Smartkarma Daily Briefs

• On Monday 27 May, Aisin (7259 JP) announced an offering to sell ALL of its 36+% stake in equity affiliate Exedy Corp (7278 JP) for likely ¥40bn+. 
• Exedy announced a big buyback to go with it. It bought back 30% of the total on Weds morning, and that reduced the size of the offer. 
• I had expected “short-term games” but we haven’t really had them. Which is a bit weird. This update shows the details and dynamics (they differ).

• Antfin will come out of its placement linked lockup for its remaining stake in Zomato soon.
• Ant Group had earlier sold some of its stake in Nov 2023 and Mar 2024. It still has over US$800m worth of shares left to sell.
• In this note, we talk about the deal dynamics and run the deal through our ECM framework.

• Emart and Shinsegae are facing concerns about put options of nearly 1 trillion won on private equity investors’ investment in SSG.com nearly six years ago. 
• From AEP and BRV’s point of views, they want to get their money back through put options since an IPO is not likely in the near term.
• The most probable result appears to be that this is likely to be dragged on for some time, which will cause continued concerns on both Emart and Shinsegae. 

• Sumber Alfaria Trijaya (Alfamart) booked a solid set of 1Q2024 results, a testament to its resilience during an election period, with the seasonal impact of Lebaran. 
• Minimarkets continue to be the winning format in Indonesia and Alfamart continued to gain share during 1Q2024, neck and neck with Salim-backed Indomaret if you include Alfamidi, Lawson, and Dan+Dan. 
• Alfamart will slow store openings to 1,300 stores this year after adding more than 1,800 outlets in 2023, with growth prospects remaining positive and profitability intact with a 25% ROE. 

• With one day left in the review period, we see 4 potential changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the June rebalance.
• Berli Jucker (BJC TB) could be added to the index following the market consultation that lowered the inclusion thresholds for Average Daily Trading Values and Turnover ratios.
• An equally weighted basket of potential adds has outperformed the potential deletes but there has been a deterioration in performance over the last month.

• Ace Hardware Indonesia (ACES IJ) continues to impress both in terms of SSSG and profitability, with numerous initiatives to drive future growth including more regular promotional campaigns and upgraded formats.
• SSSG for 5M2024 is well ahead of full-year guidance with strong growth momentum driven by ongoing campaigns, brighter new concept formats, and successful omnichannel initiatives providing additional growth impetus. 
• Ace Hardware Indonesia remains a top pick amongst Indonesian retailers, with valuations well below historical levels, despite the resurgence of growth and numerous initiatives in place both online and offline. 

• Companies with higher ratings for Corporate Governance Practices (Board Practices and Key Actions) tend to have significantly higher profitability, market capitalization and valuations.
• Foreign ownership has the highest correlation with the Metrical CG score, suggesting that years of overseas investor engagement have improved the companies’ corporate governance practices and profitability.
• The pace of efforts varies with criteria of Corporate Governance Practices.  Companies with Metrical CG scores of over 70% are ahead in % independent directors and % female board members.

• RICK is the largest strip club operator that also owns the struggling restaurant chain, Bombshells
• Strip clubs in RICK’s targeted locations are generally profitable due to limited competition and high barriers to entry
• Tootsie’s, a club owned by RICK, experienced significant revenue and EBITDA growth since its acquisition in 2007, showcasing the company’s ability to generate attractive returns on acquisitions in the strip club industry

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Fosun International
• Lenovo
• Lippo Malls Indonesia Retail Trust
• NTPC Ltd
• Rakuten

• RaaS Research Group has published an update report on 3D spatial data solutions group Pointerra (ASX:3DP) following its share placement to raise $2.05m before costs at $0.033/share.
• We had previously factored in a $2.5m raise into our forecasts in H1 FY25 and have now adjusted our model to include the recent raise in our forecasts.
• Based on our estimates, we don’t expect Pointerra to return to the market for additional equity before it reaches EBITDA break-even (H1 FY25 in our estimates).