Consumer

• According to public news two days ago, COFCO Group is rumored to be a potential suitor for Alibaba’s 78% stake in Sun Art Retail (6808 HK).
• Alibaba wants to eventually get rid of the Sun Art stake, especially after Alibaba’s management change in late 2023.  
• Given limited downside, I believe it is worth a bet on the uncertain timeline but certain intention of the eventual divestiture of Sun Art by Alibaba.

• Cisarua Mountain Dairy (CMRY IJ) held an analyst call after its results, revealing a positive outlook for dairy products and premium consumer foods, with potentially higher margins ahead.
• The company launched several new products in 2023, with more of a focus on affordability through yoghurt sticks. It will launch more affordable Kanzler Singles in 2H2024.
• Cisarua Mountain Dairy will expand distribution through general trade and Miss Cimory MCM, with ongoing sales & marketing spending. Valuations remain attractive relative to growth and returns. 

• Snow Peak agreement with Bain Capital to take the outdoor brand private next month seems to have been in the works for a couple of years. 
• Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas instead.
• Even so, the MBO price looks cheap. Snow Peak is likely to see a rebound in domestic sales in FY2024 and its plans for overseas expansion are solid.

• Trial Holdings (5882 JP) (TH) raised around US$259m after pricing its IPO at the top-end in its Japan IPO.
• TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
• We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

• LIFULL reported an 8% increase in net sales to ¥8.1 bn, driven by overseas acquisitions made during the second quarter of the previous FY.
• OP from comparable operations remained steady at around ¥0.15bn. In the previous year, the company recorded an operating profit of ¥0.8bn, but this included ¥0.66bn in profits from the sale of Rakuten LIFULL STAY, a hotel and lodging platform operator, in October of 2022.
• In the current term, the company recorded a net loss of ¥0.05bn, but this included about ¥0.2bn in one-off costs for the transition to a new management structure in the overseas business. 

• Taste Gourmet (8371 HK) will report its FY24 results in the third week of June. We estimate revenue/earnings growth of 38%/40% YoY. 
• We expect the company to end FY24 with >180 mn HKD of net cash on the balance sheet, representing 32% of the mkt cap (9MFY23 cash 148 mn HKD)
• Maintaining a 50% dividend payout ratio, we expect the company to declare a final DPS of 7 cents ( H1FY24 5.5 cents HKD), representing an 8.5% yield for FY24

• Chinese stocks feel like loaded springs to me now. I have played this so far by buying DADA at $1.50 (I think I posted it at $1.67 ish) and closed it with a very nice profit at $2.6ish.
• I did buy RERE at $1.15 and sold my last shares at $1.85. Unfortunately I was too late to post a write-up as I got reporting dates confused.
• But maybe we get to have another go at this one. I had DQ on my watch list, I expected negative earnings, but their report was slightly better than expected and shares jumped from $18 to nearly $30 in a few weeks. 

• Tongcheng Travel Holdings (780 HK) has a solid FY23 and 4Q23 with massive net profit recovery. Earnings momentum for FY24 and FY25 look to stay impressive.
• FY23 is a record year of profit, demonstrating its ability to gain market share after COVID-19 disruption. Further volume growth will lead to better operating leverage.
• Net cash reached Rmb2.3bn, up 90.4% YoY, showcasing its cash-generating ability. The first-time dividend payout also reflected management’s confidence on the outlook.

• Recent newsflow suggests positive developments bode well for Meituan’s fundamental.
• Yet 50% share price rebound since February low means it is largely in price and 4Q23 results will serve as a window for investors to read 2024 outlook.
• We would take some profits from the rally and wait for better entry points.

• This is our first report on American Express Global Business Travel (GBT).
• The company recently released Q4 2023 earnings.
• On a positive note, the company delivered impressive financial results, with standout numbers including 24% year-over-year revenue growth and a roughly fourfold increase in adjusted EBITDA. Paul Abbott, CEO, attributed this strong performance to share gains and a focus on margin expansion.

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
• In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELETEs.

• This is our first report on ed-tech major, Coursera.
• The company had a successful fourth quarter, marking a strong close to the year.
• The company welcomed 24 million new learners in this period, bringing their base to more than 140 million and seeing an increase in annual revenue of 21% over the previous year.

• Southern Cross Media (SXL AU) is re-engaging with ARN Media (A1N AU)/Anchorage at A$0.296 cash per share and 0.870 A1N shares per SXL share. Eligible shareholders get franking credits worth A$0.127.
• SXL’s re-engagement was driven by major shareholders, who are also supporting a motion to remove Mr Rob Murray as chairman due to the glacial pace of negotiation.
• While the offer is light compared to long-term adjusted exchange ratios and historical prices, large shareholders are supportive. Shares are trading through terms due to the large franking credits.  

• 99 Speed Mart Retail Holdings (99SPD MK) is looking to raise around US$300m in its upcoming Malaysia IPO. The bookrunner on the deal is CIMB Investment Bank Berhad.
• 99 Speed Mart Holdings (99 Speedmart) operates the “99 Speedmart” chain of mini-market outlets, retailing daily necessities across Malaysia.
• Based on IMR, the firm was the largest mini-market player and a leading groceries retailer in Malaysia, with a market share of 37.9% and 11.1% based on 2022 sales, respectively.

• Neither Elliot nor JD.com (9618 HK) intend to pursue Currys PLC (CURY LN) at this stage and thus won’t be able to present an offer for the next six months.
• Currys has issued an upbeat trading update. My new TP is 78p/share, >16% above Elliot’s sweetened offer, 10.4x 24e P/E vs 7.6x currently, and 9.1x 25e P/E vs 6.6x currently.
• My TP implied equity value is 864 million. I believe the Board and top shareholders would be willing to consider offers around 80p.

• A liquid proxy for China’s recovering consumption (with no technology regulation risk)
• A quality red chip company at a very reasonable valuation
• Growing sales and margins as its premiumisation strategy is executed

• Viator offers a wide range of unique activities and tours around the world
• The Fork allows users to book tables at restaurants globally
• TripAdvisor remains a key player in the travel industry with an undervalued stock, presenting an attractive investment opportunity

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.

Borussia Dortmund’s first team was successful in progressing through to quarter finals of the Champions League, which naturally leads to an upgrade in profit guidance for the year, as reaching the ‘round of 16’ was in prior guidance. This follows confirmation that the first team will compete in the revamped FIFA Club World Cup to be played in the summer of 2025, which is likely to be significant for financial results and very helpful in the long-term development of the brand and fanbase.

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.

• China Vanke
• Nickel Industries

• This is our first report on mobile game developer, Playtika Holding Corp’s fourth-quarter 2023 earnings showcased a resilient execution of its strategy amidst revenue headwinds and market challenges.
• It successfully managed to surpass its guidance for both revenue and credit adjusted EBITDA. The company marked 2023 as an efficiency-driven year, with a transformation strategy focusing on speed and decision-making.
• Despite several challenges on the revenue front, Playtika identified some bright spots such as growth in the casual games segment, which expanded 5.5% YoY, driven by growth in June’s Journey.

• Fast Retailing (9983 JP) is the largest weight in the Nikkei 225. On Friday, it closed at 11.36% of the Nikkei 225, putting it well above the 10% cap level.
• If the stock is above 10% on a pro-forma basis on the base date of 31 July 2024, it will get a capping coefficient. 2.8mm shares (US$2.5bn) to sell.
• At Friday’s close, we were borderline above a double-downweight trigger. At Monday’s open, just below. 30mins later? Back well above. Lots of interesting issues and nuances here for a short.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, Hong Kong appears to be heading towards its first US$100m+ IPO for the year.
• For placements, after a flurry of placements in the prior week, past week was relatively quiet with only the US$2bn ITC Ltd (ITC IN) block.

• TCL Electronics Limited (1070.HK ) (“TCL”), with a market cap of HKD 7.57 billion (USD 968 million), is not your ordinary Chinese TV manufacturer.
• TCL focuses on mid-to-high end audio/video products like miniLED, QLED, Android, and smart TVs, ranking second in the global TV market behind Samsung.
• The Company also produces air conditioners, refrigerators, smartphones, tablets, and smart home devices. A recent catch-up with the IR team at TCL’s Shenzhen Industrial Park Headquarters intrigued us and we decided to dig a bit deeper.

• Hershey stock trading at 52-week low, making it attractive investment opportunity
• Drop in 10-year treasury yield making dividend-paying companies like Hershey more appealing to investors
• Challenges from new weight loss drugs affecting consumer appetite, but temporary dip creating discounted buying opportunity for strong brand

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.

• Great Wall Motor denied that many employees have resigned recently, but there many complaints from employees on social media.
• Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%.
• Weibo’s advertising revenue decreased, while most companies’ ad revenues have recovered.

• Most companies with large market capitalization (i.e., those with a high ratio of foreign shareholders) already disclose their financial statements, timely disclosure materials, and convocation notices in English.
• Disclosure in English of corporate governance reports and annual securities reports, which have lagged behind, is gradually increasing among companies with large market capitalization.
• Similar to the results of the recent disclosure regarding the ”TSE’s request”, there is also a difference in the disclosure stance between companies with large market capitalization and other companies.

• This is our first report on Cable One.
• The balancing growth strategy of the company indicated the progress during the fourth quarter of 2023, as the company reported customer growth driven by improvement in new connects year-over-year and sustained low churn rates.
• Focusing on specific new customer segments and adjusted market approach, the company has re-engineered its go-to-market approach to counter competition and expand network footprint.

• Naspers and Prosus continue to come under pressure relative to their underlying holdings.
• Since our last update on the 1st of March, Naspers’ look through discount has widened by 1.6 percentage points to 42%. 
• Naspers’ discount to Prosus’ market value has widened notably by 2.1 percentage points to 11.3%. Prosus’ discount is only 30bps wider and is trading at 35.4%.

• Toyota Motor Corporation continues to deliver robust financial performance despite a myriad of challenges.
• In the fiscal year 2024 second-quarter results, the Japanese automotive giant reported an operating income of JPY 2,559.2 billion.
• This was a significant increase compared to the same period of the previous fiscal year.

• Carvana has seen a big increase in its stock price despite concerns over bankruptcy that did not come to fruition
• The company has advantages in unit economics and is well-positioned to gain market share in the auto retail industry
• Carvana offers competitive pricing, quality, convenience, and selection, making it an attractive option for customers and investors alike

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.

• Carnival Corporation’s latest earnings suggest an optimistic outlook for the company as it reports setting records in all four quarters of 2023, with revenues, booking levels, and customer deposits seeing an all-time high.
• Encouragingly, both North American and European brand occupancy levels exceeded 101% in Q4, and per diems for these brands showed significant increases over 2019.
• The company’s performance enabled it to surpass high cost inflation over the past four years, delivering per unit Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) that outpaced 2019 levels when excluding fuel and currency fluctuations.

• Migao Group Holdings (9879 HK) is looking to raise up to US$124m in its Hong Kong IPO.
• Migao Group (Migao) is a vertically-integrated national potash fertilizer company in China.
• In this note, we look at the firm’s past performance and share our thoughts on valuation.

• Corporate Governance Code requires disclosure based on TCFD, and an ISSB-based disclosure system will be discussed in Japan. While interest in disclosing climate change-related information is growing, disclosure hasn’t progressed.
• In the TSE survey, only one-tenth of the companies that listed Scope 1, 2, and 3 emissions in their integrated reports disclosed them in their annual reports.
• If a company can’t disclose Scope 1/Scope 2 in its annual securities report, there’s concern that the company may have challenges in data collection and risk delaying management decisions.

• Miniso report C4Q23 revenue in-line/7.9% vs. our estimate/consensus, non-GAAP NI is 5.1%/10.5% higher than our estimate/consensus on strong overseas sales from North and Latin Americas. 
• Company guided for soft operating margin thanks to robust new store openings, which we believe to be accretive to earnings in the long run
• We maintain the stock as BUY and but cut TP by US$2 to US$31/ADS

• Beenos Inc (3328 JP) operates cross-border e-commerce websites that allow mainly individual users to buy and sell goods both in Japan and internationally over the Internet.
• In FY09/23, BEENOS reported full-year consolidated revenue of JPY32.5bn, operating profit of JPY4.5bn, recurring profit of JPY4.1bn, and a net income attributable to owners of the parent of JPY2.2bn.
• BEENOS Inc. has announced changes in its consolidated subsidiaries (share transfer).

• In 4Q23, we believe total revenue will grow by 20% YoY and MT will have the fourth profitable quarter.
• We believe Douyin will not threaten MT in the long run according to other competitors’ failure.
• We believe EPS will reach RMB0.35 in 4Q23 and RMB2.23 in 2023.

• We are reiterating our Buy rating and $41 price target for Build-a-Bear, slightly raising our FY24 EPS and rolling out FY25 projections after the company reported basically in-line 4QFY23 (January) results and initiated a quarterly dividend program, with an initial quarterly payout of $0.20 per share.
• We believe Build-A-Bear remains highly focused on shareholder value and the company is poised to register solid returns and upside as their experiential offerings continue to expand and resonate with their growing customer base; further, with net cash per share of over $3.10 (and no debt), a dividend yield of 2.7% and trading under 4.5X our FY25 EBITDA, we view the risk/reward in BBW as compelling, and we reiterate our Buy raring and $41 price target.

• Dollar General (DG)’s stock had an interesting reaction to today’s earnings.
• First it went up by ~6% in pre-market, but then ended the day 5% down.
• Despite the somewhat bizarre stock price reaction throughout the day, I think the worst days are likely behind DG.

• Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
• In this note, we will talk about the positive aspects of the deal.

• We cut Luckin Coffee’s 1Q24 revenue estimate by 3% to RMB7.9bn with 79% yoy and cut non-GAAP net income estimate by 42% to RMB318mn due to (1) weak sales；
• We expect 2Q24 to be the turning point for earnings due to (1) sales improving with weather warm-up (2) ASP rebound from easing competition 
• We maintain the stock as BUY rating but lower TP by US$4 to US$37 to factor in the temporary near-term weak sale.

• JD.com’s latest earnings showed a strong commitment to growth, navigating a mix of macro recoveries, seasonality factors and strategic refocus.
• They delivered a growth in net revenues by 4% and recorded a non-GAAP net income attributable to ordinary shareholders of RMB 8.4 billion.
• Cash and cash equivalents, restricted cash, and short term investments totaled RMB 198 billion.

• We provide an update of the potential KOSPI200 rebalance candidates in June 2024. 
• The bottom 5% market caps in KOSPI200 could be excluded from the KOSPI200 rebalance in June 2024. These 10 stocks are down on average 12.6% YTD. 
• We identified seven potential inclusion candidates. Among them, those that have low PBR multiples including HHI and Dongwon Industries could continue to outperform the market leading up to rebalance announcement. 

• It’s true that the difference in profit margins between a listed subsidiary that focuses on specific business and a parent company that has different businesses is the difference in valuations. 
• It will be difficult for a parent company to reverse the valuations of its subsidiaries until the parent company dissolves the parent-subsidiary listing and increases its own profit margins.
• With respect to corporate governance practices, companies with no major shareholders are included with relatively higher corporate governance scores, but this isn’t as significant difference as it tends to be.

• We screen our coverage universe for earnings surprises, EPS upgrades, and management narratives to identify fundamental longs.
• Stocks discussed include TVS Motor (TVSL IN), Nestle India (NEST IN), and Honasa Consumer (HONASA IN) 
• TVSL EVs could surprise, NEST offers the right safety in the current environment, and for HONASA there is a possibility of turning around. 

• Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
• In this note, we will talk about the not so positive aspects of the deal.

• Belle Fashion (BF) aims to raise up to US$1bn in its Hong Kong listing. The company recently refiled its application proof after a gap of two years.
• As per F&S, it was the largest player in China’s fashion footwear market with a 12.3% market share, based on 2022 retail sales.
• We have looked at the company’s past performance based on its earlier filings in 2022. In this note, we talk about the updates from its recent filings.

• Ed Wachenheim, founder of Greenhaven Capital, discusses his experience in the homebuilding industry since the 1980s
• Ed shares insights on the evolution of the homebuilding business model and his investment approach
• Early investment in US Home led to a deep dive into the industry, identifying growth opportunities and the impact of market crises.

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• Campbell Soup Company’s earnings were decent and the company reported moderately optimistic results and future predictions for the company.
• Clouse highlighted a sequential improvement in volume trends and year-over-year operating margin expansion in both divisions, despite slowed category trends over the last year due to economic pressures.
• 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.

• As the Hong Kong bourse languishes, recent Hong Kong privatisation include mainland Chinese firms such as Vinda International (3331 HK) and China Traditional Chinese Medicine (570 HK) . 
• Reportedly (Reuters) Li Ning (2331 HK) is now in the crosshairs.  Shares are up 7.8% as I type.
• Olympic champion Li Ning holds ~10.5% in his self-named company, which was recently in the news after acquiring a HK$2.2bn commercial building from Henderson Land (12 HK)  as its headquarters.

• In Feb 2024,  BAT’s management stated that they were reviewing their stake in ITC Ltd (ITC IN).  The news of a possible selldown by BAT was leaked again earlier today.
• BAT has owned its stake in ITC for over a century and remains its largest shareholder.
• In this note, we talk about the deal dynamics and run the deal through our ECM framework.

• Reuters reported that due to the steep share price declines, Mr Li Ning is considering leading a consortium to privatise Li Ning (2331 HK). 
• The shares have been weighed down by concerns about channel inventory, steep retail discounts, and unauthorised distributor sales. To counter this, Li Ning aims to achieve RMB50bn sales by 2028.
• The probability of an offer is low as funding the scheme consideration could prove challenging. Nevertheless, the downside is low as Li Ning trades at an undemanding valuation. 

• According to public news today afternoon during trading hours, the founder and biggest shareholder of Li Ning (2331 HK), Mr. Li Ning, is mulling privatizing the public company. 
• Mr. Li Ning has shown the opposite intention over the last few years, with several major sell-down of stake.
• The company is trading at 16x 2024 PE, with visibility being quite low. 

• We believe revenue will grow by 44% in 2023 according to the sales volume and the price trend.
• We believe net profit will increase by 100%, higher than the company’s estimate.
• We conclude an upside of 54% and a price target of HK$304. Buy.

For our next Corporate Webinar, we are glad to welcome Centurion Corporation’s CEO, Mr Kong Chee Min. 

In the upcoming webinar, Chee Min will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Angus Mackintosh.

Angus will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Thursday, 21 March 2024, 19:00 SGT.

About Centurion Corporation 

Centurion Corporation Limited (“Centurion” or the “Company” and together with its subsidiaries, the “Group”) owns, develops and manages quality, purpose-built workers accommodation assets in Singapore and Malaysia, and student accommodation assets in Australia, the United Kingdom (“UK”) and the United States (“US”). The Group owns and manages a strong portfolio of 34 operational accommodation assets totalling approximately 66,607 beds as of 30 September 2023. Centurion’s established portfolio of workers accommodation assets are managed under the “Westlite Accommodation” brand and comprises nine workers accommodation assets in Singapore as well as eight workers accommodation assets in Malaysia. The Group’s student accommodation assets are managed under the “Dwell” brand, with ten assets in the UK, five assets in US and two assets in Australia. With global reach and a clear growth strategy to actively enhance and manage its assets, identify strategic acquisitions and joint ventures, as well as develop customised accommodation management services, Centurion is well-positioned as a leading provider of quality, purpose-built accommodation.

• On’s quarterly results disappoint, triggering a 10% stock drop. Meanwhile, ASICS’ share price is up 43% YTD despite modest performance.
• ASICS shareholders advised to consider profit-taking as stock outpaces fundamentals, faces competition from resurging Nike and fast-growing On
• On’s ambitious growth projections threaten ASICS’ market position, with potential market share parity within three years

• This is a follow-up to our initial report on the APAC Luxury Industry where we were of the belief that small niches within the luxury sector could offer potential opportunities.
• Below, we analyse the recent trends in luxury travel on Minor International (MINT TB), Mandarin Oriental International (MAND SP) and Shiseido Company (4911 JP).
• While travel has rebounded to pre-pandemic levels, Shiseido’s Travel Retail struggles, yet Minor International and Mandarin Oriental are showing signs of improvement. 

• Takashimaya (8233 JP) was founded in 1831 and is the operator of one of the leading department store companies in Japan.
• Takashimaya began applying the Accounting Standard for Revenue Recognition from the beginning of FY02/23.
• Takashimaya Co., Ltd. announced revisions to its full-year earnings forecasts for FY02/24.

• Round One Corp (4680 JP) specializes in running amusement complex facilities in Japan, the US, and China.
• FY03/23 results: The company reported sales of JPY142.1bn, operating profit of JPY16.9bn, recurring profit of JPY16.7bn, and net income attributable to owners of the parent of JPY9.7bn.
• In November 2023, the company revised its full-year FY03/24 earnings forecast.

• Inaba has bumped its Yaizu Suisankagaku Industry (2812 JP) offer by 6.5% to JPY1,438 and lowered the minimum number of shares to be purchased from 66.67% to 60.00% ownership ratio.
• The bump was forced by 3D Investment Partners increasing its shareholding from 9.78% to 13.81% ownership ratio after the previous JPY1,350 offer was announced on 5 February.
• While the offer continues to value YSK below book value, Murakami and 3D’s support paves the way for completion. At the last close, the gross spread was 7.1%.  

• Back in December 2022, agri-food play Japfa Ltd (JAP SP) spun-off its 62.5% stake in AustAsia Group (2425 HK), as discussed in Japfa Ltd: Trading Cheap After AustAsia In-Specie Distribution 
• Last Friday, Bloomberg reported its key shareholder, Renaldo Santosa and his family, who collectively control ~75.5%, are considering taking Japfa private.
• The family acknowledges it has been approached by various financiers, investment banks, but nothing definitive has emerged. Still, Japfa is worth a revisit.

• Back in 2004, Hahn & Co and Hankook Tire (161390 KS) acquired a 70% stake in Hanon Systems (018880 KS) from Visteon (VC US), an automotive electronics supplier, for ₩3.8tn.
• Three years ago, Hahn/Hankook explored the sale of this 70% stake, which was expected to fetch ~₩8tn (US$7bn). Reportedly, Carlyle, TPG, Bain and auto supplier Mahle submitted preliminary bids.
• That 70% stake is now worth ₩2.3tn. And reportedly, Carlyle has returned to the trough. 

• Gopal Snacks (1592789D IN) IPO worth INR 6.5 bn is live on the bourses. 
• The company is a prominent snacks manufacturer in India, especially in the state of Gujarat. It boasts one of the highest fixed asset turnover ratio and high ROCEs. 
• On the flipside, caution must remain on its dull revenue growth post F22 and on its related party transactions, especially with promoter companies.

• Ola Electric is looking to raise about US$1bn in its upcoming India IPO.
• Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
• In our previous note we looked at the company’s past performance and undertook a peer comparison. In this note, we will talk about valuations.

• Many are asking why KDDI would want to buy 50% of Lawson, Japan’s third biggest convenience store chain.
• Some more imaginative analysts suggest this could be just the first step towards KDDI merging with Rakuten in order to beat Amazon.
• The more likely future is an ecosystem to challenge Rakuten and LY Corp (Yahoo etc), starting with points and payments and evolving to other Fintech, e-commerce and health.

• Seria Co Ltd (2782 JP) operates 100-yen stores throughout Japan, buying products from manufacturers and selling them at a flat price of JPY100 (plus tax).
• In FY03/23, sales were JPY212.4bn (+2.1% YoY), operating profit was JPY15.4bn (-26.2% YoY), recurring profit JPY15.6bn (-26.8% YoY), and net income JPY10.3bn (-28.3% YoY).
• On January 31, 2024, Seria Co., Ltd. announced a revision of its full-year FY03/24 earnings forecast.

• The fact that many companies have low actual returns is the crux of the problem; investors will likely increase pressure on the companies as ROEs haven’t increased noticeably in 2023.
• TSE may have indicated the points for disclosure, based in part on the experience of few companies that achieved the listing criteria by successfully disclosing their “plans” for transitional measures.
• March 2023, TSE published “Request for Disclosure on the Status of Dialogue with Shareholders.” However, mismatches between companies and investors makes it difficult to require all prime market companies this.

• Mitsubishi Shokuhin (7451 JP) is Japan’s largest general food wholesaler by revenue.
• In FY03/23, the company reported revenue of JPY1,996.8bn, operating profit of JPY23.4bn, recurring profit of JPY25.2bn, and net income attributable to owners of the parent of JPY17.1bn.
• In May 2021, the company announced its “Medium-term Management Plan 2023,” covering the period between FY03/22 and FY03/24.

Informa’s FY23 results were strong, slightly ahead of guidance at January’s update. Underlying revenues grew 30.4% and adjusted operating margin expanded from 21.9% to 26.8%, with all four operating segments posting underlying revenue progress. The momentum has continued into FY24, and formal guidance has been edged ahead. The group generates significant amounts of cash, and leverage at end FY23 of 1.4x was below the guided range of 1.5–2.5x. With modest investment requirements and M&A opportunities of a large enough scale hard to come by, it seems likely that the share buyback programme will be extended further, underpinning the valuation.

• There are no constituent changes for the MVIS Australia Equal Weight Index at the March rebalance. 
• Float and capping changes will result in a one-way turnover of 4.4% and in a round-trip trade of A$195m.
• We had Lendlease Group (LLC AU), IDP Education (IEL AU) and nib holdings (NHF AU) as close deletes and they will now have inflows due to capping.

• 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: Trial Holdings (5882 JP) IPO, Nippon Express Holdings (9147 JP) placement and ARM Holdings (ARM US) lock-up expiry.
• Event-Driven developments: JSR Corp (4185 JP), Alumina Ltd (AWC AU), Azure Minerals (AZS AU), Genex Power Ltd (GNX AU), Vinda International (3331 HK). 

• On March 8, Bloomberg reported that Japfa Ltd (JAP SP) owners were considering taking it private and started talks about a loan of around US$150 million. 
• Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years. 
• An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.  

• Uni President China (220 HK), a F&B company in China, has an impressive track record of paying near 100% or over 100% of net profit in dividends since 2018. 
• The company has two segments, food (mainly instant noodle), and beverage.  Overall sales grew 1% yoy in 2023 while net profit jumped 36% yoy. 
• Given the reasonable valuation (13x forward PE), a near 40% net cash position, and most importantly a stable 8% dividend yield, the stock looks attractive.

• We see further upside to our previous above-consensus 4Q23 results estimates on low base, enhanced monetization, and faster TEMU expansion.
• That said, we believe market focus already shifted to outlook for 2024, in particular an imminent slowdown in 1Q24 and renewed concern around US curb on TEMU.
• 30% share price correction is pricing in the above scenario and valuation should gradually improve as PDD delivers back-loaded bottom line growth in 2024.

• JD.com stock price surged after its 4Q23 results and repurchase decision.
• It is not big issue that BYD sales decreased in the weak season.
• Alibaba began to close unprofitable Freshippo stores in February, but the company said it has expansion plan.

• 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), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
• We also provide updates on released earnings for Uchi Technologies (UCHI MK), Plover Bay Technologies (1523 HK), UMP Healthcare (722 HK), and Sitoy Group Holdings (1023 HK).

• Pan Pacific International Holdings (7532 JP)  is one of Japan’s top retailers whose core business is the Don Quijote discount store chain.
• The company recorded FY06/23 sales of JPY1,936.8bn, operating profit of JPY105.3bn, recurring profit of JPY111.0bn, and net income attributable to owners of the parent of JPY66.2bn.
• Pan Pacific International Holdings Corporation has announced a revision to its full-year earnings forecast for FY06/24, which was announced on August 16, 2023.

• There were a few rebalance announcements in the last week and the SSE STAR50 (STAR50 INDEX) and STAR100 Index rebalances were implemented at the close on Friday.
• There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.
• Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 

• A listing in London would not remove de minimis reform risk in US market
• A new report quantifies the potential cost of changes to US de minimis rules
• Europe’s rigorous new ‘digital services’ laws are an emerging threat to SHEIN

• Nihon Chouzai (3341 JP) is an integrated healthcare company whose core business is the operation of dispensing pharmacies.
• In FY03/23, Nihon Chouzai reported sales of JPY313.3bn, operating profit of JPY7.6bn, recurring profit of JPY7.7bn, and net income attributable to owners of the parent of JPY4.5bn.
• Nihon Chouzai Co., Ltd. announced the retirement of treasury shares.

• Even if TSE requires new listed companies to disclose the reasons for listing and the possibility of raising funds, it’s questionable whether this will motivate them to grow their businesses.
• Companies that are not eligible for investment in terms of market capitalization and trading liquidity criteria will not be effective if they seek contact with institutional investors.
• If unlisted stock markets are created, IPOs will increase in size. If listing criteria are raised to tens billion yen in market capitalization, institutional interest in growth market will increase.