Consumer

• Heiwa Corp (6412 JP) got 99% of its revenue as a pachinko/pachislot machinery maker. In 2011, it bought one of Japan’s largest golf course operators, PGM Holdings, from Lone Star. 
• Golf course revenue is up 30% in 10yrs. Pachinko/Pachislot revenue is down by 60+% in the same period. Golf is the bulk of revenue and OP now.
• Today, the company announced a stunning, even monumental acquisition to become the largest golf course operator in the world. 

• PT Daya Intiguna Yasa Tbk (Mr DIY Indonesia) (2517930D IJ) raised US$296m from its Indonesia IPO.
• Mr DIY Indonesia (MRDIYI) is a home improvement retailer. The entity is the Indonesian entity under the Mr DIY group’s list of subsidiaries.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• GM announced it will no longer continue to fund its loss making Cruise subsidiary, effectively ending its RoboTaxi ambition. Market reaction? Nothing.
• Microsoft has already announced it will write off its $800 million investment made back in 2021 when Cruise was valued at $30 billion
• Root cause? The tsunami that was triggered by Cruise’s botched response to an accident in October 2023. 

• The Shanghai Shenzhen CSI 300 Index (SHSZ300 Index) exploded higher in mid-September 2024, then went flat in a range (still there as we write).
• Our models currently see uptrend and downtrend targets positioned at an equal distance from the last WEEKLY CLose on December 13th.
• In short this means that the index is “perfectly neutral” at the moment, a rare scenario that requires straddle and strangle-like strategies to be able to profit.

• China New Higher Education (2001 HK) has rebounded by 40% from its post-result trough but was still down by 34% from the pre-FY24 result level, despite healthy FY24 results.
• Net profit is healthy, but it is the all-scrip final dividends that dragged on the share price. Concerns are on higher gearing, but at 69.9%, this is still acceptable. 
• The consensus earnings forecast of a 6% growth in FY25 and FY26 seems not excessive. At 2.2x PER and 22% yield for FY25, it seems worthy of the risks.

• Travel Food Services Ltd (1450229D IN)  (TFS) is planning to raise about US$236m in its upcoming India IPO. The lead bookrunners for the deal are Kotak, HSBC, ICICI, B&K.
• The company was established in 2009 and operates in the airport travel quick-service restaurant (Travel QSR) and lounge sectors.
• TFS holds a market share of 24% in the Indian airport travel QSR sector based on revenue for FY24, according to CRISIL Report.

• Bloks Group, a founder-led leader in China’s assembly character toy segment, updated its PHIP and continued to post hyper growth.
• In the nine months ended Sep-24, the company’s revenue totaled ~RMB1629m, representing a y/y growth of ~177%, due to significant increase in product sales volume.
• According to the most recent PHIP, Ultraman IP license in China was extended to 2027 and TRANSFORMERS IP license with Hasbro will expire only in 2028.

• The retail landscape in India is witnessing a rapid transformation with the rise of Quick Commerce
• These companies are challenging traditional retail models by combining competitive pricing with the convenience of super-fast deliveries.
• For Dmart, which has long been the leader in value retailing, this shift presents significant challenges to Same Store Sales Growth (SSSG), store expansion plans, and overall valuation.

• We are reiterating our Buy rating, $23 price target and projections for Guess?
• after visiting stores in the Metro New York City and Long Island.
• As we near the heart of Holiday party and event season, Guess?

• The third quarter 2024 earnings results for Macy’s, Inc. present a mixed picture of the company’s financial health and operational strategy.
• On the positive side, Macy’s showed resilience with sales of $4.7 billion, reflecting a decline of only 2.4% from the previous year, aligned with the company’s expectations.
• Notably, the performance of Macy’s First 50 locations exhibited a 1.9% increase in comparable sales, marking three consecutive quarters of growth.

• Today post-close, activist/engagement investor Oasis Management filed a new LSR on Macromill, Inc (3978 JP) owning 7.12% of shares as of 13-Dec-2024. Reason: Defend shareholder value, propose measures to management.
• That is 7.56-7.65% of effective voting/tender rights. It’s big enough to matter. Of course, the stock has not traded below terms once since full trading started post-announcement. 
• And this was warned in CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid. Shareholder structure REALLY matters. 

• DiDi Global (DIDI US) has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.
• Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.
• The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.

• After Goldlion Holdings (533 HK), an apparel manufacturer/distributor, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, from the Tsang family (63.09% stakeholder).  
• And that it’s exactly what unfolded.  The Cancellation Price is $1.5232/share (declared final), a 24.85% premium to last price, but a punchy 71% premium to undisturbed. 
• The long stop is the 30th September 2025. This will probably be completed in less than half the time. There will be a question mark over the low price-to-book multiple. 

• At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.
• Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.
• Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it’s prime for aggressive dividend arbitrage.

• Vishal Mega Mart (VMM) raised around US$950m in its India IPO.
• Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• It is difficult for Fosun Tourism (1992 HK) to return to its peak and IPO share prices over the next two years. The buyback proposal represents a good exit opportunity.
• Net profit is unlikely to go back to FY19 level even in FY26F. The derating of the Chinese equities and Fosun Group, as well as its high gearing, are barriers.
• Its PER multiples have already aligned back to the sector average from the extremely depressed level previously. Relative to global names, it is now only at slight discounts.

• KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2025.
• We expect up to six ADDs and six DELs in the KOSPI 200 index during the June 2025 index rebal event based on the latest available data.

• The disparity between the leading footwear retailers continues to widen.
• ABC Mart is pulling so far ahead that it has the market almost to itself. 
• Chiyoda may have finally turned the corner but G-Foot may need further financial support from Aeon.

• HKTV is a prominent e-commerce platform in Hong Kong facing challenges from the pandemic and retail market.
• Founder Ricky Wong has shown a history of moonshot diversifications and strong leadership from executives like Jelly Zhou, leading to renewed optimism for the company.
• With a low valuation, potential for growth, and Ricky Wong’s history of successful ventures, HKTV could be a lucrative investment opportunity in the future.

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.

• Mission Produce Produce buys, ages, packages, and distributes avocados through facilities in the US, Canada, Mexico, and the UK with around 1,000 suppliers
• Majority of avocado volume sourced from Mexico, California, and Peru, with top 10 customers accounting for 60% of sales
• Company considered low-quality, volatile business with minimal cash flow generation and projected lower earnings in F2025, overpriced based on normalized earnings estimates

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.

• KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.
• This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.
• Even after Thursday’s rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.

• In this insight, we provide a list of 70 prominent companies in Asia that could complete their IPOs in Asia next year. 
• This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in Asia in 2025.
• Some of the most prominent potential IPOs in Asia next year include Reliance Jio, LG Electronics India, Shein, Sony Financial Group, Didi Global, and Okada Manila.

• Both HSI and HSCEI show characteristics of being short gamma at higher strikes highlighted by Mondays pop in spot and vol in both markets.
• Implied vol did a complete round-trip closing virtually unchanged from last week despite spot holding on to modest gains on the week and large high – low range.
• Up-Strike Calls look to have been added in both markets which will help maintain the positive spot vol correlation.

• Signet Jewelers’ third quarter fiscal 2025 earnings report presents a nuanced outlook on the company’s current standing and its future trajectory.
• The company has demonstrated a mixed performance, showing improvements in certain areas while encountering challenges in others.
• One of the notable positives from the report is Signet’s continued sales momentum, as indicated by the sixth consecutive quarter of sequential same-store sales improvement, despite an overall decline of 0.7% in same store sales.

• Wayfair has 4k primary customers and multiple brands under their umbrella
• Their business model involves offering a wide selection of furniture and home goods at competitive prices
• Wayfair is positioned to benefit from current market conditions and has potential for growth and profitability in the coming years

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.

• In this insight we chart the progress of China’s tourism recovery vs pre-pandemic levels
• In October 2024, Chinese outbound (international) demand finally reached pre-Covid levels
• The recovery in domestic activity was completed earlier and more quickly than outbound

Borussia Dortmund is one of the leading football clubs in Europe, with a strong track record in its domestic league, which has enabled it to feature regularly in Europe’s leading club competitions. Its relatively consistent success and, therefore, high level of media exposure means it is well positioned to benefit from structural growth drivers such as increasing global interest in football, which will support the growth of its multiple revenue streams. Perhaps most importantly, the club’s sporting success has been achieved with low levels of investment versus its peers, which reflects management’s financial prudence.

• Neutral view on recent deal: In the short term, it may pose downside risk of 2.8% and 1.1% to the 2025-26E profit forecasts due to an immediate increase in interest expenses from higher debt.
• However, revenue generation is expected to begin in 2Q26E. Medium-term risks may arise from intensified competition in the same area, but the long-term prospects are positive for CPAXT, as the project could provide stable income if executed as planned.
• Maintain a Neutral recommendation: The valuation metrics reflect a neutral view on the current fundamentals (the stock price sees 2.4% downside risk from its fair value) and the long- term growth prospects (profit growth expected at a 14% CAGR over the next two years). 

• We are reiterating our Buy rating, projections and $5.50 price target for Vera Bradley after visiting main line and outlet stores in Connecticut and Long Island.
• We believe, with an emphasis on key price points, compelling sale items and a focus on winning collaborations (Wicked and Disney), Vera Bradley is well positioned to drive gifting purchases for Xmas shoppers and, continue to attract curious customers attracted to the company’s Project Restoration driven new offerings and looks.
• Given low expectations and solid pricing power, we believe there remains some upside to 4Q and we reiterate our Buy rating and $5.50 price target for BBW.

• Fosun Tourism has emerged from its difficulties and started an upward trend.If it remains listed, it’s only a matter of time before its share price returns to the IPO price.
• Temasek was once in talks to buy a minority stake in Club Med from Fosun International for €500 million, based on which reasonable valuation for Fosun Tourism is RMB12.6 billion.
• Fosun has continued its style- When performance recovery hasn’t been reflected in stock price, it’s the right time to privatize valuable assets at cheap price. A share alternative is expected.

• Management of China Tobacco International (HK) (6055 HK) is bullish on earnings in the next two years, with tobacco leaf import and cigarette export being the key drivers.
• Elevated tobacco leaf price is positive to CTI while more re-opening of duty-free shops (currently only 50% of pre-COVID level) will add to revenue momentum.
• A light gearing of just 2% and potentially more parent asset injection are CTI’s strengths. The company plans to maintain a steady uptrend on absolute DPS annually. 

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.
• On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.

• We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
• We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
• We summarize some updates for our top year-end picks: DigiPlus Interactive (PLUS PM), Ginebra San Miguel (GSMI PM), and The Keepers Holdings (KEEPR PM) 

• Repurchasing investment units, increasing dividends through property sales, and increasing EPS through negative goodwill of M&A seem to be the share price raising measures necessary for capital increase for growth.
• When increasing capital amid stagnated REIT stock prices, it’s questionable whether the picture that is drawn after capital increase is reasonable in the face of rising required returns by investors.
• When the profitability of REIT investment companies is in question, it is not surprising that activist investors will focus on management issues, including cost of capital or corporate governance.

• Alibaba Group’s September Quarter 2024 results reveal a balance of positive developments and ongoing challenges.
• The company has shown resilience in its core business segments, leveraging an AI-driven strategy to enhance user engagement and operational efficiency.
• Steady growth has been noted in both domestic and international e-commerce segments, with Alibaba International Digital Commerce recording a substantial 29% revenue growth.

• Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
• The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
• China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.

• Restaurant Brands International’s (RBI) Q3 2024 earnings show a nuanced performance across its diverse portfolio, which includes brands like Tim Hortons, Burger King, Popeyes, and Firehouse Subs.
• The company navigated a challenging macroeconomic landscape, yet managed to exhibit both stability and strategic growth in certain areas.
• The company reported flat comparable sales growth at 0.3%, alongside a net restaurant growth of 3.8%, culminating in a system-wide sales growth of 3.2%.

• Arcos Dorados Holdings, the world’s largest independent McDonald’s franchisee, reported its third quarter 2024 results showcasing both strengths and challenges.
• The quarter revealed resilience in Arcos Dorados’ business model with strong sales driven by its digital platforms and off-premise channels such as delivery and drive-thru.
• However, the company’s performance also faced hurdles due to economic conditions and currency devaluations.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Kioxia Holdings (285A JP) priced its IPO at JPY1,455, the midpoint of the IPO price range.
• Event-Driven developments: Fosun Tourism (1992 HK), CPMC Holdings (906 HK), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Topcon Corp (7732 JP), Insignia Financial (IFL AU). 

• Lululemon Athletica Inc. reported its third-quarter results for fiscal 2024, revealing both strengths and challenges within its business operations.
• The company’s revenue grew by 9% (8% in constant currency), reaching $2.4 billion.
• This growth was primarily propelled by substantial gains in international markets, particularly China, Mainland, which saw an impressive increase of 39% (36% in constant currency).

• Ulta Beauty’s third quarter of fiscal 2024 results displayed both strengths and challenges reflective of the broader and highly competitive beauty market dynamics.
• The company’s net sales saw a modest increase of 1.7%, reaching $2.5 billion, with comparable sales inching up by 0.6%, demonstrating a slight improvement compared to prior periods.
• The growth in sales was accompanied by a 1.4% rise in diluted earnings per share, reaching $5.14, reflecting disciplined financial management despite ongoing market headwinds.

• Brown-Forman has reported its financial results for the first half of the fiscal year 2025, accompanied by a strategic update on its executive leadership transition.
• The company’s reported net sales showed a decline of 5%, while organic net sales remained consistent when adjusting for divestitures and foreign exchange impacts.
• Despite these mixed results, Brown-Forman maintains its fiscal year guidance for organic net sales and operating income growth.

• Dollar General’s third quarter results for fiscal 2024 present a mixed picture of operational resilience amid challenging external conditions and internal initiatives aimed at enhancing financial and operational metrics.
• The company’s performance during the quarter was impacted by several hurricanes in the Southeast, which the management noted as significant in terms of employee deployment and store operations, though the overall sales impact was minimal.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Foot Locker’s third-quarter financial performance fell short of the company’s expectations, resulting in a more conservative full-year outlook.
• The company reported a modest increase in comparable sales of 2.4% for the quarter, driven primarily by gains in Foot Locker and Kids Foot Locker banners, along with a return to positive territory for Champs Sports and WSS banners.
• However, this progress did not translate as strongly as anticipated into overall sales growth, leading to an adjustment in earnings guidance.

• Exedy Corp (7278 JP) announced an offering of 36% of its shares at end-May. Long-time “owner” Aisin (7259 JP) was getting out. Since then, the company has bought back shares.
• Activist Murakami Group has bought 27% of the company. Between Murakami and the buyback, the public has net sold 5% of the company since end-March. Kinda shocking.
• There is another 35% of Max Real World Float to buy back, and at current pace, they’ll be done by mid-March 2025. Then what? That’s the really big question.

• Vesync (2148 HK), a manufacturer of small home appliance, is currently suspended pursuant to the Takeovers Code. 
• FY23 was Vesync’s best result since its December 2020 listing; and FY24E is on track to go one better.  Yet the share price is 24% adrift of the IPO price.
• The Yang family, led by chairman/CEO, control ~69.26% of Vesync. An Offer price around the IPO price may be enough to take Vesync private.

• A recent meeting with Global Digital Niaga (BELI IJ) looking at its longer-term strategy confirmed its differentiated standing, with a keen focus on an omnichannel strategy across key verticals.
• The restructuring of its 1P business is yielding positive returns and higher margins, whilst its 3P business is being driven by strong performance from tiket.com, with offline stores performing well.
• BELI recently opened a new 100,000 sqm distribution centre, which will further underpin its logistics excellence and improve delivery times even further. Valuations are attractive with profitability ahead in FY2025.

• JD.com is a profitable Chinese e-commerce company trading below its cash value
• Despite challenges in China’s retail market and competition from rivals, JD.com offers a potential 2x-3x upside over the next two years
• Stock has fallen approximately 20% since last write-up, presenting a good opportunity for 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.

• 79% of ELTs consumed by end-use markets, up 10.5%
• Tire-derived fuel tops ELT use, followed by ground rubber
• Sumitomo Rubber USA announces closing of Buffalo plant

• From FY3/2027, companies with market capitalization of over 3 trillion yen will be required to disclose GHG sequentially. 76% of companies with market capitalization of over 500 billion yen disclose.
• A guarantee program is scheduled to be introduced in FY3/2028, but only 21% of companies with market capitalization of over 500 billion yen have disclosed their guarantees.
• The guarantee program will begin in Scope 1 and 2 with limited guarantees. Disclosure of guarantees will increase once the discussion on qualification system for guarantee service providers is finalized.

• Culp posted another tough quarter (1), as industry conditions remain challenged.
• The firm posted an adjusted EPS loss of $0.28, $0.10 below our estimate and $0.09 below the prior year on weaker-than-expected earnings.
• As we said in our update after the release, this shortfall may have been unexpected, but it’s certainly not surprising to anyone who has been following the space. 

• Media Concierge’s £0.23/share offer for National World represents a 9.5% upside, with shareholder approval likely guaranteed.
• Antitrust risk is negligible due to Media Concierge’s focus on Irish newspapers and NWOR’s exclusive UK operations.
• NWOR’s valuation is challenging due to lack of local peers and varying global newspaper company valuation ranges.

• The GIG economy has been viewed as a disruptor to the direct selling channel with respect to the business opportunity.
• However, GIG concepts are top-down, have a specific formula, and assign tasks to their independent contractors for a fee, while direct sellers are micro-entrepreneurs who find a way to build their own businesses.
• Herbalife has been successful in taking some of the best business models developed by distributors at a local level, and then globalizing them, such as. the Nutrition Clubs that arose in Mexico in the early 2000s.

• Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
• The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
• We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.

• Chevron Corporation’s third-quarter 2024 financial results demonstrated a mixture of positive operational achievements and financial headwinds.
• The company reported earnings of $4.5 billion or $2.48 per share, with adjusted earnings similarly at $4.5 billion or $2.51 per share.
• Despite these substantial earnings, this marked a decrease from the prior year largely due to lower liquids realizations and increased depreciation, depletion, and amortization (DD&A), particularly at the Tengizchevroil (TCO) project in Kazakhstan.

• Yum!
• Brands’ recent earnings provide a snapshot of both strengths and challenges faced by the company in the third quarter of its 2024 fiscal year.
• The company demonstrated resilience through its geographic and brand diversification, although certain macroeconomic and geopolitical headwinds impacted its performance globally.

• Macy’s Inc. has been in the spotlight recently as Barington Capital disclosed a stake in the iconic department store chain, pushing for a series of strategic changes aimed at enhancing shareholder value.
• This follows a history of activist investor interest in Macy’s, reflecting its ongoing struggles in a challenging retail environment.
• While Macy’s management has reaffirmed its commitment to its “A Bold New Chapter” turnaround plan, Barington’s proposals focus on optimizing real estate assets, cutting capital expenditures, and exploring strategic alternatives for its premium brands, Bloomingdale’s and Bluemercury.

• Tripadvisor’s third-quarter 2024 results present a mixed picture of the company’s performance and strategic direction.
• On a consolidated basis, revenue was $532 million, essentially flat compared to the previous year.
• This stagnation in revenue reflects headwinds in Tripadvisor’s legacy hotel meta offering, which declined 17% year-over-year in branded hotels revenue.

• The confectionery industry was abuzz recently as news broke that Mondelez International (MDLZ) had approached Hershey (HSY) about a potential acquisition.
• Hershey’s stock surged by 14%, reflecting investors’ optimism about the possibility of a $50 billion industry giant emerging.
• While neither company confirmed the rumors, the timing is intriguing.

• The financial data for 2024 has already shown investors weak growth signal.After IPO, Xiaocaiyuan may face stricter scrutiny from investors and the market in terms of its sustainable performance growth.
• It’s not easy for Xiaocaiyuan to find new growth points. Catering companies commonly face problems such as performance fluctuations and uncertain profitability, which has left their share price underperforming.
• Post investment valuation has already reached RMB10 billion, which far exceeds the market value of A-share peers. Due to concerns on the outlook, valuation performance after IPO could be lower-than-expected.

• India’s ethanol policy is driving increasing corn demand both locally and for imports
• India’s corn production is estimated to be around 38 million for the next year
• India primarily imports non-GMO corn from Myanmar and Ukraine for their ethanol industry, facing challenges in meeting the demand due to feedstock tightness and high import duties

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Walgreens Boots Alliance (WBA), a well-known retail pharmacy giant, has been making headlines due to potential buyout discussions with Sycamore Partners, a private equity firm.
• Walgreens’ shares surged after reports surfaced about these ongoing talks.
• This comes amid a challenging business environment marked by margin pressures from pharmacy benefit managers (PBMs), store closures, and rising operating costs.

• Ingredion Incorporated’s third-quarter financial performance in 2024 highlights several key developments, showcasing both strengths and challenges that the company faces.
• The company achieved a milestone with a 29% increase in adjusted operating income, marking this quarter as the best third-quarter performance in its history.
• This growth was largely attributed to double-digit operating income growth across all three segments, driven by operational excellence and strategic contract management, despite ongoing inflationary pressures.

• Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.
• Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday’s ruling on the merger of grocery giants Kroger and Albertsons.
• The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.

• There are 19 changes a side for the Nifty200 Momentum30 Index that will be implemented at the close on 30 December. All names are exactly in line with our forecast.
• Estimated one-way turnover is 64.9% resulting in a one-way trade of INR 72.7bn (US$857m). There are 18 stocks with over 1x ADV to trade.
• The adds have continued to outperform the deletes even after the end of the review period. There could be further upside heading into year-end and implementation of the changes.

• LG Electronics India (123D IN) is looking to list on the exchanges by selling 101.8m shares at a valuation of around US$12-13bn and raising around US$1.8bn in its IPO.
• The draft RHP was filed on 6 December, so the IPO could complete in the first quarter of 2025.
• The stock will not get Fast Entry to global indices. Inclusion at regular rebalances could commence in June/September next year depending on when the stock lists.

• Inditex’s rare quarterly miss on sales and profit, driven by currency fluctuations, may heighten sensitivity around Fast Retailing’s upcoming Q1 results
• For Fast, the risk would be a top-line miss given high valuation multiples and elevated expectations
• Over the past several quarters, Fast’s superior top line growth has supported higher valuation multiples. We expect 9% revenue growth in Q1

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We provide updates on results for our HK-listed universe and highlights from our recent management visits to Hong Kong. 

• REPT BATTERO Energy raised around US$270m in its Hong Kong IPO in Dec 2023. Its pre-IPO investors holding around US$1.2bn worth of shares will be released from their lockup soon.
• REPT is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
• In this note, we will talk about the lockup dynamics and possible placement.

• Vishal Mega Mart (1620871D IN) IPO worth INR 80 bn is about to open this week. The IPO constitutes entirely of OFS. 
• The company is one of the top 3 offline first retailers, the most diversified retailers and caters to middle income and lower income group, largely in Tier 2 locations. 
• As far as forensics are concerned, one must pay attention to exorbitantly high attrition levels, rising related party transactions, few puzzling line items noticed in books, etc.

• Pou Sheng, the second-largest sporting goods retailer in China, is facing challenges like declining sales
• The company is trading at an undervalued price with a negative EV but remains profitable
• Despite concerns about China’s geopolitical situation and low cash returns, Pou Sheng offers a high dividend yield and has a strong balance sheet with significant net tangible asset value, indicating potential for upside if sales performance improves.

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.

• One year has passed since the disclosure of sustainability information in annual securities reports, and the FSA is considering restructuring its disclosure guidelines to support sustainability disclosure by listed companies.
• Sustainability information in annual securities reports is shifting from “what should be stated” to “what content should be stated,” and the volume of information is increasing accordingly.
• Valuable information is that investors can understand what initiatives the company has implemented to address the challenges, the goals and timelines it has set, and whether its progress is justified.

• RaaS is initiating coverage of media group GTN (ASX:GTN) with a base peer EV/EBITDA-derived valuation of $0.81/share, representing potential capital upside of 40% from the current share price, although we suggest premiums of 10% and 20% to the peer average are justified based on GTN’s superior metrics.
• • GTN has seen improved adjusted EBITDA across FY23 (+13.5%) and FY24 (+15%) but the utilisation rate of advertising spots is still below pre-pandemic levels.
• We believe further improvements in utilisation together with some stock-specific cost reductions will drive EBITDA 31% higher in FY25, placing the group on very attractive multiples relative to peers.

• Fosun Tourism (1992 HK) disclosed a share buyback of the company through a scheme of arrangement at HK$7.80, a 95.0% premium to the last close price of HK$4.00. 
• The key condition is the scheme be approved by at least 75% of disinterested shareholders (rejection by <10% of disinterested shareholders).
• The timing is arguably opportunistic, as the shares are down 31% YTD. Nevertheless, the high takeover premium and a potential scrip option lower the vote risk.    

• When Fosun Tourism (1992 HK), a leisure-focused integrated tourism group, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, was Fosun International (656 HK)
• Not quite. We do have a Scheme, but it’s being enacted by way of a buyback. Fosun Int’l still abstains from voting, but will control 100% if the Scheme completes.
• The Cancellation Price is $7.80/share (not declared final), a punchy 95% premium to undisturbed. I previously speculated a 100% premium was not out of the question.  Clean deal.

• Vishal Mega Mart (1620871D IN) is looking to list on the exchanges by selling INR 80bn (US$943m) of stock at a valuation of INR 352bn (US$4.15bn).
• Anchor allocations were completed on 10 December, the IPO opens today, and the stock is expected to start trading on 18 December. Grey market premium is around 25%.
• The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and June 2025.

• For the first time in 2024, Prosus NV (PRX NA) lodges a substantial shareholder notice,  as its stake in Tencent (700 HK) dips below 24%. 
• Preceding my comments on Prosus, Tencent and Naspers (NPN SJ), are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Geely’s sales volume grew by 27% YoY in November 2024.
• BEV delivery growth rate accelerated to 173% YoY in November from 26% YoY in July.
• Geely’s forward financial ratios are lower than its major competitors.

• Popular Vehicles and Services (PVSL IN) are available at a 50% discount since IPO and available at 25%
• PVSL plans to enter two new states by June 2025 and open multiple new facilities, including a NEXA Studio and service centers in Maharashtra and Kerala.
• PVSL’s focus on geographic expansion, high-margin segments, and inventory normalization enhances its growth potential, making it a compelling value play with room for significant re-rating in the near future.

• SEAT is a leading online secondary ticket marketplace for live events with a strong market share and over 290K unique events sold in 2023
• The company’s asset light model allows for high cash flow generation with forecasted growth in Marketplace, Revenue, and Adjusted EBITDA
• Industry fundamentals are promising with strong consumer demand for live events, last-minute ticket purchases, and increasing average order sizes, along with a growing interest in experiential events post-Covid.

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.

• We are reiterating our Buy rating, estimates and $58 price target after visiting the Build-A-Bear X Hello Kitty and Friends Workshop pop up store in the Westfield Century City shopping center in Los Angeles.
• We believe the collaboration, which opened November 15th, highlights the ability of both brands to offer a compelling and unique retail experience that, with exclusive offerings and a beautiful and exciting store for every Sanrio fan, can help drive material returns and register strong operating margins at the store level for Build-A-Bear.
• We believe this collaboration also amply demonstrates the ability of Build-A-Bear to leverage their unique experiential store offerings and strong family of licensed products to create compelling, high margin retail stores.

• Savencia Fromage & Dairy generated €6.8 billion in net sales in 2023, ranking it among the top five dairy companies worldwide
• The company remains relatively unknown to institutional investors despite its strong financial performance and defensive nature
• With an attractive valuation, including a low EV/EBITDA ratio and high free cash flow yield, the stock is trading at a 15-year low, making it a potential opportunity for 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.

• Viomi has undergone a radical transformation to shed unprofitable business lines and focus on the home water systems market which is poised to experience steady growth in China in coming years.
• The company is hoping to expand into fairly mature international markets including the US with new home water systems that offer advantages over current offerings.
• The company’s investment in a largely automated manufacturing facility should help the company achieve above average margins in the Chinese market as utilization rates improve.

• BYD’s deliveries grew by 68% YoY in November 2024, which provides a positive signal for the whole NEV (New Energy Vehicle) industry.
• In November, Seres’ sales volume increased by 27% YoY with NEV up by 55% YoY.
• Arawana, the top cooking oil producer, finished acquiring 11% of Lihua’s stock.

• The Sanrio (8136 JP) placement is likely to be priced today. With the stock 8.8% lower from undisturbed, expect a small discount to today’s close.
• The stock has traded as expected over the last 9 trading days – a sharp drop followed by a strong upward move and then profit taking.
• We expect there will be strong interest in the placement and oversubscription could lead to upside from here. Shorts have increased and will look to cover into the placement.

• Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
• Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO.
• Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

• LG Electronics India is getting ready to complete an IPO in India in the next several months. The IPO offering size is expected to be about US$1.8 billion.
• LG Electronics (066570 KS) plans to sell 101.8 million shares, accounting for about 15% of the post-offer paid up equity capital shares of LG Electronics India.
• If LGEI is valued at US$13 billion, then an 85% of this stake would be worth US$11.1 billion, which would be worth more than LG Electronics’s own market cap. 

• Trent Ltd (TRENT IN) is best positioned to capitalize on the growing market for lab-grown diamonds (LGD) and alter its business growth trajectory.
• LGD disruptions seen in other markets are unlikely to be seen in India due to the positioning of Jewellery in Household asset allocation. 
• We also believe that Trent Ltd (TRENT IN)  LGD potential is underrated while the impact on Titan Co Ltd (TTAN IN)  is overrated.

• Sarimelati Kencana PT (PZZA IJ) has been hard hit over the last year by the impact of the boycott due to a perception of its Israel exposure. 
• The company has focused on reducing its cost base over the past year and continued to build its higher-end Ristorante format, with the boycott impact lessening since June 2024.
• PZZA management maintains that it can hit profitability in 4Q2024, with this momentum continuing into 2025, with a target to increase its new formats helping to drive recovery. 

• LG Electronics (066570 KS) is looking to raise US$1.5bn+ via part-selling its stake in LG Electronics India IPO. The deal will be run by MS, JPM, Axis, BofA and Citi.
• LG Electronics India (LGEI) was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume in 1Q25, as per Redseer Report.
• LGEI has been the number one player in this industry for 13 consecutive years (CY11-CY23) as per the value market share in the offline channel in India, as per Redseer.

• We are reiterating our Buy rating, $40 price target and projections for JAKKS Pacific after meeting with company management.
• We believe, with easy 1H2025 comparisons, the initial strength of the Moana 2 premiere, a continued focus on key emerging growth drivers (international, ABG collaboration) and basic blocking and tackling, JAKKS is well positioned to continue to drive upside.
• Further, with the company debt free and registering material free cash flow, there remains opportunities to return capital to investors.

• We met with the management of Dream International (1126 HK) on our trip to Hong Kong and summarize our major takeaways. 
• The Plush Toy segment continues to experience growth driven by Disney revenues, but the Plastic Toys segment continues to be plagued by destocking. 
• Despite a 15% YoY earnings decline on our numbers, the stock trades at 5x FY24 PE with an 11.0% dividend yield and 40% of the market cap in net cash.