Smartkarma Daily Briefs

• Toyota equity affiliate Aisin (7259 JP) last September said it would sell all its crossholdings. That now includes a 36.5% stake in Exedy Corp (7278 JP). 
• Today, they announced an offering of all the shares (when including the greenshoe). That is nearly ¥50bn. That is offset by a ¥15bn buyback which could reduce the offering size.
• Games may be played, but there is considerable accretion, and Exedy will see higher float and still-high net cash.

• After the market close on 27 May, HYBE (352820 KS) announced that it will conduct a block deal sale of 0.75 million to 0.94 million shares of SM Entertainment.
• The block deal sale price discount is 4% to 5.5% discount to the closing price on 27 May (95,800 won). 
• One of the major positive, recent issues facing the Korean K-Pop related stocks has been the potential easing of Korean content restrictions by China.

• Alibaba Group Holding (9988 HK) and JD.com (9618 HK) both announced the issuance of convertible debt last week (Alibaba on May 23 and JD.com on May 21). 
• Both have mentioned that the reasons for the issuance are the low funding cost (0.25% coupon for JD.com and 0.5% for Alibaba) and to fund their current share repurchase program. 
• I think the convertible debt structures makes sense and it is beneficial for both companies to buy back as much as possible at the current share price.

• Aisin (7259 JP) is looking to raise US$290m from selling its entire stake in Exedy Corp (7278 JP).
• While the selldown doesn’t seem to be particularly well-flagged, this appears to be another cross-shareholder unwind in Japan.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• The $2.50/share Exit Offer announced last month seemed fair. Not great, but okay. Best World International (BEST SP)‘s founders Dora Hoan and Doreen Tan have now blinked, and bumped. 
• Terms are S$2.56/share – best & final.  The increase in the Exit Offer price followed “a review of its most recent financial and cash position“. More likely, shareholder pushback.
• Elsewhere, nephews and siblings of Hoan, bought shares just prior to the initial Offer announcement; and have been selling since. Not a great look. 

• In this insight, we provide an early look at the potential additions and deletions to KOSPI200 rebalance in December 2024.
• The seven potential additions are up on average 53.9% from end of 2023. The seven potential deletion candidates are down on average 14.2% YTD. 
• The average market cap of the seven potential additions is 2.2 trillion won. The average market cap of the seven potential deletion candidates is 0.7 trillion won. 

• JD.com, a China-based multinational technology conglomerate, has announced its first-quarter results for 2024 in an earnings call and reported robust profit and revenue growth, along with an encouragingly high Net Promoter Score (NPS).
• The revenue growth was accelerated by strong execution amidst evolving industry dynamics, improved user experience, price competitiveness, and platform ecosystems.
• Importantly, the general merchandise and supermarket category recorded a notable jump in terms of gross merchandise value (GMV) and revenue growth.

• The music industry in the west focuses on speculative assets and bundling services, while in Japan firms have 360-degree deals with artists.
• Amuse, a major player in the Japanese music industry, historically managed the successful band Southern All Stars but has diversified beyond them.
• Despite still having concentration in top acts like Masaharu Fukuyama, Amuse’s business model and intrinsic value are seen as attractive to investors.

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.

• Singapore-based beauty brand Allies of Skin is set to expand into the US after raising a US$20 million funding round from Meaningful Partners.
• This follows the company hitting positive EBITA in 2023, its founder Nicolas Travis told Tech in Asia.
• Allies of Skin, founded in 2016, said the round is its first institutional raise, but it has received private investments in the past – including capital from Crazy Rich Asians star Henry Golding.

• Starts is a high-quality business operating primarily in asset-light CRE services
• The company has the potential to reframe its narrative and increase its share price
• Strong founder and management team with a history of delivering impressive returns on equity

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.