pac M&A: Furukawa Battery, Arvida, Warehouse Group, Pacific Smiles, Canvest, Jeisys

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>Much of the action for the upcoming retail reporting season came to light during confession season in February.</li><li>KMD Brands (KMD) reported disappointing half year sales with declines across all brands; Hallenstein Glassons' (HLG) sales were flat, supported by a strong Christmas trading season and trading down trends; and the Warehouse Group (WHS) announced the sale of its under performing Torpedo 7 business for NZ$1. </li><li>The consumer backdrop has been challenging and we can't see any signs of that changing in the near-term. </li></ul>

Much of the action for the upcoming retail reporting season came to light during confession season in February.KMD Brands (KMD) reported disappointing half year sales with declines across all brands; Hallenstein Glassons' (HLG) sales were flat, supported by a strong Christmas trading season and trading down trends; and the Warehouse Group (WHS) announced the sale of its under performing Torpedo 7 business for NZ$1. The consumer backdrop has been challenging and we can't see any signs of that changing in the near-term. 

Retail Sector - Checking Out Reporting Season

Equity Bottom-Up

Warehouse Group Limited / Equity Bottom-Up

<ul><li>The Warehouse Group's (WHS) 1Q24 trading update highlighted revenue declines across all group brands, with Torpedo7 the worst performer. </li><li>Management's outlook comments highlighted uncertainty leading into the important second quarter trading period, given higher interest rates and cost of living pressures remain significant. </li><li>We downgrade our rating for The Warehouse Group (WHS) from NEUTRAL to UNDERPERFORM due to: (1) a challenging consumer demand environment which shows few signs of turning around in the near term and limited options for revenue growth; (2) continued cost pressures and difficulty controlling costs in the short run driving operating deleverage, with substantial digital project programs underway; and (3) downside risk from continued Torpedo7 losses and additional costs in an exit scenario.</li></ul>

The Warehouse Group's (WHS) 1Q24 trading update highlighted revenue declines across all group brands, with Torpedo7 the worst performer. Management's outlook comments highlighted uncertainty leading into the important second quarter trading period, given higher interest rates and cost of living pressures remain significant. We downgrade our rating for The Warehouse Group (WHS) from NEUTRAL to UNDERPERFORM due to: (1) a challenging consumer demand environment which shows few signs of turning around in the near term and limited options for revenue growth; (2) continued cost pressures and difficulty controlling costs in the short run driving operating deleverage, with substantial digital project programs underway; and (3) downside risk from continued Torpedo7 losses and additional costs in an exit scenario.

The Warehouse Group - 1Q24 Sales Checkout—UNDERPERFORM

<ul><li>The Warehouse Group (WHS) reported a subdued FY23 result which was broadly in line with our expectations but a material decrease on the prior year.</li><li>The disappointing operating result was primarily driven by: (1) year on year revenue declines in all brands except The Warehouse, (2) broad-based inflation, (3) gross margin pressures, which were more severe in 1H23, and (4) increases in cost of doing business (CODB) from higher information system spend, depreciation, and lease costs.</li><li>Torpedo7's operating loss was a key negative surprise, and with a mixed earnings track record, raises questions on the sustainability of this division. </li></ul>

The Warehouse Group (WHS) reported a subdued FY23 result which was broadly in line with our expectations but a material decrease on the prior year.The disappointing operating result was primarily driven by: (1) year on year revenue declines in all brands except The Warehouse, (2) broad-based inflation, (3) gross margin pressures, which were more severe in 1H23, and (4) increases in cost of doing business (CODB) from higher information system spend, depreciation, and lease costs.Torpedo7's operating loss was a key negative surprise, and with a mixed earnings track record, raises questions on the sustainability of this division. 

The Warehouse Group - FY23 Result — Torpedo-Ed

<ul><li>We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.</li><li>WHS has not provided revenue or earnings guidance for the full year, but we expect cost pressures and a challenging consumer demand environment have been significant headwinds.</li><li>Trading updates from key retailer peers continue to highlight difficult near-term conditions, with no signs of easing. We reduce our earnings expectations primarily for cost pressures. </li></ul>

We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.WHS has not provided revenue or earnings guidance for the full year, but we expect cost pressures and a challenging consumer demand environment have been significant headwinds.Trading updates from key retailer peers continue to highlight difficult near-term conditions, with no signs of easing. We reduce our earnings expectations primarily for cost pressures. 

The Warehouse Group - Checking Out the Competition

New Zealand

The Warehouse Group Limited operates general merchandise and stationery supply retail stores throughout New Zealand.

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Warehouse Group Limited (WHS NZ)

(Mostly) Asia-Pac M&A: Furukawa Battery, Arvida, Warehouse Group, Pacific Smiles, Canvest, Jeisys

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Retail Sector - Checking Out Reporting Season

Much of the action for the upcoming retail reporting season came to light during confession season in February. KMD Brands (KMD) reported...

Forsyth Barr

The Warehouse Group - 1Q24 Sales Checkout—UNDERPERFORM

The Warehouse Group's (WHS) 1Q24 trading update highlighted revenue declines across all group brands, with Torpedo7 the worst performer.

Forsyth Barr

The Warehouse Group - FY23 Result — Torpedo-Ed

The Warehouse Group (WHS) reported a subdued FY23 result which was broadly in line with our expectations but a material decrease on the prior year.

Forsyth Barr

The Warehouse Group - Checking Out the Competition

We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.

Forsyth Barr

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