Consumer

• I tally 45 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Quite week – no new deals were discussed this week on Smartkarma ….
• Key updates took place on Ansarada Group (AND AU), Southern Cross Gold (SXG AU), A8 New Media (800 HK), CPMC Holdings (906 HK), Mandala Multifinance (MFIN IJ), and Fancl (4921 JP).

• 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: Ola Electric (1700674D IN) and BrainBees Solutions (0172540D IN) IPOs.
• Event-Driven developments: A8 New Media (800 HK), Asia Cement China (743 HK), CPMC Holdings (906 HK), Fancl Corp (4921 JP), Sun Corp (6736 JP), Pacific Metals (5541 JP). 

• BrainBees Solutions is looking to raise up to US$500m in its upcoming India IPO.
• FirstCry is India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products in terms of GMV, for the year ending Dec 2022 (9M23), according to RedSeer.
• In our previous notes, we looked at the company’s past performance. In this note, we will talk about valuations.

• Ola Electric (1700674D IN) is launching its IPO, consisting of fresh issue worth INR 5.5 bn and offer for sale upto 84.9 mn shares.
• The company delivered its first electric scooter in December 2021, and since then it has grown immensely to become a market leader with a share of 35%.
• As far as forensics go, one should look out for related party transactions with promoters, some accounting policies, constant losses, need for capex, trend of expenses, etc.

• Signs of change in companies that have improved their capital profitability and valuations can be seen in their policy shareholdings/total assets. 
• Companies with fewer policy shareholdings, as measured by (policy shareholdings + equity holdings)/total assets, tend to have the best values for valuation, ROE, and ROA, and vice versa.
• To measure the seriousness of reducing cross-shareholdings, as long as the company has the voting right of cross-shareholdings in retirement benefit trust, the deemed shares should be included in cross-shareholdings.

• Ford Motor Company’s second quarter 2024 performance offers a comprehensive snapshot of a transitional phase in the company’s long-standing history.
• The quarter reflects their advancing Ford+ strategic plan which aims to refine operational efficiencies and bolster profit margins through structural adaptations and technological advancements.
• 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.

• O’Reilly Automotive, Inc. faced a challenging second quarter in 2024, with performance below expectations due to broader industry demand headwinds.
• Despite these challenges, the company reported a 2.3% increase in comparable store sales, continuing to outperform the industry.
• Adjustments in full-year outlook for operating profit and earnings per share were made following these results.

• Whirlpool Corporation reported its second quarter earnings for 2024, reflecting a mixed performance amid a challenging macroeconomic environment.
• The company showed strong sequential global margin expansion and reiterated its net sales guidance at $16.9 billion.
• However, it faced downward pressure on discretionary demand due to the soft housing market, particularly affecting the North American market.

• Sales rose JPY1.8bn (8.3%) YoY, driven by higher sales in Domestic Rice Cracker, Overseas, and Food businesses.
• Operating profit increased JPY375mn (53.6%) YoY, with significant profit growth in Domestic Rice Cracker and Food businesses.
• Revised FY03/25 forecast projects sales of JPY102.0bn (+6.8% YoY) and net income of JPY3.8bn (+68.4% YoY).

• U.K.-based food distributor specializing in delivering a variety of products to convenience stores and foodservice providers
• Targets independent establishments with low minimum order values
• National scale gives them bargaining power over suppliers, providing a competitive edge

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 late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP). The market dropped. But that was an opportunity. 
• There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said “Buy the deal, buy in the market. It’s cheap and vulnerable.”
• Exedy is up 21% since. On 17 June, activist Murakami-san’s group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. 

• BrainBees Solutions is looking to raise up to US$500m in its upcoming India IPO. 
• FirstCry is India’s largest multi-channel retailing platform for Mothers’, Babies’ and Kids’ products in terms of GMV, for the year ending Dec 2022 (9M23), according to RedSeer.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about its updated financials in the RHP.

• Ola Electric (1700674D IN) ‘s IPO appears attractive versus peers based on valuation analysis, supported by detailed sales and revenue projections.  
• Expect strong near-term revenue growth driven by its dominant market presence, e-mobility expansion, and potential entry into the e-motorcycle segment.
• With a significant head start in the rapidly growing e2W sector, Ola’s robust product lineup, competitive pricing, and strong brand make it a compelling EV play.

• BrainBees Solutions (0172540D IN), India’s largest multi-channel retailing platform for mothers’, babies’ and kids’ products, will launch an IPO to raise up to US$500 million.
• We previously discussed the IPO in Brainbees Solutions (FirstCry) IPO: The Bull Case and Brainbees Solutions (FirstCry) IPO: The Bear Case. In this note, we examine the RHP update.
• The RHP shows that positives (KPIs heading in the right direction, margin improvement, lower cash burn) offset the negatives (declining organic growth and deteriorating balance sheet).    

• CyberAgent Inc (4751 JP)  reported 3QFY09/24 results yesterday. Both revenue and OP grew YoY, while revenue beat consensus marginally, OP beat consensus by a huge margin.
• All three business segments showed strong recovery with notable improvement in gaming business as newly released titles perform well including the newly released UMA MUSUME: Pretty Derby movie.
• Media business reported OP for the second consecutive quarter and the company has plans to further strengthen monetisation around AbemaTV.

• Budweiser Brewing APAC (1876 HK)‘s  performance could improve from 2H2024, driven by a likely recovery in China’s premium beer market and favourable commodity prices.
• Stock’s upside potential from current price levels seem to outweigh downside risk.
• With a high dividend payout and strong free cash flow generation, Budweiser trades at a 5% dividend yield and an 11% FCF yield.

• Company issued 1H24 profit alert after market yesterday which significantly beat even the high-end sell-side expectations. 
• Impressive SSSG and store-level unit economics imply sizable potential for operating leverage and earnings growth in the mid to long term.
• The profit alert, along with 2Q operating data released earlier, reinforced our confidence in earnings estimates of RMB130 million/RMB300 million for FY24/25 respectively. 

• Luckin’s SSSG declined 20.9%YoY in the peak season, indicating diseconomies of scale for Luckin and a deteriorated competitive environment. We do not expect a quick turnaround in the near term.
• We think Luckin has limited capability to further raise its prices in 3Q24, and expect its NPM to be 11.9%/7.1% in 3Q24/4Q24 as the new norm.
• We keep SELL rating and lower TP to US$16.5/ADS. The stock trading at 20x/16x PE in 2024/2025, and we expect the NI to increase 15%CAGR in the next 2 years.

• Danish jewelry company specializing in customizable charm bracelets
• Over 70% of business comes from charms, with prices ranging from £20 to £500
• Vertically integrated with production facilities in Thailand and Vietnam, shifting towards retail-heavy distribution and expanding into lab-grown diamonds market; primarily catering to women customers.

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.

• DigiPlus Interactive (PLUS PM) is the Philippines platform for Bingo Plus and other e-casino games, trading at 7x in the midst of >100% growth in revenue/profitability in 2024. 
• The company is net cash with a >50% ROE and is in an industry forecast by PAGCOR (regulator) to grow at least 15% CAGR in the future years.
• We expect explosive Q2 revenue/profit growth of 226%/298% YoY which would act as a share price catalyst. We calculate a dividend of 0.80-1 peso/share (30-40% payout ratio), equating to a 4-5% yield.

• The Sep 2024 Nikkei 225 Review base date is here. As before, I see one ADD, one DELETE, one capping, and one Very Dark Horse.
• The rules are clear, but not. This causes confusion. There may be unwritten rules keeping the Very Dark Horse out til next time.
• The Nikkei Index Team announced Fast Retailing (9983 JP) would be capped. I didn’t expect that now. That means $2.2bn+ of selling 30Sep and a reverse funding trade.

• On 10 June, Sun Corp subsidiary Cellebrite DI (CLBT US)‘s SPAC sponsor True Wind Capital launched a Tender Offer for 19% of SunCorp at a premium but discount to NAV.
• The price was too low. CLBT shares rose. They lifted the TOB price by 8% to ¥4750. Still too low. It was trading there. Now they have lifted to ¥5500.
• Now a 49% premium to undisturbed, 29.4% premium to all-time high prior to the first tender. Changes in terms means this could get done. More bullish than it looks.

• True Wind has increased its partial offer for Sun Corp (6736 JP) to JPY5,500 and materially lowered the minimum number of shares to be purchased from 3.3m to 1.1m.  
• True Wind’s previous two offers were a non-starter due to an unattractive price and an onerous minimum acceptance threshold. The final offer addresses both these issues. 
• The offer will succeed due to the low minimum acceptance threshold and the 25% price uplift vs. the 19% value increase in the Cellebrite stake (since the offer announcement).

• Ola Electric is a vertically integrated pure EV player in India with both technology and manufacturing capabilities for EVs and EV components (including battery packs, motors and vehicle frames).
• The company’s much awaited IPO is opening for subscription on Friday, and this insight focuses on new data points from the company’s latest Red Herring document (RHD).
• Our analysis shows that the company’s top line has continued to expand driven by volume while there has been significant reduction in operating losses in FY03/2024.

• We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in August 2024, among which 2 are in KOSPI and 39 are in KOSDAQ.
• These 41 stocks on average could be subject to further selling pressures in August and could underperform relative to the market.
• The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in August include APR, Fadu, and Kuk Il Paper.

• Today’s news indicates Hankook Tire found contingent liabilities in Hanon Systems’ finances, meeting conditions to break the May agreement and putting the deal on indefinite hold.
• Hankook Tire plans to adjust the new share price first, then the existing share price, while Hahn & Co, unable to delay its exit, will likely accept it.
• With Hahn & Co likely to accept Hankook Tire’s price adjustment request, consider a long-short setup: Hankook Tire may benefit from positive momentum, while Hanon Systems faces negative dilution.

• Samsonite is a global luggage leader with three major brands: Samsonite, Tumi, and American Tourister
• Despite challenges during COVID, Samsonite has successfully executed a turnaround by closing stores and improving sales and margins
• The stock is undervalued in Hong Kong, with plans for a secondary US or European listing in the near future, potentially offering a 100% upside opportunity.

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

• India’s electric 2-wheeler sales nosedived after March 2024 as the government reduced incentives.
• The price gap between electric 2-wheelers and their ICE counterparts has widened significantly with lower incentives.
• Despite the overall slowdown, Ola Electric (1700674D IN) ‘s steep market share rise highlights its product prowess, competitive pricing capabilities, and strong brand.

• One of the biggest stories in the Korean e-commerce sector this week has been TMON and WeMakePrice filing for court receivership due to liquidity crisis. 
• Singapore’s Qoo10 is the controlling shareholder of TMON and WeMakePrice. Young-Bae Ku is the largest shareholder of Qoo10 with a 42.77% stake, followed by KKR with a 25.65% stake. 
• Competitors such as E-Mart and Coupang are most to benefit. PG companies such as KG Inicis and NHP KCP are negatively impacted. 

• We compile a list of ten high-yielding/net cash or low-net debt stocks in HK’s apparel/footwear value chain. HK is a pariah for investors, and trailing dividend yields are approaching 6-20%. 
• As in other insights, we don’t estimate future earnings for all companies, but we indicate if the company has quality by measuring long-term ROCE (average five years).
• By expanding outside of China, most of these companies have derisked themselves from the trade war ( to the extent they can) and are also ready for earnings inflection.

• Ola Electric is now looking to raise about US$730m 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 notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.

• Earlier this month, WH Group (288 HK) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,
• These ops accounted for 54% of WHG’s FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.
• We’ve been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. 

• Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), is seeking to raise up to US$734 million. 
• We previously discussed the IPO in Ola Electric IPO: The Bull Case, Ola Electric IPO: The Bear Case and Ola Electric IPO: The Investment Case. 
• Our valuation analysis suggests that the IPO price range of Rs72-76 per share is attractive. Therefore, we would participate in the IPO.

• We screen for stocks at the extreme ends of their positioning or momentum ranges among active Emerging Market equity funds.
• High Positioning, Negative Momentum: BYD Company Limited Class H, Novatek Microelectronics Corp.
• Low Positioning, Negative Momentum: Banco Bradesco SA Pfd, LG Chem Ltd.    

• Shimano’s Q2 results exceeded expectations with revenue and operating profit significantly beating estimates despite a YoY decline.
• Full-Year revenue and operating profit guidance were revised upward, reflecting improved performance and aligning with analyst consensus.
• Our estimate for FY25 was significantly raised; despite full valuations, further recovery and potential shareholder returns offer continued bullish outlook.

• Inflation is encouraging customers to seek out discount chains, led by PPI’s Don Quijote. 
• Backed by expansion of private brand lines and more food lines, as well as higher sales to tourists, PPI has been posting record results.
• There continues to be high expectations for further growth at home and abroad.

• Tesla is a polarizing company with both enthusiastic supporters and skeptical critics.
• The company has the potential to become the most valuable in the world if it solves autonomous transportation.
• The debate around Tesla is focused on its Full Self Driving software, which has recently transitioned to a neural net architecture and is best experienced firsthand at a Tesla delivery center.

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.

• Ola Electric is now looking to raise about US$730m in its 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 notes, we looked at the company’s past performance. In this note, we will talk about valuations.

• Companies that have increased their valuations over the past year are those with higher valuations and have further increased their ROE and ROA, resulting in even higher valuations.
• The difference between the characteristics of companies whose valuations increased and those whose valuations did not change over the past year is the foreign ownership ratio.
• Companies with low foreign ownership have less access to overseas investors’ suggestions for solving individual company problems, which is why they are slow to act to improve capital profitability.

• V-Mart Retail (VMART IN)  is an omni-channel value retailer, providing a range of products aimed at Bharat’s middle and lower middle class
• The company has implemented a cluster strategy that has supported its expansion across India. In FY24, V-Mart opened 46 new stores nationwide.
• Being over-indexed to value, V-MART has posted slower revenue growth compared to the recent past. New Warehouse and tigher control over inventory could boost cashflows further. 

• The Kirin Holdings (2503 JP) Tender Offer to buy out minorities in Fancl Corp (4921 JP) closes today. Or at least the current one does. 
• The original deal announced was light, and the stock has traded above terms since the announcement, with one fund buying up to 7.94%.
• I expect Kirin to extend and bump next week, or bump/extend now, depending on their visibility on Fancl Q1. 

• Today after the close Stanley Electric (6923 JP) announced a salutary Q1 result which was “ahead of in-line” in most metrics towards unchanged H1 and FY guidance. 
• The company also announced a BIG on-market buyback at 8.1% of shares out, to be bought back with a delayed start over the 7.5mos starting 13 August.
• At last price, the buyback is ~10mm shares. The details are interesting and are worth a look. 

• Back on the 18th, the Sirivadhanabhakdi family-backed Thai Beverage (THBEV SP) announced it would swap its 28.78% stake in Frasers Property Ltd (FPL SP) with THBEV-affiliate TCC Assets.
• Under the agreement, TCC will transfer a 41.3% stake in food and beverage play Fraser And Neave (FNN SP) to THBEV, lifting THBEV’s holding to 69.61% from 28.31% currently.
• The share swap triggers no Offers for either F&N or FPL. THBEV says it has no plans to privatise F&N  … at the moment.

• The Ola Electric (1700674D IN) IPO will see the company and existing shareholders sell 808.6m shares at a price range of INR72-76/share, valuing the company between US$3.79bn-US$4bn.
• Ola Electric (1700674D IN) will have a float of around 10% at the time of listing and that will increase to around 20% after the lock-up on anchor investors ends.
• Ola Electric (1700674D IN) could be added to global indices in February and March 2025, but inclusion in local indices with meaningful tracking assets will take longer.

• One of the important factors of big changes at the Korean chaebols is the age factor of the chairman/honorary chairman of each of these conglomerates.
• In this insight, we provide the shareholding ownerships and ages of the top 10 Korean conglomerates where age could become a major factor in impacting big changes that could occur.
• Among the 10 conglomerates listed below, Hyundai Motor Group, Celltrion Group, and SK Group have shown greater willingness to improve their shareholder return policies.

• We visited convenience stores to look for China Resources Beverage products.
• The company is in a price war with Nongfu Spring, for both drinkable water and beverages.
• Some CRB products, such as plum syrup, do not have any competitors in physical stores.

• Tesla’s stock dropped 12% post Q2 earnings, due to a 7% decrease in auto revenue, reflecting broader financial struggles despite a 15% rise in quarterly EV deliveries.
• Trump’s potential repeal of EV subsidies could reduce EV sales by 27% by 2030, but Tesla’s lower reliance on imports may mitigate the effect of increased tariffs.
• Elon Musk’s $5 billion investment in his AI startup xAI raises concerns about potential distractions from Tesla, even as he leverages political shifts to benefit Tesla.

• Low volatility investing has taken the mantle from Dividend yield as the top strategy during July
• BYD Electronics (285 HK) and Alibaba Group Holding (9988 HK) are rated BUYs as their businesses show improvement. 
• Kingdee International Software (268 HK) is seeing a softening in its SME business, however there is  potential to gain market share from foreign ERP companies given the pledged government’s policies.

• Earnings Miss: Tesla’s Q2 revenue increased by 2% to $25.5 billion, but earnings per share were 52 cents, missing the forecast of 62 cents.
• Record Revenue in Energy: Tesla achieved record revenues and profits in its energy sector, with 130% QoQ growth in energy storage deployments and regulatory credit revenues.
• Stock Reaction & Competition: Tesla’s stock dropped over 8% after-hours, influenced by increased competition, production challenges, and a notable decline in auto revenue by 7% to $19.9 billion.

• Ola Electric (1700674D IN) , India’s leading electric 2-wheeler backed by Softbank Group ‘s Vision Fund, will launch its USD 735 million IPO on Friday, August 2.
• The IPO pricing suggests a post-money equity valuation of around USD 4 billion, significantly lower than its earlier funding levels.
• Government incentives for EVs are being revised, with the current scheme valid only until the end of September, creating uncertainty that has possibly impacted valuations.

• Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), will launch a US$660 million IPO at a lower US$4.5 billion valuation (vs. the previous US$7-8bn target). 
• We previously discussed the IPO in Ola Electric IPO: The Bull Case and Ola Electric IPO: The Bear Case. In this note, we examine the latest updates in the RHP. 
• The investment case rests on rising market share in a growing market, rapid growth aided by product diversification, path to profitability supported by lower losses and declining cash burn.

• 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, the coming week will see Sanil Electric (062040 KS) list, while Akums Drugs and Pharmaceuticals books will open and Ola Electric too might be launched.
• On the placement front, the past week was relatively quiet after a few hectic weeks.

• Xiaomi’s shipments increased by double digits, but Apple’s shipments decreased in China in 2Q24.
• Alibaba’s Taobao and Tmall platforms have waived the AliPay fee for retailers.
• Amazon will open a store on JD.com next Black Friday.

• Prosus has become more shareholder-friendly and responsive, driven by management remuneration incentives
• The drop in discount from 2022 to 2023 was influenced by these incentives, but the lack of their extension for 2024 has led to an increase in the discount to over 40%
• Investors have an asymmetrical opportunity to benefit from Prosus’ discounted value, especially with its valuable stake in Tencent

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.

• It is very difficult to ensure the independence and transparency of a committee when the board of directors is staffed with people who are aligned with the president’s wishes.
• Companies with high ROE have superior corporate governance, due to effective overseas investor’s engagement, while companies with low ROE show unclear policies for improving ROE, despite having formalized board practice.
• To improve the effectiveness of the board, companies should appoint people to the board who will help expand the value of the company, and use engagement with overseas investors etc.

• Introduction (If you hate my story-telling, please scroll to the Background section) A lady once asked me a thought provoking question, “why have children?”
• Redirecting my gentle gaze to the ceiling and stressfully clasping a chunk of hair on the back of my head, I pondered and dug deep, with the intent of conjuring an impressive answer.
• The testosterone in me blurted, “to pass down the huge wealth I would amass some day, my children are my legacy!” and my traditional Eastern roots interrupted, “so someone would take care of me when I’m old and decrepit!”

• The updated business analysis of Kimberly-Clark reveals a mixed financial landscape rooted in strategic endeavors and market-specific challenges, which calls for a calculated evaluation for potential investors.
• During the second quarter of 2024, Kimberly-Clark underscored a strategic focus on driving volume and mix-driven gains, particularly evident in significant geographies such as the U.S., China, and the U.K. This initiative aligns with their innovation-led growth strategy aiming at revitalizing their “Powerhouse” categories, which is indicative of their proactive response to market demands and consumer preferences.
• 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.

• General Motors Company (GM) delivered a robust financial performance in the second quarter of 2024, demonstrating strong operational execution across its varied segments, enhancing confidence in its updated forecasts for the year.
• The overall sentiment from the review reflected both substantial achievements and some risks to be navigated in the future growth strategy.
• A significant positive was GM’s record revenue generation during this quarter, bolstered by a high-performing lineup of internal combustion engine (ICE) trucks and SUVs, and a growing portfolio of electric vehicles (EVs) outpacing the broader market growth.

• Comcast’s second quarter earnings call highlighted various areas of performance in the company’s operations.
• On the broadband front, despite the competitive market conditions prevalent in recent quarters, Comcast’s strategy has been consistent, focusing on generating considerable broadband revenue growth through a balance between rate and volume.
• With an established customer base of 32 million subscribers, the company is implementing market segmentation.

• The Coca-Cola Company continued its strong momentum in the second quarter.
• The company’s resilient strategy as well as its consistent focus on leveraging its scale and growth mindset have contributed to solid year-to-date results.
• As a result, Coca-Cola has raised both its top and bottom-line guidance.

• On 24 July, 3D Investment Partners proposed to privatise Tohokushinsha Film (2329 JP) through a tender offer at JPY600-650 per share. A special committee will evaluate the proposal. 
• 3D’s privatisation plan, in its current terms, is a non-starter as the price is low, and its activism campaign has so far been met with the Board’s scepticism.
• The possible scenarios are that a white knight emerges to buy 3D’s stake/launch a counteroffer, 3D bumps the offer price, or the Board introduces a more ambitious MTM plan.

• 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: Sanil Electric (062040 KS) and Hyundai Motor India (1342Z IN) IPOs.
• Event-Driven developments: Fancl Corp (4921 JP), Furukawa Battery (6937 JP), Sun Corp (6736 JP), Canvest Environmental Protection Group (1381 HK), CPMC Holdings (906 HK), Greatview Aseptic Packaging (468 HK). 

• The high percentage of foreign ownership is a characteristic of companies that have improved capital profitability and increased valuations, which is effective for overseas investor engagement.
• If the system is revised to help collaborative engagement and the identification of substantial shareholders, some of the challenges will be eliminated for both investors and the company.
• To make the engagement more effective, investors should increase active funds and companies should decrease cross-shareholdings.

• Tesla remains a polarizing entity in the stock market, consistently capturing the imagination of investors with its bold vision and ambitious projects.
• The company’s latest earnings highlighted both its impressive achievements and notable challenges, leaving a mixed bag for potential investors, resulting in the stock going down.
• On the positive side, Tesla continues to lead the electric vehicle (EV) market with record revenues and promising advancements in autonomous driving technology.

• A double dose of StubWorld this week: both the implied stub for Amorepacific Group (002790 KS) and the simple ratio (Group/Amorepacific Corp (090430 KS)) are around lifetime low levels.
• Preceding my comments on Amorepacific 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%.

• China’s National Team was steadily buying ETF’s during and after the Third Plenum.  Southbound Connect Flows continue to be positive during July.
• Smoore International Holdings (6969 HK) , Xinjiang Goldwind Science & Technology (2208 HK) and Hisense Home Appliances Group Co., Ltd. H (921 HK)  benefited from positive news sentiment this week.
• Chow Tai Fook Jewellery (1929 HK) and ASM Pacific Technology (522 HK) suffered on negative news, while Meituan (3690 HK) continued its pullback in concert with the retail food sector.

• We expect Meituan’s C2Q24 rev. and non-IFRS NI to be 0.7% and 12.3% higher than cons, driven by resilient catering demand and eased competition.
• We expect Meituan in-store OPM improve to 33%/35% in 2Q24/2H24 supported by increasing commission rate and cutting BD cost.
• We maintain the stock as BUY rating and raise TP by HK$4 to HK$160/share to factor in the better profitability.

• Netflix reported its financial performance for the second quarter, highlighting key metrics that provide insights into its current standing and future direction.
• The company reported earnings per share of $4.88, exceeding Wall Street’s expectation of $4.74.
• Revenue for the quarter stood at $9.56 billion, slightly above the anticipated $9.53 billion.

• The NIFTY Index defied gravity and kept rallying higher for the past 8 weeks. According to our models it’s massively OVERBOUGHT and has been so for a while.
• While many other Asian markets have pulled back decisively, the NIFTY is just going higher and higher.
• Assuming it has its own uncorrelated drivers, where would it be a BUY again, if it pulls back this coming week? Let’s discuss this in this WEEKLY insight.

• Omnicom recently presented its results for the second quarter of 2024, highlighting a mix of positive dynamics coupled with the challenges inherent in a complex operational landscape.
• One notable strength in the results is the recorded 5.2% organic growth, spearheaded by a formidable 6.3% growth in the U.S. market.
• This growth was primarily driven by robust performances in advertising, media, and experiential disciplines.

• Mattel, Inc. experienced a significant boost in its stock price after news surfaced that the private equity firm L Catterton had made a takeover bid for the toy manufacturing giant.
• This development has attracted the attention of investors and fueled discussions about potential changes in the toy industry’s landscape, especially in relation to its long-time rival, Hasbro.
• Let’s delve into Mattel’s business operations and explore the potential valuation it could achieve through this deal.

• We are reiterating our Buy rating and $22.50 price target and slightly raising our projections after Betterware registered below consensus 2Q24 results, but reiterated their 2024 guidance.
• Further, while we view the 2Q miss as driven by product shortages and shipping issues which are, in the near-term, somewhat out of management’s control, we believe there were more than enough key positives, from continued turn in orders and top line at Betterware Mexico, further double-digit gains at JAFRA Mexico, earlier than expected turn at JAFRA USA and the start of expansion into the United States, for us to remain positive on BWMX and, with a dividend yield of over 9% to reiterate or Buy rating and $22.50 price target.

• D.R. Horton’s third-quarter 2024 earnings reflect the company’s ability to navigate a complex market landscape impacted by inflation and raised mortgage interest rates.
• Despite headwinds, the company managed a 5% increase in earnings, with a consolidated pretax income growth of 1% to $1.8 billion that could appeal to potential investors seeking steady performance.
• A vital positive from the results lies in D.R. Horton’s proven record of cash generation, producing $972 million from homebuilding operations within the first nine months ended June 30.

• Domino’s Pizza presented their Q2 2024 earnings wherein several key developments were noted that provide both an encouraging and concerning insight for investors.
• Encouragingly, the Hungry for MORE strategy adopted by Domino’s seems to be generating positive results, as evidenced by the consecutive-quarter growth in US comp performance driven by profitable order count growth, positive order counts across its delivery and carryout businesses, as well as across all income cohorts.
• The company also reported an improvement in its international comps and consistent earnings in line with expectations.

• Since the release of 3Q24 (YE August) results on July 10, the share price of Saizeriya (7581 JP) is up nearly 10%, greatly outperforming Nikkei during the same time frame. 
• The 3Q24 results showed that Japan’s operating profit finally improved, while China remained solid. 
• The company is currently trading at 24x 2025E PE with strong earnings growth.

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 indices in the December 2024 index rebal event.
• At present, 3 changes for the BSE 100 index and 7 changes for the BSE 200 index.
• The BSE 100 handling rules for names without futures and options (F&O) sometimes punish companies that have enjoyed good share price rallies and Zomato could get into such a trap.

• Sales rose 5.3% YoY to JPY318.9bn, driven by strong SI and IT infrastructure services; operating profit fell 3.9% YoY.
• FY12/24 sales forecast revised to JPY650.0bn (+6.6% YoY) due to Primagest acquisition and strong IT solutions performance.
• Segment forecasts: Consumer sales flat, Enterprise sales JPY236.2bn (+7% YoY), Professional sales JPY44.0bn (+9% YoY).

• We need to watch carefully to see whether cash flow will subsequently increase in the projects that the CB issuers have invested their proceeds in.
• Share prices of companies that announce equity financings, including CBs, usually decline. Besides the dilution, another aspect is the effect of the company’s announcement of the sale of its shares.
• In the case of CBs, the company should keep in mind that it sold the conversion rights of its shares for less than their actual call option value.

• GTX reported Q2 results missing our estimates as demand for turbochargers softened in quarter. The magnitude of the sales miss was amplified by deflationary cost pass throughs.  
• GTX was successful in maneuvering its cost structure at the beginning 2024 resulting in gross margin exceeding our estimate and adjusted EBITDA declining by a significantly smaller amount than sales. 
• We were already towards the low end of GTX’s previous guidance range anticipating uncertainty. Our adjustments to 2024 and 2025 adjusted EBITDA estimates are minimal.

• We are reiterating our Buy rating, projections and $3 price target for Vince after visiting stores in Long Island, Connecticut and New Jersey.
• We believe the company continues to roll out winning collections, with a focus on compelling hues (dark scarlet and blue waltz), new items (cargo pants, shrunken camisoles, silk hooded shirts and cardigan sweaters) and a deeper focus on key categories such as dresses.
• Further, we are also seeing continued newness and expansion in men’s, driven by jackets, button front shirts (in patterns and textures) and the beginnings of a colder weather focus on long sleeve items, including the return of the waffle shirt jacket.

• Shoppers Stop (SHOP IN) is a leading retailer in India specializing in fashion and beauty brands with 12 department stores, 7 premium home stores, and 87 specialty beauty outlets,
• SHOP has also launched its value retail format INTUNE in June 2023 generating excitement and interest around the same. 
• It seems SHOP is trying to play all cards of the retail game, i.e., premium, beauty, and value fast fashion, but so far has shown no signs of success.