Smartkarma Daily Briefs

Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO

By David Blennerhassett

Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

By Osbert Tang, CFA

The change in controlling shareholder at Hainan Meilan International Airport (357 HK) will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.
The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.
The new parent Hainan Airport Infrastructure (600515 CH) can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook.

Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China

By Andrei Zakharov

Kayou Inc., early-mover in the trading card industry in China, filed for an IPO in Hong Kong. The company sells trading cards, toys, figures, badges, pens, and notebooks, among others.
Kayou Inc. received capital of ~$135M from HongShan Capital and Tencent Holdings in 2022. Mr. Li Qibin founded trading card and collectible toy firm in 2011.
Founder led company has delivered 250%+ growth and FCF of $500M+ in 2024. The market opportunity is large enough to support sustained high growth for Kayou for several years.

[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales

By Eric Wen

Luckin reported C1Q25 revenue in-line/6% vs. our estimate/consensus, and non-GAAP operating profit 9%/75% higher than our estimate/consensus, thanks to warmer weather and constrained marketing spending;
Despite Luckin pre-emptive lock-ins, rising coffee bean price shall still take its toll as Luckin’s biggest rival Starbucks should be equally capable of managing the commodity price risk.
We keep Luckin as BUY rating but cut TP to US$39.

Pre-IPO Fujian Lemo IoT Technology – The Outlook for Growth and Profit Margins Is Not Optimistic

By Xinyao (Criss) Wang

Lemo increased the number of massage equipment in the cinemas significantly, but the transaction value has reflected its ineffective business expansion. The Company may have already encountered a growth ceiling.
Lemo’s business model requires high occupancy fee and maintenance costs, which is hard to decrease. However, if revenue growth slows down, Lemo’s profits would be “eroded” due to high costs.
In Sep. 2024, valuation of Lemo reached RMB750 million. We think valuation of Lemo could be lower than that of peers in the future due to concerns on the outlook.

Suzhou Ribo Life Science (瑞博生物) Pre-IPO Quick View: Scarcity of SiRNA Player

By Ke Yan, CFA, FRM

Suzhou Ribo Life is looking to raise at least US$100 million via a Hong Kong listing. CICC and Citi are the deal sponsors.
Ribo Life is a world leading company in the area of siRNA research.
The company’s RBD4059 is potentially the first in class siRNA drug for thrombotic diseases.

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May 02

Daily Brief India: Vedanta Ltd, Jindal Steel & Power, TVS Motor and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

Vedanta’s Volume-Led Growth and Deleveraging Journey
Commissioning Milestones Critical as JSPL Enters Peak Expansion Phase
TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?

Vedanta’s Volume-Led Growth and Deleveraging Journey

Vedanta reported 10% revenue growth and 37% EBITDA growth in FY25, supported by volume expansion across aluminium and zinc businesses.
Major capex projects, including Gamsberg Phase 2 and captive bauxite and coal mines, are expected to drive volume growth through FY27, with steady operational guidance.
Vedanta Resources standalone net debt reduced from $8.9 billion to $4.9 billion over three years, easing refinancing risks and improving financial flexibility.

Commissioning Milestones Critical as JSPL Enters Peak Expansion Phase

FY25 steel production grew 2% YoY to 8.12 MT; adjusted EBITDA stood at Rs9,570 crore with EBITDA/t of Rs12,008; net debt/EBITDA improved to 1.26x.
Major projects including BF2, BOS2, CRM complex, slurry pipeline, and SBPP are targeted for commissioning by FY26-end, expanding steel capacity to 14.45 MTPA.
Near-Term priorities are volume ramp-up, improving cost efficiency through captive resources and logistics, and maintaining strict capital discipline with net debt/EBITDA below 1.5x.

TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?

By Sreemant Dudhoria

Robust Operating Performance:TVS Motor (TVSL IN) reported 17% YoY revenue growth in Q4FY25 with EBITDA margins at 12.5% (ex-PLI) — stable despite input cost pressures.
EV Momentum & Premium Product Strength: EV sales rose 54% YoY, and TVS continued to gain traction in the premium segment through its Apache and Ntorq models.
Valuation Demands Flawless Execution:At 58x P/E TTM EPS,TVS commands a steep premium over peers.Justifying this requires sustained outperformance in EV adoption, export monetization, and premium product cycles without margin erosion.

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May 02

Daily Brief Japan: Toyota Industries, Shibaura Electronics, Sony Corp, Ebay Inc, Tokyo Electron, Hakuto Co Ltd, Meiwa Corp, Japan Investment Adviser Co, Nihon Chouzai and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500
Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time
SONY (6758) | Going into Earnings
Ebay’s Qoo10 Surges on K-Style Boom
Tokyo Electron (8035 JP): Full-year FY03/25 flash update
Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update
Meiwa Corp (8103 JP): Full-year FY03/25 flash update
Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update
Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid

Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.

Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500

A Nikkei article today suggested Minebea Mitsumi (6479 JP) would overbid Yageo’s dramatic 20% overbid of Minebea’s early ¥4,500 overbid of Yageo’s initial ¥4,300 bid for Shibaura Electronics (6957 JP).
Now the news is out. MinebeaMitsumi has bid ¥5,500. Shibaura Electronics has endorsed. This is bang-in-line with the expected path. The question is now YAGEO’s overbid, expected 7 May.
If I were YAGEO, I would wait for Shibaura’s earnings a couple of days later, then overbid by ¥100-150 and go for 35 days. There’s optionality there.

Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time

Minebea Mitsumi (6479 JP) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY 5,500, representing a 1.9% premium over Yageo Corporation (2327 TT)’s JPY 5,400 hostile offer.
There are factors supporting Yageo again outbidding Minebea, and Yageo calling it quits. A revised Yageo could potentially touch JPY6,000, 40% higher than its first offer.
The shares are trading 7.1% above Minebea’s offer, factoring in a fair chunk of the upside from an ongoing bidding war. Take profits as risk/reward looks unattractive.

SONY (6758) | Going into Earnings

By Mark Chadwick

Content-Driven growth: Strong performance in music and gaming supports Sony’s shift toward high-margin content, insulating it from trade and macro headwinds.
Upcoming catalysts: Spin-off of Sony Financial and potential restructuring could unlock value and address the long-standing conglomerate discount.
Attractive valuation: Trading at 14x EV/EBIT with defensive sector exposure, Sony remains undervalued relative to global peers despite YTD outperformance.

Ebay’s Qoo10 Surges on K-Style Boom

By Michael Causton

Qoo10 is tiny in comparison to Amazon, Rakuten and Yahoo but it punches well above its weight by specialisation.
The online mall’s focus on Korean cosmetics and lifestyle has given it a depth of loyalty among young women that was once the preserve of Zozo.
Along with its other platform Move, Ebay Japan has built a solid presence in the Japanese market which looks set to continue to expand.

Tokyo Electron (8035 JP): Full-year FY03/25 flash update

In FY03/25, the company achieved revenue of JPY2.43tn, operating profit of JPY697.3bn, and net income of JPY544.1bn.
For FY03/26, the company projects revenue of JPY2.6tn, operating profit of JPY727.0bn, and net income of JPY566.0bn.
The company plans to increase R&D expenses to JPY300.0bn in FY03/26, up from JPY250.0bn in FY03/25.

Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update

FY03/25 results: Sales JPY183.1bn (+0.6% YoY), Operating profit JPY7.9bn (+3.6% YoY), Net income JPY5.1bn (-0.9% YoY).
FY03/25 forecast: Sales JPY186.0bn (+1.6% YoY), Operating profit JPY6.0bn (-24.2% YoY), Net income JPY4.9bn (-4.5% YoY).
Hakuto’s medium-term plan targets sustainable growth by FY03/29, with Vision 2030 and Hakuto 2028 initiatives.

Meiwa Corp (8103 JP): Full-year FY03/25 flash update

FY03/25 revenue was JPY156.7bn (-1.0% YoY), with operating profit JPY3.6bn (+20.1% YoY) and net income JPY3.4bn (+22.6% YoY).
FY03/26 forecast: revenue JPY160.0bn (+2.1% YoY), operating profit JPY3.2bn (-10.3% YoY), net income JPY3.0bn (-11.1% YoY).
Meiwa plans a JPY38.00 per share dividend for FY03/26, down from JPY42.00 in FY03/25.

Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update

Q1 revenue increased 22.3% YoY, driven by a 19.5% rise in Operating Lease business revenue, reaching JPY11.0bn.
Operating profit margin rose 9.9pp to 63.3% in Q1, despite foreign exchange losses of JPY448mn.
Total value of operating lease deals arranged in Q1 was JPY79.3bn, with significant growth in vessel arrangements.

Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Sales increased by 5.9% YoY to JPY360.5bn, but operating profit decreased by 31.8% YoY to JPY6.2bn.
Pharmaceutical Manufacturing faced a JPY630mn operating loss due to NHI drug price revisions and manufacturing deficiencies.
FY03/26 forecasts sales of JPY372.8bn (+3.4% YoY) and net income of JPY3.5bn (+151.6% YoY).

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May 02

Daily Brief Energy/Materials: Vedanta Ltd, ADX Energy Ltd, Jindal Steel & Power, Taiyo Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

Vedanta’s Volume-Led Growth and Deleveraging Journey
ADX Energy (ASX: ADX): Readying-up the portfolio to return to drilling in 4Q, 2025
Commissioning Milestones Critical as JSPL Enters Peak Expansion Phase
Taiyo Holdings (4626 JP): Full-year FY03/25 flash update

Vedanta’s Volume-Led Growth and Deleveraging Journey

Vedanta reported 10% revenue growth and 37% EBITDA growth in FY25, supported by volume expansion across aluminium and zinc businesses.
Major capex projects, including Gamsberg Phase 2 and captive bauxite and coal mines, are expected to drive volume growth through FY27, with steady operational guidance.
Vedanta Resources standalone net debt reduced from $8.9 billion to $4.9 billion over three years, easing refinancing risks and improving financial flexibility.

ADX Energy (ASX: ADX): Readying-up the portfolio to return to drilling in 4Q, 2025

By Auctus Advisors

• 1Q25 net production was 246 boe/d.
This is in line with our expectations.
ADX held A$6.7 mm in cash at the end of March.

Commissioning Milestones Critical as JSPL Enters Peak Expansion Phase

FY25 steel production grew 2% YoY to 8.12 MT; adjusted EBITDA stood at Rs9,570 crore with EBITDA/t of Rs12,008; net debt/EBITDA improved to 1.26x.
Major projects including BF2, BOS2, CRM complex, slurry pipeline, and SBPP are targeted for commissioning by FY26-end, expanding steel capacity to 14.45 MTPA.
Near-Term priorities are volume ramp-up, improving cost efficiency through captive resources and logistics, and maintaining strict capital discipline with net debt/EBITDA below 1.5x.

Taiyo Holdings (4626 JP): Full-year FY03/25 flash update

Sales increased 13.6% YoY to JPY119.0bn, with Electronics segment sales rising 14.4% YoY to JPY81.7bn.
Operating profit grew 21.2% YoY to JPY22.1bn, driven by high-value-added products and yen depreciation benefits.
Medical and Pharmaceuticals segment profit declined 36.9% YoY due to increased costs and impairment loss.

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May 02

Daily Brief Industrials: Hainan Meilan International Airport, Aeorema Communications, Meiwa Corp, Rasa Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62
Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer
Hybridan Small Cap Feast: 23/04/2025
Meiwa Corp (8103 JP): Full-year FY03/25 flash update
Rasa Corporation (3023 JP): Coverage Initiation

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO

By David Blennerhassett

Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

By Osbert Tang, CFA

The change in controlling shareholder at Hainan Meilan International Airport (357 HK) will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.
The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.
The new parent Hainan Airport Infrastructure (600515 CH) can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook.

Hybridan Small Cap Feast: 23/04/2025

By Hybridan

The strategic communications group with offices in London, New York, and Cannes reports a renewed contract with Stagwell (NASDAQ: STGW).
It is to produce SPORT BEACH at the Cannes Lions International Festival of Creativity in June 2025.
The event includes a reimagined structural design, expanded capacity, new interactive elements and new brand partners, and global athletes.

Meiwa Corp (8103 JP): Full-year FY03/25 flash update

FY03/25 revenue was JPY156.7bn (-1.0% YoY), with operating profit JPY3.6bn (+20.1% YoY) and net income JPY3.4bn (+22.6% YoY).
FY03/26 forecast: revenue JPY160.0bn (+2.1% YoY), operating profit JPY3.2bn (-10.3% YoY), net income JPY3.0bn (-11.1% YoY).
Meiwa plans a JPY38.00 per share dividend for FY03/26, down from JPY42.00 in FY03/25.

Rasa Corporation (3023 JP): Coverage Initiation

In FY03/24, Rasa reported revenue of JPY27.9bn (-5.9% YoY), operating profit of JPY2.5bn (-12.5% YoY), recurring profit of JPY2.8bn (-5.6% YoY), and net income attributable to owners of the parent of JPY2.0bn (-5.5% YoY).
Despite higher profit in the Industrial and Construction Machinery business, overall operating profit declined YoY due to lower profit in the Resources and Metallic Materials and Plant and Equipment Engineering businesses.
In FY03/25, the company forecasts revenue of JPY27.7bn (-0.8% YoY), operating profit of JPY2.3bn (-7.9% YoY), recurring profit of JPY2.5bn (-11.2% YoY), and net income attributable to owners of the parent of JPY1.9bn (-4.9% YoY).

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May 02

Daily Brief TMT/Internet: Shibaura Electronics, Meta Platforms (Facebook), Intel Corp, Qualcomm Inc, Tokyo Electron, Pureprofile Ltd, Hakuto Co Ltd, Solid State PLC and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500
Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time
Meta 1Q’25 Update
Intel Foundry. Lowering 18A Expectations, Moving Away From Copy Exactly? What’s Going On?
Qualcomm 2Q25 (March 25): Boring and Cheap
Tokyo Electron (8035 JP): Full-year FY03/25 flash update
Pureprofile Ltd – Record Q3 revenue, FY25 guidance reaffirmed
Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update
Solid State — Year-end update ahead of consensus

Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500

A Nikkei article today suggested Minebea Mitsumi (6479 JP) would overbid Yageo’s dramatic 20% overbid of Minebea’s early ¥4,500 overbid of Yageo’s initial ¥4,300 bid for Shibaura Electronics (6957 JP).
Now the news is out. MinebeaMitsumi has bid ¥5,500. Shibaura Electronics has endorsed. This is bang-in-line with the expected path. The question is now YAGEO’s overbid, expected 7 May.
If I were YAGEO, I would wait for Shibaura’s earnings a couple of days later, then overbid by ¥100-150 and go for 35 days. There’s optionality there.

Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time

Minebea Mitsumi (6479 JP) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY 5,500, representing a 1.9% premium over Yageo Corporation (2327 TT)’s JPY 5,400 hostile offer.
There are factors supporting Yageo again outbidding Minebea, and Yageo calling it quits. A revised Yageo could potentially touch JPY6,000, 40% higher than its first offer.
The shares are trading 7.1% above Minebea’s offer, factoring in a fair chunk of the upside from an ongoing bidding war. Take profits as risk/reward looks unattractive.

Meta 1Q’25 Update

By MBI Deep Dives

Digital advertising has surpassed the days of “Mad Men” a while ago and thanks to AI, it seems even better positioned to unlock new markets and more opportunities.
Meta is, of course, one of the companies leading this march.
Here are my highlights from today’s call. Daily Active People (DAP) across its Family of Apps (FOA) accelerated to 80 mn QoQ in 1Q’25.

Intel Foundry. Lowering 18A Expectations, Moving Away From Copy Exactly? What’s Going On?

By William Keating

On April 29, Intel hosted the latest in a series of “Direct Connect” events, this time focusing on the company’s Foundry progress and plans
They talked about “ups and downs” with 18A, seeming to lower expectations for the process node which former CEO Gelsinger “bet the company on”. Lots of emphasis on 14A instead.
Foundry chief Naga Chandrasekaran casually announced that the company was “walking away” from Copy Exactly and “democratizing innovation” at the fabs to fix yield, reliability, predictability and cost challenges. Wow!

Qualcomm 2Q25 (March 25): Boring and Cheap

By Nicolas Baratte

Qualcomm Inc (QCOM US) 2Q25 (March-25) spot inline with expectations, 4Q guidance inline with expectations. Revenue growth is slowing down sharply in June. Consensus expects further slowdown in 2H25.
QCOM is losing iPhone modem, Android is not growing in units but chips become more expensive with AI, new revenue streams (AI PC, Auto, Industrial IoT) are not well understood.
The result is Consensus forecasting basically no EPS growth in FY26-27 and the stock is trading at 12x EPS, almost -1 standard deviation below average PEx

Tokyo Electron (8035 JP): Full-year FY03/25 flash update

By Research as a Service (RaaS)

In FY03/25, the company achieved revenue of JPY2.43tn, operating profit of JPY697.3bn, and net income of JPY544.1bn.
For FY03/26, the company projects revenue of JPY2.6tn, operating profit of JPY727.0bn, and net income of JPY566.0bn.
The company plans to increase R&D expenses to JPY300.0bn in FY03/26, up from JPY250.0bn in FY03/25.

Pureprofile Ltd – Record Q3 revenue, FY25 guidance reaffirmed

Pureprofile Ltd (ASX:PPL) is a data analytics and consumer insights company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
On April 30, Pureprofile reported a 16% increase in Q3 FY25 revenue to $12.7m and a 16% increase in Q3 EBITDA to $0.6m versus the previous corresponding period (pcp).
Australia/New Zealand (ANZ) revenue grew 10% on the pcp to $6.6m while Rest of World (RoW) jumped 24% to $6.1m, or 48% of total revenue.

Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update

FY03/25 results: Sales JPY183.1bn (+0.6% YoY), Operating profit JPY7.9bn (+3.6% YoY), Net income JPY5.1bn (-0.9% YoY).
FY03/25 forecast: Sales JPY186.0bn (+1.6% YoY), Operating profit JPY6.0bn (-24.2% YoY), Net income JPY4.9bn (-4.5% YoY).
Hakuto’s medium-term plan targets sustainable growth by FY03/29, with Vision 2030 and Hakuto 2028 initiatives.

Solid State — Year-end update ahead of consensus

By Edison Investment Research

Solid State finished the year strongly, including the announcement of a £19m communications order and defence activity gaining momentum. This, combined with the restructuring and cost initiatives, suggests positive momentum going into FY26. This was after the well documented weakness in industrial markets and destocking affected the year to March 2025.

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May 02

Daily Brief Industrials: Hainan Meilan International Airport, Aeorema Communications, Meiwa Corp, Rasa Corporation and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62
Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer
Hybridan Small Cap Feast: 23/04/2025
Meiwa Corp (8103 JP): Full-year FY03/25 flash update
Rasa Corporation (3023 JP): Coverage Initiation

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO

By David Blennerhassett

Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

By Osbert Tang, CFA

The change in controlling shareholder at Hainan Meilan International Airport (357 HK) will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.
The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.
The new parent Hainan Airport Infrastructure (600515 CH) can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook.

Hybridan Small Cap Feast: 23/04/2025

By Hybridan

The strategic communications group with offices in London, New York, and Cannes reports a renewed contract with Stagwell (NASDAQ: STGW).
It is to produce SPORT BEACH at the Cannes Lions International Festival of Creativity in June 2025.
The event includes a reimagined structural design, expanded capacity, new interactive elements and new brand partners, and global athletes.

Meiwa Corp (8103 JP): Full-year FY03/25 flash update

FY03/25 revenue was JPY156.7bn (-1.0% YoY), with operating profit JPY3.6bn (+20.1% YoY) and net income JPY3.4bn (+22.6% YoY).
FY03/26 forecast: revenue JPY160.0bn (+2.1% YoY), operating profit JPY3.2bn (-10.3% YoY), net income JPY3.0bn (-11.1% YoY).
Meiwa plans a JPY38.00 per share dividend for FY03/26, down from JPY42.00 in FY03/25.

Rasa Corporation (3023 JP): Coverage Initiation

In FY03/24, Rasa reported revenue of JPY27.9bn (-5.9% YoY), operating profit of JPY2.5bn (-12.5% YoY), recurring profit of JPY2.8bn (-5.6% YoY), and net income attributable to owners of the parent of JPY2.0bn (-5.5% YoY).
Despite higher profit in the Industrial and Construction Machinery business, overall operating profit declined YoY due to lower profit in the Resources and Metallic Materials and Plant and Equipment Engineering businesses.
In FY03/25, the company forecasts revenue of JPY27.7bn (-0.8% YoY), operating profit of JPY2.3bn (-7.9% YoY), recurring profit of JPY2.5bn (-11.2% YoY), and net income attributable to owners of the parent of JPY1.9bn (-4.9% YoY).

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May 02

Daily Brief Consumer: Toyota Industries, Sony Corp, Shinsegae, Kayou, Ebay Inc, Luckin Coffee, Ginebra San Miguel , TVS Motor , Nihon Chouzai and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
SONY (6758) | Going into Earnings
Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung
Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China
Ebay’s Qoo10 Surges on K-Style Boom
[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales
Ginebra San Miguel (GSMI PM) Q1 2025: Steady Pricing Led Growth
TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?
Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid

Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.

SONY (6758) | Going into Earnings

By Mark Chadwick

Content-Driven growth: Strong performance in music and gaming supports Sony’s shift toward high-margin content, insulating it from trade and macro headwinds.
Upcoming catalysts: Spin-off of Sony Financial and potential restructuring could unlock value and address the long-standing conglomerate discount.
Attractive valuation: Trading at 14x EV/EBIT with defensive sector exposure, Sony remains undervalued relative to global peers despite YTD outperformance.

Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung

By Douglas Kim

On 30 April, Lee Myung-Hee (Chairwoman of Shinsegae Group) decided to transfer all of her 10.2% stake in Shinsegae (004170 KS) as a gift to her daughter Chung Yoo-Kyung.
After this gift, Chung Yoo-Kyung’s ownership in Shinsegae will rise from 18.95% to 29.16%.
We are positive on this share transfer of 10.2% stake in Shinsegae from mother (Lee Myung-Hee) to her daughter Chung Yoo-Kyung on the share price impact on Shinsegae.

Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China

By Andrei Zakharov

Kayou Inc., early-mover in the trading card industry in China, filed for an IPO in Hong Kong. The company sells trading cards, toys, figures, badges, pens, and notebooks, among others.
Kayou Inc. received capital of ~$135M from HongShan Capital and Tencent Holdings in 2022. Mr. Li Qibin founded trading card and collectible toy firm in 2011.
Founder led company has delivered 250%+ growth and FCF of $500M+ in 2024. The market opportunity is large enough to support sustained high growth for Kayou for several years.

Ebay’s Qoo10 Surges on K-Style Boom

By Michael Causton

Qoo10 is tiny in comparison to Amazon, Rakuten and Yahoo but it punches well above its weight by specialisation.
The online mall’s focus on Korean cosmetics and lifestyle has given it a depth of loyalty among young women that was once the preserve of Zozo.
Along with its other platform Move, Ebay Japan has built a solid presence in the Japanese market which looks set to continue to expand.

[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales

By Eric Wen

Luckin reported C1Q25 revenue in-line/6% vs. our estimate/consensus, and non-GAAP operating profit 9%/75% higher than our estimate/consensus, thanks to warmer weather and constrained marketing spending;
Despite Luckin pre-emptive lock-ins, rising coffee bean price shall still take its toll as Luckin’s biggest rival Starbucks should be equally capable of managing the commodity price risk.
We keep Luckin as BUY rating but cut TP to US$39.

Ginebra San Miguel (GSMI PM) Q1 2025: Steady Pricing Led Growth

By Sameer Taneja

Ginebra San Miguel (GSMI PM) reported steady growth in Q1 2025, with revenues and profits increasing by 7.6% and 10.8% YoY. Volume/Pricing grew 1%/6.6% YoY as company offset excise-duty increases.
EBITDA margins were maintained at 16.2%, while the company saw a massive increase in cash and investments to 16.2 bn pesos from 12.8 bn pesos, led by working capital inflows.
Trading at 10x PE with 20% of the market cap in cash and investments, and demonstrating pricing power/profit growth of 10-15% CAGR, this is a name to explore.

TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?

By Sreemant Dudhoria

Robust Operating Performance:TVS Motor (TVSL IN) reported 17% YoY revenue growth in Q4FY25 with EBITDA margins at 12.5% (ex-PLI) — stable despite input cost pressures.
EV Momentum & Premium Product Strength: EV sales rose 54% YoY, and TVS continued to gain traction in the premium segment through its Apache and Ntorq models.
Valuation Demands Flawless Execution:At 58x P/E TTM EPS,TVS commands a steep premium over peers.Justifying this requires sustained outperformance in EV adoption, export monetization, and premium product cycles without margin erosion.

Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Sales increased by 5.9% YoY to JPY360.5bn, but operating profit decreased by 31.8% YoY to JPY6.2bn.
Pharmaceutical Manufacturing faced a JPY630mn operating loss due to NHI drug price revisions and manufacturing deficiencies.
FY03/26 forecasts sales of JPY372.8bn (+3.4% YoY) and net income of JPY3.5bn (+151.6% YoY).

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May 02

Daily Brief Health Care: Celltrion Inc, Fujian Lemo IoT Technology, Suzhou Ribo Life Science and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)
Pre-IPO Fujian Lemo IoT Technology – The Outlook for Growth and Profit Margins Is Not Optimistic
Suzhou Ribo Life Science (瑞博生物) Pre-IPO Quick View: Scarcity of SiRNA Player

Alpha Generation Through Share Buybacks in Korea: Bi-Monthly (March and April 2025)

By Douglas Kim

In this insight, we discuss the alpha generation through companies that announced share buybacks in the Korean stock market in March and April 2025.
There were 40 companies in the Korean stock market that announced share buybacks in the past two months. On average, the share buyback announcements represented 1.7% of outstanding shares.
Astute traders should put alert signals on share buyback announcements in Korea with more than 3% outstanding shares.

Pre-IPO Fujian Lemo IoT Technology – The Outlook for Growth and Profit Margins Is Not Optimistic

By Xinyao (Criss) Wang

Lemo increased the number of massage equipment in the cinemas significantly, but the transaction value has reflected its ineffective business expansion. The Company may have already encountered a growth ceiling.
Lemo’s business model requires high occupancy fee and maintenance costs, which is hard to decrease. However, if revenue growth slows down, Lemo’s profits would be “eroded” due to high costs.
In Sep. 2024, valuation of Lemo reached RMB750 million. We think valuation of Lemo could be lower than that of peers in the future due to concerns on the outlook.

Suzhou Ribo Life Science (瑞博生物) Pre-IPO Quick View: Scarcity of SiRNA Player

By Ke Yan, CFA, FRM

Suzhou Ribo Life is looking to raise at least US$100 million via a Hong Kong listing. CICC and Citi are the deal sponsors.
Ribo Life is a world leading company in the area of siRNA research.
The company’s RBD4059 is potentially the first in class siRNA drug for thrombotic diseases.

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May 02

Daily Brief Financials: Banco De Sabadell SA, Strike, Hokkoku Financial Holdings, Japan Investment Adviser Co, SES AI Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Financials

In today’s briefing:

BBVA’s Hostile Offer for Sabadell Moves into Final Phase: The Catalan Conundrum
Strike (6196 JP): 1H FY09/25 flash update
Hokkoku Financial Holdings (7381 JP): Full-year FY03/25 flash update
Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update
SES AI Corp. – MU-0 Shows the Future for SES AI Across Multiple Battery Markets

BBVA’s Hostile Offer for Sabadell Moves into Final Phase: The Catalan Conundrum

By Jesus Rodriguez Aguilar

CNMC approved BBVA’s bid with mild SME lending and branch access commitments. The offer now enters Phase 3, with government review and CNMV filing expected by late Q2 2025.
Sabadell shares trade 6.7% above the offer value, suggesting market expectation of an improved bid or deal failure. The gross spread is negative despite regulatory momentum.
BBVA’s CET1 would drop to 11.99% under current terms. It can raise the cash offer by €0.12–0.17/share and still stay above 11.5%, allowing room to improve the deal.

Strike (6196 JP): 1H FY09/25 flash update

Revenue for FY09/25 was JPY9.0bn, a 3.0% YoY decline, with operating profit at JPY2.4bn, down 34.2%.
Cost of revenue increased 14.2% YoY to JPY3.7bn, driven by higher personnel and referral fees.
Dividend payout ratio target increased to 50%, with annual dividend forecast raised to JPY180.0 per share.

Hokkoku Financial Holdings (7381 JP): Full-year FY03/25 flash update

Consolidated ordinary income decreased by 1.4% YoY to JPY89.6bn, while gross profit increased by 39.3% YoY.
Hokkoku Bank’s core operating profit rose 87.8% YoY, driven by increased net interest income and operating income.
For FY03/26, the company forecasts a 46.4% YoY increase in consolidated ordinary profit to JPY18.0bn.

Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update