Consumer

• Today, just before the close, the Nikkei sprung a headline saying KDDI Corp (9433 JP) would take over Lawson Inc (2651 JP). The stock immediately headed to limit up. 
• Post-Close, details emerged. KDDI will buy the 50% that MitCorp does not own, this will become a 50/50 JV. TOB launch at ¥10,360 will be in April. Squeezeout in September.
• This appears to be the Next Step in Lawson’s Big Boots Adventure. The premium is too light. The price is too low. And that is not counting the synergies.

• Lawson Inc (2651 JP) has recommended a pre-conditional tender offer from KDDI Corp (9433 JP) at JPY10,360 per share, an 18.8% premium to the undisturbed (5 February). 
• The pre-conditions relate to regulatory approvals in Japan, China, South Korea, and the EU. The offer is expected to start in April, suggesting no significant issues, particularly with SAMR approval.
• Based on the irrevocables, the minimum acceptance condition requires a 30.2% minority acceptance rate, achievable as the offer represents an all-time high. 

• Activist investor, Elliott Management has acquired over a 2% stake in Mitsui Fudosan (8801 JP) and is urging it to sell its 6% stake in Oriental Land (4661 JP).
• Elliott appears to have identified the path of least resistance, as Mitsui Fudosan had already indicated a willingness to sell its Oriental Land shares last year.
• If Elliott’s campaign proves successful, it will inadvertently benefit Palliser, which is currently challenging Keisei Electric Railway Co (9009 JP) with a similar proposal.

• Bloomberg reports that L’Occitane (973 HK) draws takeover interest from Blackstone (BX US), which is considering partnering with Chairman and largest shareholder Reinold Geiger.
• Blackstone needs an attractive takeover premium due to the presence of significant disinterested shareholders (Mr. Geiger and Acatis KVG).
• Shareholders will be wary of the latest rumour due to Mr Geiger’s aborted offer on 4 September 2023. Nevertheless, the valuation is undemanding compared to peer multiples.

• Shiseido Company (4911 JP) relies heavily on Japan and China, each making up over one quarter of sales. 
• The long thesis is simple – I expect improvement in both regions in the near future, and the valuation is very attractive.
• Blackstone just announced a potential bid for L’Occitane (973 HK), which I have written extensively about.  We could potentially see a pickup in interest in the sector.

• Water Oasis (1161 HK) just went ex-dividend on 6th Feb and is now trading at a 7.5x PE FY24e and a 10.7% dividend yield on trailing FY23 earnings.  
• The company has refurbished its flagship stores, and we believe it can perform 8-9% better year over year for FY24 than FY23.
• The company also has 230 mn HKD net cash (after netting dividends paid out), representing     26% of market capitalization.

• There could be one change for the Nifty100 Low Volatility 30 Index that will be implemented at the close on 28 March.
• Constituent changes, volatility changes and capping changes will result in one-way turnover of 12.6% and in a one-way trade of INR 3.7bn.
• While the deletion is fairly certain, there are a few non-constituents around the same level of volatility and price movements over the next few weeks will determine the inclusion.

• From 2018 onward, French beauty retailer L’Occitane (973 HK) has apparently drawn interest from the likes of Advent International and its controlling shareholder Chairman Reinold Geiger – amongst others. 
• There is substance to these “Offers” – Geiger confirmed in August 2023 he was contemplating a conditional voluntary general Offer. He holds 72.65% of shares out according to the HKEx. 
• The latest news, with no definitive source, is that Blackstone is mulling the possibility of teaming up with Geiger on a buyout.

• KDDI’s agreement with Lawson and Mitsubishi to make a tender offer for the convenience store chain is a game-changer for what has become a slow growth convenience store sector.
• There are myriad potential synergies across e-commerce, new store types and also the promising new revenue stream of retail media. Lawson may be worth more than KDDI’s offer suggests.
• And while Lawson may be behind Seven Eleven and Familymart, on some KPIs, like HQ revenues, it is No. 1 and also matches Seven Eleven on same-store sales.

• Kayou (000KAYOU CH) is looking to raise up to US$500m in its upcoming HK IPO. The deal will be run by CICC, Morgan Stanley and JP Morgan.
• Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product. 
• As of 9M23 (30th Sep 23), it had an IP matrix of 44 IPs through licensing from IP partners and the development of proprietary IPs. 

• Isetan Mitsukoshi Holdings Ltd (3099 JP) on Friday announced Q3 results, a huge hike in H2 dividend (from ¥12/share guided to ¥20/share newly guided), and a buyback. 
• 9mo Revenues were up 9.4%yoy (after +16.7% the previous year), OP +66.7%, and Net Profits +59.0%yoy through three quarters. Full-year Revenues, OP, and NP were all revised up slightly.
• The buyback is for up to 11mm shares, spending up to ¥15bn over the next 8 weeks. Looking at details of the shareholder structure is worthwhile.

• BYD released its result estimate for 2023, in which net profit rose by 74% to 86% over 2022.
• Li auto delivered 31,165 vehicles in January 2024, up by 106% over 2023.
• As per rumors reported in the media, Alibaba will sell RT-Mart, a supermarket brand.

• Yaizu Suisankagaku Industry (2812 JP)/YSK has recommended Inaba’s tender offer of JPY1,350 per share, an 18.7% premium to J-STAR’s failed offer and a 9.8% premium to the last close. 
• J-STAR’s offer failed as shares consistently traded above terms due to Murakami and 3D Investment Partners emerging as substantial shareholders. J-STAR extended the close but did not bump its offer.
• While Inaba’s offer values YSK below book value, Murakami is now supportive. Based on the irrevocables, the minimum acceptance condition requires a 57.2% minority acceptance rate.

• Metcash Ltd (MTS AU) is looking to raise up to A$300m (US$195m) in its primary placement. The proceeds will be used to partially fund the acquisition of three businesses.
• The deal would be a large one to digest at 22.5 days of three month ADV and 8.4% dilution. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

• Some 17 months after the Cheng Family failed to secure 50%+ of Giordano International (709 HK), the family are now calling an SGM to install friendly directors. 
• Sino Wealth, a Cheng family’s vehicle with 24.06% of shares, has requisitioned an SGM to remove CEO Peter Lau, and install Colin Currie as CEO, plus appoint three other NEDs/INEDs.
• If this were to come to pass, the family would have (almost) effective control of the board. The vote will be close. And David Webb is now below 5%. 

• Tesla Inc.’s accomplishments in 2023 were substantial, with record production and shipments of approximately 1.8 million vehicles, per the company’s Q4 2023 earnings call transcript.
• As well, in Q4, it was manufacturing vehicles at nearly 2 million cars per year, a remarkable achievement.
• Tesla’s Fremont factory alone produced 560,000 cars, solidifying its status as the highest production automotive plant in North America.

• Kimberly-Clark’s recent earnings for its fourth quarter and full year 2023 results showed both steady growth and challenges.
• They are focused on elevating categories and expanding markets for growth, a strategy which is showing promising results.
• The earnings call highlighted that the company had faced supply constraints that affected its market share.

• We are reiterating our Buy rating and $0.25 price target for Starco Brands after the company announced basically inline preliminary 2023 results and provided initial 2024 guidance for Adjusted EBITDA which bracketed our projection; as such, we are tweaking higher both our 2023 and 2034 Adjusted EBITDA projections.
• We believe Starco is ideally positioned to register material top and bottom line growth in 2024 (and beyond) and believe management has remained conservative on multiple levels in their guidance.
• We continue to view Starco as ideally positioned to lever their unique characteristics in the packaged goods space to drive consistent top and bottom line growth, and we reiterate our Buy rating and $0.25 price target for STCB.

• Apeejay Surrendra Park Hotel (PARK IN) (ASPH) plans to raise up to US$111m via selling a mix of primary and secondary shares in its India IPO.
• ASPH ranks as the eighth largest in India in terms of chain affiliated hotel rooms inventory as of Sep 2023, as per Horwath HTL Report.
• In this note, we talk about the past performance and our thoughts on valuations.

• In addition to the large number of micro-caps among companies listed on the Growth Market, another problem is the lack of growth in market capitalization after IPOs. 
• Many managers consider IPO to be the goal, and this is evidenced by the fact that not many companies raise capital at IPO and after listing.
• The government proposed raising the market capitalization criteria for IPOs and revitalizing the secondary market for pre-listed companies. TSE is likely to review its listing criteria as early as 2025.

• Share price of Meituan has fallen by 25% since we flagged the name as high-conviction sell for 2024 last December, due in large to its weakening fundamental and earnings cut.
• We believe its competitive positioning in food delivery remains rock solid and estimates Meituan will likely command over 2/3 market share in in-store business, at the expense of margin.
• The company trades at 12x/8.6x 2024/25 consensus earnings. Current valuation already priced in rather bearish outlook amidst macro concerns and intensified competition in our view. We see value emerging.

• By one metric, outbound tourism in December improved to 89% of 2019 levels
• Meanwhile, domestic activity in December remained close to pre-Covid levels
• In this month’s edition we track the tourism recovery in ten illustrative charts

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND flows were net negative and NORTHBOUND flows a decent buy. AH premia on average fell, but liquid pairs saw AH premia rise. Chinese/HK shares shellacked.
• Watch the SOE stock price KPI space. Wouldn’t be short SOEs vs Privates on H/A basis. Low-hanging fruit with some SOEs having large cash balances.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net BUY RMB 9.9bn of A-shares on very strong average activity after +12.1bn RMB the week before. Some National Team buying this week. 
• Renewables selling was tempered. Energy and Finance saw net selling. Industry and Tech saw large net buying. Relatively larger net Shenzhen buying later in the week as stocks fell hard.

• Netflix, in their recent Q4 2023 earnings call, highlighted key developments that signal both progress and future challenges for the company.
• The firm elaborated on its partnership with WWE, where Netflix airs live WWE events.
• As per co-CEO Theodore Sarandos, fans of WWE have lauded this move, many of whom Netflix assumes were underserved previously.

• Since the introduction of the Corporate Governance Code, the hurdle for listed companies to fulfill their responsibilities has become higher, which is why more managers are choosing to go private.
• While some of companies with large market capitalizations that overseas investor engagement extends to are showing promise for change, many others are failing to step up management to create value.
• TOPIX’s rise has been mainly driven by an increase in the number of companies rather than an increase in stock prices. The market should become higher in quality through de-listing.

• Singapore-based agritech startup DayaTani has raised US$2.3 million in a seed funding round led by Ascent Venture Group with participation from KBI Investment, MDI Ventures, Northstar Ventures, BRI Ventures, and Gentree Fund.
• Founded in 2023, DayaTani works to enhance yields for Indonesian farmers, operating research and development sites across the Java island that focus on horticulture and grain crops.
• The company is developing hardware and software including data science models for more accurate recommendations, such as what fertilizer to use, based on real-world conditions.

• 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, Amer Sports (AS US) was priced below its range, while Thai Credit Bank PCL, managed to get enough support to pull thru. 
• Given the earnings season, there weren’t many placement apart from Indus Towers (INDUSTOW IN) and Metals Acquisition (MTAL US)‘s CDR offering. 

• This is our first report on D.R. Horton, one of America’s largest homebuilders.
• The company reported solid first quarter results for the fiscal year 2024.
• The company highlighted a promising increase of net sales orders by 35% from the previous year’s quarter.

• Based on the information shared during the recent earnings, Procter & Gamble has demonstrated solid performance, accomplishing significant organic sales growth and market share results despite a challenging operating environment.
• A diverse portfolio, combined with strong steps in innovation and sustainability, positions the company for continued success.
• Notably, Procter & Gamble reported a strong quarter with 4% growth in organic sales and a 16% increase in core earnings per share.

• Ferrari N.V. (RACE US) continued its stellar quarterlies, showing no signs of a slowdown, with Q4 2023 revenue/profits increasing 11.3%/34% YoY.
• FY24 will see the newly launched Purosangue become 20% of the product mix, and personalization trends continue with a mid-single-digit price hike. Ferrari Lifestyle brand will continue strong growth.
• Trading at 48x/41x FY24e/25e, the stock seems expensive, but growth at a >25% ROCE seems highly probable in the not-to-distant future.

• Due to a reallocation of resources, we are terminating coverage of Regis Corporation (RGS).
• Our previous rating, price target and estimates for Regis Corporation (RGS) should no longer be relied upon.
• Historical disclosures will be provided upon request.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Merlin Entertainments’ ESG as “Adequate”, in line with the Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Weak”.
• Merlin Entertainments is a global leader in the branded, location-based entertainment business.

• CyberAgent Inc (4751 JP) reported 1QFY09/2024 results yesterday. Revenue increased 15.2% YoY with OP increasing 12.4% QoQ, and beat consensus estimates by a huge margin.
• All three business segments have shown strong improvement, with newly released gaming title  “Jujutsu Kaisen Phantom Parade” driving growth for Games business.
• CyberAgent’s (CA’s) share price moved up by about 4% following earnings announcement and seems that the worst is over for the company.

• GoTo (GOTO IJ) has legally completed the transaction to sell 75% of Tokopedia to TikTok, paving the way for higher growth and improving profitability, without the need to subsidise growth. 
• The company will continue to benefit from the new Tokopedia’s core GMV growth without having to provide funding, with the benefit of a larger total addressable market. 
• GoTo has achieved positive adjusted EBITDA in 4Q2023 beating expectations but financials should improve further in 2024 although resources will be focused on growing on-demand services, and especially food delivery.

Rakuten Group has launched a USD 1.8 bn 144A/RegS three-year notes offering with a coupon of 11.25% at 97.83, yielding 12.125%. The deal was upsized from USD 1.0 bn. Proceeds from the transaction will be used to fund a concurrent tender offer for the company’s two USD 2024 bonds.

The tender offer is for the 10.25% 2024s (USD 950 mn outstanding) and 3.546% 2024s (USD 800 mn). The tender cap is set at the size of the notes offering, which would be enough to buy back all the outstanding 2024 bonds. The tender consideration is USD 1,006.76 per USD 1,000 principal for the 10.25% ’24s, and USD 956.75 for the 3.546% ’24s. The early tender consideration is USD 30 per USD 1,000 principal.

• Soybean continues to face bearish outlook with supply surplus and lagging demand.
• Soybean price reached a 2-year low this month, with some using the bargain prices as a buying opportunity.
• US exports lag but recent uptick in large export sales suggests the availability of buyers at these prices.

• The fact that only 7% of companies disclosed their cost of capital disappoints investors who had hoped that the “TSE request” would change management’s mindset to become more share-price conscious.
• The average ROE of listed companies declined slightly. This indicates that they haven’t been able to find effective investments to raise business profitability and that shareholder returns have been inadequate.
• The ROE trend does not indicate a significant change in management’s mindset, so this will be a major issue if the stock price moves lower to the June AGM season.

• India’s beauty and personal care market is expected to hit US$30 billion by 2027. While the segment as a whole is thriving, beauty ecommerce penetration in Tier 2 and Tier 3 cities suffers from long delivery periods as well as issues with product authenticity and quality.
• BuyEazzy, a beauty ecommerce platform, aims to solve this by leveraging the trust between neighborhood store owners and consumers.
• The startup has raised over US$4.2 million in a series A round led by Info Edge Ventures, with participation from existing investors Incubate Fund Asia and M Venture Partners.

• Motorist Motorist, a Singapore-based automotive tech firm, has raised a strategic investment from Tokyo Century Leasing (Singapore), a subsidiary of the Japanese auto financing group.
• The startup did not disclose the round’s size but said that it was raised at a US$60 million valuation.
• Founded in 2015, Motorist facilitates vehicle-related transactions, including car valuations, second-hand car listings, and applications for loans and insurance.

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.

• Alam Sutera Realty
• Lippo Malls Indonesia Retail Trust
• Vista Land & Lifescapes
• Wynn Macau Ltd

• The review period for the Nikkei 225 (NKY INDEX) March rebalance ends yesterday. There could be three changes at the rebalance with sector balance in focus.
• Depending on the changes, passive trackers will need to buy between 1.3-19x ADV (7.1-24% of real float) on the inclusions and sell between 3.5-47x ADV on the deletions.
• Fast Retailing (9983 JP) avoids capping in March, passives will buy Nitori Holdings (9843 JP), and 25 stocks have over 0.5x ADV to sell as part of the funding trade.

• L’Occitane (973 HK) announced a strong 3QFY24 operational update last night.  Share price is up 7% today and up 36% since interim results announcement late November last year.
• Sol de Janeiro, the Brazilian-inspired premium body care brand, continued to shine in the quarter, growing 199% at reported sales and 214% at constant currency. 
• Recommend to take advantage of the current weak sentiment on such companies trading on the HK stock exchange but are actually not reliant on China in terms of business fundamentals.

• Amer Sports (AS US) raised around US$1.3bn in its US IPO, after pricing its IPO below its initial range, as per media reports.
• Amer Sports is a sports and outdoor brands company making clothing and other sporting equipment for use in snow sports, running, climbing, baseball, american football, tennis and other sports.
• We have looked at the company’s performance and valuation in our past note. In this note, we talk about the trading dynamics.

• Ginebra San Miguel (GSMI PM) is a monopoly in the Philippines, with over 95% of the gin market. It has a 10 Revenue CAGR of 14%. 
• The company has experienced margin expansion due to premiumization and operating leverage on SG&A, the former of which is likely to continue in the future with new premium gin launches.
• There is value in the name trading at 7x PE, with >20% of the market cap in cash and a 7.3% dividend yield predicated on a 50% payout ratio. 

• Ultrajaya Milk (ULTJ IJ) is back to the boil in terms of sales growth for both its dairy and carton tea businesses, which both benefit from a nominalisation of mobility. 
• The company’s margins have improved in the dairy business as cost pressure has abated with falling powdered milk prices. Competition has picked up but the overall market is growing sufficiently. 
• Ultrajaya Milk will open a new distribution centre in 1Q2024, which should help to drive growth plus it looks to launch new product categories in 2024. Valuations are attractive.

Key points (machine generated)

• Liverpool is a major player in the financial services industry in Mexico and offers credit cards.
• The company has a strong presence in retail, real estate, and financial sectors, focusing on expanding its reach and providing a diverse range of products and services.
• Liverpool has incorporated e-commerce and implemented a new logistics platform to strengthen their supply chain and accommodate more clients, showcasing their dedication to innovation and customer satisfaction.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• This is our first report on e-commerce player, Global-e Online Ltd.
• The company delivered decent results for the third quarter of 2023, marked by significant growth in Gross Merchandise Value (GMV) by 35% and an Adjusted EBITDA increase by 76%.
• A key determinant of this success was their improved profitability margins and comprehensive cost control measures, alongside strategic advancements across their operations.

WPP’s capital markets day (CMD) focused on the combination of creativity and AI at scale and how these can be leveraged to boost clients’ businesses. Outline Q423 performance figures were given, along with updated forward guidance, including on restructuring costs and potential payback. We expect market expectations to be broadly unchanged. The overarching narrative of consolidation and simplification, common data platforms and standardised reporting, is coherent and supports the projected margin expansion. To be really convincing, though, top-line growth needs to exceed the 3% indicated, which depends on better performances in both Media and Creative. The rating remains undemanding.

Smiths News’ trading update highlights the resilience of its business model in a tough macroeconomic environment, with FY24 results expected to be in line with consensus. As a reminder, our 2024e PBT forecast stands flat at £33.4m despite an anticipated 6% y-o-y decline in revenue to £1.0bn, attributable to management’s tight control of the business and the ongoing annual efficiencies being delivered. Smiths has renewed several long-term publisher contracts in the past year, which could imply visibility over c 74% of annual revenues to 2029, with potential for expansion. This should further bolster the company’s cash-generative business model and underpin the sustainability of the business in the long term.

• 2QFY24 (December) ongoing EPS was $0.10 versus ($0.07) in 2QFY23 and ahead of our $0.04 estimate.
• Ongoing EBITDA was $3.1MM in the quarter, well above the $0.8MM in 2QFY23 and ahead of our $2.5MM estimate.
• EBITDA margins of 6.0% exceeded our 4.6% estimate.

• Alibaba Changed its Tmall Taobao business unit from three centers to six departments.
• We believe the change means Alibaba is moving its focus from cost cut to revenue growth.
• We set the stock upside at 26% and the price target at HK$91. Buy.

• 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 this note, we talk about the not-so-positive aspects of the deal.

• Ecuador’s crisis, driven by violence and narco-gang threats, impacts the global seafood supply chain, especially the lucrative shrimp exports sector.
• Resilient amid challenges, India holds its position as the second-largest global shrimp producer, balancing opportunities and persistent challenges in logistics and competition.
• Investors urged caution in the Indian seafood boom, yet potential opportunities arise from Ecuador’s supply disruptions, with reduced import duty enhancing India’s competitiveness.

• FirstCry (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, has filed for a US$700 million IPO. 
• In Brainbees Solutions (FirstCry) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on the worrying trend of India’s KPIs, margin pressures, cash burn, and deteriorating balance sheet strength. 

Key points (machine generated)

• The litigation industry is filing lawsuits against companies that manufacture consumer headphones, including major players like Apple, Bose, and Skullcandy.
• The company in focus has filed lawsuits against several headphone manufacturers and has settled with Apple and Plantronics, earning around $11.0 million in net proceeds.
• Despite being in a declining industry, the company is currently trading as a net-net and has hidden asset value, suggesting potential upside value of up to 75%, with a downside value only slightly lower than its current levels.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• If the ISS ROE criteria, which seems somewhat slow, were to be resumed, many companies would still be below 5%. However, how many companies are feeling threatened?
• About 40% of the companies have large shareholders holding more than 20% of their shares, which is one reason why many companies do not feel a sense of threat.
• Domestic institutional investors should apply the Proxy Voting Guidelines more strictly to companies that do not make maximum efforts to increase their ROE.

Key points (machine generated)

• O’Reilly Automotive is a retail company specializing in automotive aftermarket parts and services.
• The company has over 6,000 stores in the US and Mexico, making it one of the largest retailers and suppliers in the industry.
• O’Reilly Automotive offers both do-it-yourself and professional services for a wide range of domestic and imported automobiles.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Aeon Co Ltd (8267 JP) owns 13% of Tsuruha Holdings (3391 JP). Oasis owns 13% too. Oasis ran a governance campaign but lost last summer’s AGM. Aeon supported Tsuruha.
• Tsuruha shares popped in November when Tsuruha said it was looking at its strategic options. BBG reported PE firms were circling. Now Aeon wants to buy Oasis’ stake. 
• That would put Aeon in a near-blocking position without consolidating. And it would mean minorities stayed minorities. The real question is whether this is what Tsuruha wants.

• The “MBO” for Benesse traded through terms from the 6th day post-announcement onwards. 37% total traded since announcement, 20% since that 6th day. 
• The deal as announced 10 November was entirely too cheap. It was somewhat egregious if you look through the balance sheet. Plus there was a free museum on top.
• But to no avail. There is no bump. There have been no activists peeping above the parapet (yet). It isn’t impossible to block, but if nobody shows their face…

• The change in the dividend payment system in Korea in 2024 is likely to result in some attractive “double dividends” opportunities.
• According to the Korea Exchange, there are seven stocks that have changed their dividend record dates policy last year and also that pay quarterly dividends. 
• Hyundai Motor (005380 KS) (common) provides a dividend yield of 5.8% and Hyundai Motor (005385 KS) (pref) provides a dividend yield of 9.6% at current prices.

• Astra International has seen an aggressive sell-off on fears of increasing competition from the EV space as more operators enter the Indonesian auto market, with the most recent being BYD.
• The company has successfully held its market share at 56% in FY2023 and has launched several EV models, mostly hybrids,  as adoption levels for BEVs remain low.
• Management remains confident that FY2024 will be a stable year for both 2W and 4W, with overall EPS only set to decline slightly but valuations are now compelling.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 index rebal event.
• I expect one change for the T50 index and two other changes for the T100 index.
• One of the T100 changes also has implications for the TDIV index flows in March 2024.

• There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
• There could be buying in EcoPro Materials and Hanjin KAL while Hotel Shilla, Pearl Abyss, F&F, Hyundai Mipo Dockyard, Hanon Systems and Jyp Entertainment could be sold.
• There will be a lot of flow on the stocks and passive trackers will need to trade over 7 days of ADV in most stocks.

• Benesse Holdings (9783 JP) notes that the pre-condition for EQT-backed MBO has been satisfied. The offer price remains unchanged at JPY2,600 per share, a 45.1% premium to the undisturbed price.
• EQT has noted a possibility of extending the tender offer close from 4 to 13 March, which suggests a limited appetite to bump the offer.
• The shares are trading 1.3% above terms. A 51% minority acceptance rate and no competing bidder indicate an unfavourable risk/reward profile – a 27% downside on deal break. 

• We believe Mixue’s low prices are fit for the current weak economy.
• Any “freshly made” price lower than Mixue’s will compete with bottled drinks.
• We also believe low rental is the key for Mixue’s low prices.

• E Mart Inc (139480 KS) has been a strong outperformer this year (up 5.6% YTD) versus KOSPI which is down 5.8% in the same period. 
• We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including “open on Sundays” policy and focus on low P/B stocks. 
• E Mart is trading at P/B of 0.2x versus Coupang which is trading at P/B of 8.3x. E Mart is more attractive than Coupang, especially considering the recent catalysts. 

• 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 this note, we talk about the positive aspects of the deal.

• On Friday 26 January, NAFCO Co Ltd (2790 JP) announced Q3 earnings and a large Buyback Program to run from 29 January through 31 March.
• While the company is having A Very Bad Year, this buyback raises obvious questions. The size is interesting given the float and the shareholder structure. 
• Those interested in SmallCap Events might take a look. There are very short-term and slightly longer-term implications.

• The situation at Paris Miki has been relatively non-salutary the last many years til 2022. The stock has underperformed peers in sales growth and has dropped sales points. 
• The company has a decent relationship with one of its main suppliers, global eyewear giant Luxottica Group (LUX IM), which just added to their stake recently, aggressively. 
• The company is getting slow-kicked out of TOPIX, but revival appears in the works. It kind of looks like a setup for an MBO.

• This is our first report on global hotels major, Choice Hotels International.
• The company’s CEO, Patrick Pacious, and CFO, Scott Oaksmith, provided details on their financial results and strategic initiatives, including the proposed acquisition of Wyndham Hotels & Resorts.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• This is our first report on Natura &Co, a multinational cosmetics and personal care company.
• The Wave 2 roll-out in Brazil did, however, have positive results, showing combined year-on-year revenue growth in certain categories.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.