Consumer

• Today after the close, Advantage Partners announced the intention to launch a TOB to take over Furukawa Battery (6937 JP) at ¥1,400 – a 26% premium to last.  
• This will require substantial time to obtain regulatory and foreign investment clearances so it is anticipated the Tender Offer will be launched at end-March 2025. I expect that is conservative.
• The price paid to minorities is a premium. But the price paid by the buyer is actually a takeunder. And it gets worse from there. 

• Furukawa Battery (6937 JP) recommended a pre-conditional tender offer from Advantage Partners, Tokyo Century Corp (8439 JP) and Furukawa Electric (5801 JP) consortium at JPY1,400, 22.6% premium to the undisturbed price.
• The precondition is approval under the competition laws of Japan and Thailand. The offer is long-dated and anticipated to commence in March 2025.
• While not a knockout bid, the required minority acceptance rate is not onerous. A long-dated offer presents a free option on a bump due to earnings upside or a counteroffer.

• True Wind has increased its partial offer for Sun Corp (6736 JP) by 8.0% to JPY4,750 and lowered the minimum number of shares to be purchased from 3.8 to 3.3m.
• True Wind’s offer has inadvertently spotlighted the valuation disparity vs the Cellebrite DI (CLBT US) stake, resulting in the shares trading through terms.
• True Wind’s revised offer will struggle to succeed as the 8% price uplift is materially lower than the 19% value increase in the Cellebrite stake (since the offer announcement).

• Garware Technical Fibres (GTFL IN) focuses on value-added products and has increased R&D investment significantly, with substantial growth in sports nets and geo-synthetics.
• The company’s strong export market presence, high-margin profile, and diversification will improve the margins in the future. 
• With refocus on the domestic market and growing demand for value-added products, Garware Technical Fibres (GTFL IN) is poised for significant growth with capex coming online.

• The CSRC has approved Midea Group Co Ltd A (000333 CH)‘s application to issue H-shares to be listed on the HKEX (388 HK). 
• Under the approval, Midea Group Co Ltd A (000333 CH) can issue up to 650.85m shares. Depending on the H-share discount, that could raise up to HK$43.6bn (US$5.6bn).
• The IPO is likely to be smaller and will depend on market conditions and the discount demanded on the H-shares. That in turn will determine index inclusion for the H-shares.

• Trent Ltd (TRENT IN) is a leading retail company in India known for its diverse range of fashion and lifestyle brands like Westside and Zudio. 
• With its own labels, operating efficiencies, and leverage at work, Trent has been able to expand its margins substantially. 
• We anticipate the strong operational performance to continue. We believe it will take a couple of years for peers to catch up to Trent’s execution prowess.

• The removal of their cross-holding structure has had a negligible effect on the respective discounts to NAV for Prosus NV (PRX NA) and Naspers (NPN SJ).
• We have seen a remarkable turnaround in Prosus’s operating performance during FY2024 and the market will focus on whether the new CEO can achieve his ambitions for “profitable growth”.
• The open-ended share repurchase program will continue as long as the discount remains “elevated”.

• Few companies file their annual securities reports prior to AGM, and since they are filed 1-2 days prior to AGM, there’s insufficient time for a thorough review of useful information.
• Profitable companies that gain the support of overseas investors further increase their return on capital through engagement, and the gap between them and those that don’t will continue to widen.
• Since reducing policy shareholdings will reduce the percentage of voting rights that unconditionally favor company proposals, engagement will be more effective and speed up the process of management improvement.

• Hyundai Motor (005385 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
• HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
• In our previous notes, we have looked at the company’s past performance and undertaken a peer comparison. In this note, we talk about valuations.

• Leon’s is a Canadian retailer of furniture and appliances that is majority-owned by the Leon’s family.
• The company has a history of delivering high returns on net tangible capital and compounding earnings per share at a steady rate.
• Leon’s holds a significant amount of undervalued real estate assets on their books, and has expressed intentions to monetize these assets through sale or development to potentially create value for the company.

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• Since the US$1.4 billion secondary placement announcement, ASICS Corp (7936 JP)’s shares are up 0.9% from the undisturbed price of JPY2,564 per share (12 July).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asics’ shares have deviated from the pattern of previous large placements.
• The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• Kirin Holdings (2503 JP)’s JPY8,620 offer for Fancl Corp (4921 JP) closes on 29 July. The shares have traded above terms for 25 out of the 26 trading days.
• MY.Alpha Management has amassed 10.3 million shares (8.51% ownership ratio) with several purchases above terms. MY.Alpha could catalyse other shareholders to rally against a light offer. 
• The emergence of MY.Alpha, the high volume above terms, peers re-rating, the required minority acceptance rate, and an offer unattractive to historical trading ranges increase the probability of a bump. 

• Today, the final day of the Tender Offer that True Wind Capital launched on 10 June 2024 to buy 19% of Sun Corp (6736 JP), TWC raised its price to ¥4,750/share./
• They also lowered their minimum from 3.7934mm shares (17.0%) to 3.3472mm shares (15.0%).
• As Cellebrite DI (CLBT US) had traded higher, SunCorp had too, and even though shares fell today, they are at ¥4,785/share.

• The Hong Kong market trades about 30% below analysts’ estimated 12 month target price.
• Analysts are raising forecasts forXiaomi Corp (1810 HK) as it meets success with new phone rollouts and its EV business. 
• Sunny Optical Technology Group (2382 HK) had a positive profit alert and Minth Group Ltd (425 HK) is showing growth in its international business. Both are rated BUY from analysts.

• General merchandise retailer Warehouse Group Limited (WHS NZ) (TWG) has announced it has received an approach from Stephen Tindall and PE outfit, Adamantem Capital Partners
• Founder and major shareholder Tindall holds a shade over 50%. He launched a $1.6bn privatisation attempt in 2006, but Foodstuffs and Woolworths Ltd (WOW AU) effectively blocked the Offer.
• The approach arrives after TWG’s shares trade around multi-year lows. 

• Trent Ltd (TRENT IN) and Bharat Electronics (BHE IN) are shoo-ins to replace LTIMindtree (LTIM IN) and Divi’s Laboratories (DIVI IN) in the NIFTY Index (NIFTY INDEX) in September.
• Passive NIFTY Index trackers will need to trade at least 3.3x ADV and 7.7x delivery volume on the stocks. There is some opposite flow from Nifty Next 50 Index trackers.
• Cumulative excess volume has increased in all stocks but there are some stocks where there will still be more positioning over the next few weeks.

• Woori Bank completed a block deal sale of 11 million shares of Kumho Tire Co (073240 KS) (3.83% of outstanding shares) on 18 July. 
• After the recent sales by Woori Bank and the Export-Import Bank of Korea, the creditors’ stakes in Kumho Tire has been reduced to 19.17%.
• Despite Kumho Tire’s recent improvement in financial performance, we are more concerned about the additional stake sale by the financial institutions that still own 19.2% stake in the company. 

• Thai Beverage will offload its entire stake in Frasers Property Ltd to TCC Assets in a share swap for an increased share in Fraser And Neave streamlining its business focus.
• The share swap values Fraser And Neave on a par with peers which is at a significant premium to the share price but Fraser And Neave was excessively undervalued.
• Thai Beverage deserves to trade on a higher multiple given its pure-play status and a succession of recent restructurings including Serm Suk and Oishi Holdings. 

• Bloks Group (1850960D CH) is looking to raise US$300m in its upcoming Hong Kong IPO.
• Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
• In this note, we will talk about the positive aspects of the deal.

• Bloks Group (1850960D CH) is looking to raise US$300m in its upcoming Hong Kong IPO.
• Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
• In this note, we will talk about the not so positive aspects of the deal.

• Discounts likely set for a re-rating as market continues to overreact to appointment of CEO amid good set of results.
• The discounts of both Naspers and Prosus have continued to widen since the appointment of Fabricio Bloisi to Group CEO was announced in May (effective 10 July).
• At the end of June, the group released its strongest set of results in years, delivering on consolidated ecommerce profitability ahead of target.

• A group of shareholders aims to raise around US$1.3bn via selling around 11% of ASICS Corp (7936 JP).
• In our earlier note, we talked about the placement and ran the deal through our ECM framework.
• In this note, we talk about the updates and share price performance since then.

• 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  to see two more listing, with both likely to do well.
• On the placement front, Japan continued to dominate the ECM flows, with India, Taiwan and Australia joining in.

• Blue Moon started with a kitchen spray cleanser in 1994, but now focuses on liquid detergents in China
• While they have strong marketing and scale, their competitive advantages are weak compared to domestic competitor Liby
• Intensifying competition and various factors have led to a decline in Blue Moon’s market share, raising uncertainty about their future in the industry

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• Alimentation Couche-Tard is a global leader in convenience stores and gas stations, with a stable and recession-resistant business model.
• The company has a strong management team focused on consolidating the fragmented c-store industry and generating solid free cash flow.
• ATD stock is trading at a reasonable multiple with potential for mid-teens FCF per share growth, making it an attractive long-term 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.

• The fact that institutional investors consider whether a company has zero female board members when voting has led to decrease in the number of companies with zero female board members.
• Since fewer companies have zero female board members but a minority of companies have at least two female board members, achieving 30% female board members seems somewhat of a hurdle.
• While tenure and concurrent service of female board members are problematic, the starting point is to ensure that women have  a 30% voice on the board and to promote diversity.

• News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
• Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
• Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
• Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.

• I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals discussed this week on Smartkarma: Samson Holding (531 HK)‘s Scheme, and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
• Key updates took place on Capitol Health (CAJ AU), Alumina (AWC AU), Ansarada (AND AU), TCM (570 HK), CPMC  (906 HK), Fancl (4921 JP),and Hollysys Automation Technologies (HOLI US).

• Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. 
• Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  
• Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. 

• Share price under pressure due to industry challenges and transition of new product line-ups.  
• 2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth. 
• LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow. 

• Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.  
• There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward. 
• Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY. 

• Thai Beverage(THBEVSP)‘s  proposed swap deal involves acquiring a 41.3% stake in F&N from promoters, seemingly at book value than fair market value, expected in case of an arms length transaction.
• Fraser And Neave (FNN SP)  holds a 20.3% stake in Vietnam Dairy(VNM VN), Vietnam’s leading dairy player, which is now trading at nearly a 40% discount to the investment value.
• Understanding TCC Assets’ ownership history of F&N may help clarify the deal’s valuation rationale.

• We spoke with multiple channels covering 3Ws, 2Ws, and 4Ws to understand the current dynamics of the Electric Vehicle (EV) scene in India.
• Adoption of E-3 and E-4 Wheelers is hindered by high prices, range issues, inadequate charging infrastructure, and platform stability concerns.
• E-2 Wheelers show resilience with stable sales led by aggressive pricing from Ola Electric (1700674D IN). 

• Early 6/18 pulled June sales into May, leading to disappointing June NBS data. Combined, online retail grew 5.1% yoy in May/June, and 6.4% yoy in 2Q24. 
• PDD remained the top shelf-ecommerce platform with GMV growing ~20%, followed by Taobao/Tmall (TTG) at ~6-7%, and JD and VIPS at ~2-3% yoy. 
• We expect JD and BABA to report slight earnings beats and guide upbeat on continued profitability improvement in 2H24. 

• High ratio of female non-regular workers and low ratio of women in management positions are factors behind the gender wage gap. Government expects to correct the gap in individual companies.
• Companies should improve making it easier for employees returning jobs after temporary leave for childcare/childbirth, and treating them in the same position they were before leaving after temporary leave.
• In order for women to have access to higher education and for women to work without leaving the workforce temporarily, the values that endorse gender inequality must be removed.

• The ¥500bn Offering of Honda shares is now priced (¥1,664.5/share) making it ¥497.46bn. Bookbuilding for retail – 80% of the book – is now. The price today closed at ¥1,665/share. 
• The Offering has follow-on “non-discretionary” demand which is non-negligible. It is worth understanding the amounts and timing.
• The lockups and non-discretionary demand, along with Honda’s relative cheapness as a large cap OEM and likely upcoming offerings on competitors means it has support.

• Thai Beverage(THBEV SP)  has proposed a share swap-deal with a promoter company to acquire additional stake in FraserAnd Neave(FNN SP)  in exchange for Frasers Property at negotiated valuations, not market prices.
• Post-Completion of the swap deal with the promoter-owned entity, which requires shareholder approval, Thai Bev will hold a 69.6% stake in F&N and no stake in Fraser Property (FPL).
• If the stake swap were valued at yesterday’s closing share prices, it would imply a drop in the total stake value for Thai Bev after the proposed deal.

• S&P revised MELI’s credit rating outlook to positive from stable and affirmed its BB+ issuer credit rating.
• MELI’s credit metrics are considerably stronger than its peers in the high-yield rating category
• MELI’s bonds have arguably already been trading at the investment grade level, supported by the company’s solid credit metrics for the rating category.

• We are reiterating our Buy rating and projections and raising our price target to $20 (from $17) after meeting with Lands’ End management at their headquarters in Dodgeville, Wisconsin.
• We believe management is laser focused on continuing to drive higher overall returns to the company, from shifting the product mix, lowering inventories, realizing higher pricing, focusing on features and stories to drive deeper customer interaction and loyalty, deepening licensing penetration on non-core categories, expanding internationally and driving stronger results at the Outfitters segment.
• The emphasis on leveraging the highly trusted Lands’ End moniker to maximize brand equity, drive higher returns and create an even more compelling lifestyle story is still in the early stages and, we believe, will drive multi-period growth.

• Author may buy or sell securities related to discussed issuer without informing readers
• Information presented is believed to be accurate but not guaranteed in terms of accuracy or completeness
• Author’s views are opinion-based and subject to change at any time; readers advised to do their own research and not base investment decisions on the note

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• We are reiterating our Buy rating, $22.50 price targe and projections for Betterware de Mexico with the company reporting 2Q24 (June) results after the close on Thursday.
• We believe, while the Betterware division may be a drag (due primarily to foreign exchange), JAFRA continued to shine and the expansion into the United States has slowly begun to gain momentum at both Betterware and JAFRA.
• Further, we expect management to remain positive over key trends and for the company to once again reiterate overall guidance for 2024.

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.

• Anton Oilfield
• Health And Happiness (H&H)
• Vedanta Resources

• We analyze the audited annual report of Perfect Medical Health (1830 HK) released on the 16th of July. We also analyzed the company’s FY24 presentation. 
• The key takeaway is that the company will endeavor to improve its efficiency by cross-selling more services through Beauty Supermarket and expanding the sleep therapy business with Goku.
• Trading at a 12.5% dividend yield with 17% of its market cap in cash and >50% ROEs, the business is solid and worth exploring as an investment. 

• Hyundai Motor (005380 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
• HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
• In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison.

• An interview in the Nikkei of Koito Manufacturing (7276 JP) CFO Takahito OTAKE offered the comment that Koito Mfg expected a shareholder return of 130% a year through March 2029.
• The stock popped 19% after lunch on that comment, then fell back to end up 5.0%.
• This is the same pop as we saw end-March. Then it was +24.6% and it stayed up the next day. Same reason for the pop. This was an echo.

• Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  
• The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  
• Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. 

• Furniture trader Samson Holding (531 HK) has announced a Scheme from Shan Huei Kuo, Samson’s Chairman. 
• The Cancellation price is $0.48, a 50% to last close. The premium is more pronounced if going back a month. The price is final.
• This looks done. But Samson is an illiquid micro cap.

• Isetan Shinjuku expects to post sales in excess of ¥400 billion this year, a record for a single retail store, although most of the growth is from inbound tourists. 
• But Isetan-Mitsukoshi is working to ensure longer term stability through more sophisticated databases and personalised marketing.
• At the same time, it will make better use of real estate assets, investing ¥500 billion around Isetan Shinjuku alone.

• We are initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds.  We are optimistic about MELI’s overall financial and business risks.
• For EM investors, we prefer MELI 2.375% 2026 notes with a 10-30 bps compression potential. These bonds are trading wide compared to the Brazilian Sovereign and the benchmarks. 
• For US investors, MELI’s risk-reward symmetry is especially compelling, given that 2031 bonds are trading wide by around 75 bps compared to global e-commerce and fintech peers. 

• Since Japan’s gender gap index ranks 118th out of 146 countries, stagnating in the lower group, it will take a considerable amount of time to resolve the issue.
• A shortcut to the improvement of women’s status is to greatly improve the gender ratio in the legislature in order to change the current framework for improving women’s status.
• Behind the lagging 103rd place in the ratio of female managers is the lack of progress in higher education for women.

• •It has been the summer of renewals at ADEA leading to a directionless stock since ADEA reported Q1 results. ADEA has announced several renewals, LBTYA, since the beginning of May
• We are now more than two weeks into the third quarter lending credibility to why the shares have yet to react positively
• We were already forecasting the probability of a new license occurring later in the year and are keeping our earnings estimates unchanged heading into ADEA reporting second quarter results.

• GameStop, once the epicenter of the retail investor revolution led by the enigmatic Roaring Kitty (Keith Gill), has seen a dramatic resurgence in attention.
• Gill, who became famous for his substantial stake in GameStop during the 2021 meme stock frenzy, recently reappeared with jaw-dropping claims of substantial holdings in GameStop and Chewy.
• However, the recent results and financial disclosures reveal a company that, despite superficial improvements, is fundamentally unstable.

• D.R. Horton, America’s Builder, reported financial outcomes for the second quarter of fiscal 2024 indicating a positive trajectory in both revenue and profit generation.
• Despite challenges related to elevated inflation and mortgage interest rates, the company has demonstrated solid performance with an earnings increase to $3.52 per diluted share, from $2.73 in the prior-year quarter.
• Consolidated revenue increased by 14%, reaching $9.1 billion; and home sales revenue surged by 14% to approximately $8.5 billion on 22,548 home closings.

• At the beginning of this month, we got a scoop from Reuters about a US$3bn selldown of Honda Motor (7267 JP) by P&C insurers and others. 
• We knew this was coming at some point. The FSA had pushed the insurers to unwind cross-holdings, and it is otherwise of the zeitgeist. 
• It came out as heavily retail-oriented, and the supply/demand details are otherwise interesting. To boot, there is an EPS boost to come.

• Since the US$3.3 billion secondary placement announcement, Honda Motor (7267 JP)’s shares are down 5% from the undisturbed price of JPY1,791 per share (4 July).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Honda’s shares have followed the pattern of previous large placements.
• The offering will likely be priced on 17 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• Samson Holding (531 HK) disclosed a Cayman scheme privatisation offer from Mr Samuel Kuo (Chairman) at HK$0.48 per share, a 77.8% and 50.0% premium to undisturbed and last close price, respectively. 
• The key condition will be approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The offer price is final.
• The attractive takeover premium, lack of shareholders holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small cap illiquid stock.

• Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.0 billion at a valuation of US$17 billion.
• In Hyundai Motor India 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 market share losses in the key SUV sub-segment, bottom-quartile revenue growth, higher royalty rates and dividends to Hyundai ahead of the IPO.

• Kalyan Jewellers (KALYANKJ IN) , a leading jeweller with a pan-India presence, is expected to deliver strong sales growth, and improving returns with its asset-light expansion plans.
• Indian weddings have transformed from simple rituals to elaborate celebrations requiring heavy spending on jewellery and specialty apparel, reflecting rising affluence and media influence.
• Wedding related jewellery demand constitutes 60% of India’s total gold jewellery demand and remains resilient regardless of price changes.

• Limoneira is an agribusiness with underutilized land and water assets, resulting in poor returns for shareholders
• Peter Nolan, a successful asset manager from Leonard Green, has joined the board along with Global Alpha, indicating a potential turnaround in capital allocation and strategy
• Nolan’s leadership is expected to unlock the potential of Limoneira’s assets, leading to significant returns for shareholders

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• Grocery Outlet reported fiscal Q1 2024 results that reflected mixed performance, illustrating both operational challenges and promising growth prospects.
• During the quarter, the company recorded a 7.4% increase in sales, achieving $1.04 billion, spurred on by a 3.9% rise in comparable store sales and reinforced by robust transaction count growth of 7%.
• This reflects Grocery Outlet’s continued customer appeal and effective store expansion strategy, having opened six new stores during this period.

• Strong American harvest driving downward pressure on Wheat, likely to offset reductions in EU and Russia.
• Corn saw modest recovery, driven by muted ending stocks, below trade estimate, but the harvest is going to be the third largest ever.
• US soybean production remains muted, in line with the Acreage report, and led to moderate recovery in early trading on Friday, but bearish sentiment persists.

• The key for high growth in 2023/24Q1 lies in its assembly character toys with renowned IPs,which may not be sustainable or even collapse if Bloks fails to renew license agreements.
• The advantages of Bloks in development prospects, self-developed IPs, brand stickiness are not obvious. The latest valuation reached RMB7.2 billion, but the founder has already cashed out before IPO. 
• Hong Kong stock market has been “lukewarm” to toy companies. Except Pop Mart, valuation/share price of peers are quite weak.How to gain investor/market’s recognition for Bloks is a question mark.

• Our estimations for FY 2024 annual revenue range at around $10,827 million and for 2025 at around $12,090 million.
• The company’s annual revenue reached $9,995 million in 2023 compared to $10,276 million in 2022, posting a decrease of 2.73%.
• Toll Brothers gross profit for FY 2023 was $2,634 million increased by 5.95% com- pared to $2,486 million for the corresponding period of 2022.

• 15 shareholders are looking to sell between 73.9-85m shares (US$1.2bn-US$1.38bn) of ASICS Corp (7936 JP) in a secondary offering that will likely be priced on 23 July.
• ASICS Corp (7936 JP) has also announced a huge upward revision to its sales and profit forecasts with EPS expected to increase 61% from earlier estimates.
• Passive buying will be extremely limited in the short-term with the downward pressure offset to a large extent by the sales and earnings revisions.

• Hong Kong market still trades at a substantial discount to Analyst year end price targets.
• Budweiser APAC is dependent on China’s consumer to lift sales while Anta Sports is targeting increased sales from the upcoming Paris Olympics.
• Sunny Optical is seeing substantial growth from it EV segment and Haitian continues to grow its international sales.  Shineway RX is a rare value play in the pharmaceutical sector.

• A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP).
• The possibility of such a selldown was flagged by Reuters prior to the deal launch.
• In our earlier note, we spoke about the deal dynamics. In this note, we talk about the updates since then.

• First, we offer a recent history of Didi going back to its June 2021 IPO 
• Next, we review the company’s annual results from 2020-23 plus Q124
• Finally, we try to answer the question, “Does Didi need to raise cash soon?”

• This is the final installment in our series on the APAC Luxury Industry, where we highlighted that luxury travel might offer more appealing opportunities than traditional luxury goods.
• While travel has surpassed pre-pandemic levels, traditional luxury goods have shown very low demand in recent months.
• Below, we analyze recent trends in luxury travel for Mandarin Oriental International (MAND SP), Minor International (MINT TB), and Shiseido Company (4911 JP).

• The dissolution of cross-shareholdings and changing environment in which foreign ownership has risen to 30% have changed the view of activist investors. TSE is one such example of big change.
• It’s convenient that activist investors can use “TSE requested” language that is both easily understood and undeniable by the company when communicating with the portfolio company to improve its issues.
• We must determine whether this is a temporary return to shareholders until the activist investors are removed from the shareholder list, or a shift to value-creating management.

• It was hard to imagine a worse first quarter for Burberry.
• At a time when investors were desperate for some positive news following a torrentially bad fiscal 2024, Burberry’s Q1 trading update emphasised a “luxury market that is proving more challenging than expected” with the weakness highlighted coming into FY25 having “deepened” .
• Retail revenue for the quarter of £458 million came in 22% below the prior year.

• We are initiating coverage of JAKKS Pacific, Inc. (“JAKKS” or the company), a leading designer, producer, marketer, seller and distributor of multi-brand licensed toys and related products, with a Buy rating and a $24 price target, or 7.5X our 2025 EPS projection of $3.20.
• We believe, after a rough start to 2024, driven by weak content-led movie driven results, JAKKS is nearing a stabilization of the business and, with new licensing relationships (The Simpsons and Authentic Brands) and content-led movies (Moana 2, Sonic the Hedgehog 3) coming to the fore, is positioned for upside.
• Further, as of 1Q24, JAKKS is debt free for the first time in recent history, with cash per share of over $3.40 and tangible book value of over $14.75 per share.

• Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.
• Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.
• It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.

• Yifeng is a leading pharmacy chain in China with 13,000 stores nationwide, primarily in East and Southcentral regions
• Revenue is mostly derived from prescription and over-the-counter drugs, with Traditional Chinese Medicine and non-medicine products also contributing
• Despite already being a top pharmacy chain in China, Yifeng still has room to grow and capture more market share in the industry

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.

• 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 inflow continues, albeit smaller. SOE Banks/Energy/Telecoms remain a big net buy. Percentage of volume is large. NORTHBOUND saw finance buying. Possible short-covering ahead of new short-selling restrictions/access.
• AH Premia were up small on average, down small on the liquid pairs. But HSI/HSCEI vs CSI300/500 performance spreads were higher. Third Plenum this week may drive “sentiment.”

• A group of shareholders aims to raise around US$1.3bn via selling around 11% of ASICS Corp (7936 JP).
• For the two large banks, this will be a cleanup of their cross-shareholding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Thai Beverage (THBEV SP) majority-owned SABECO, a leading beer company in Vietnam, may face volume declines if the proposed beer tax hike is implemented.
• The tougher market outlook makes the earlier proposed BeerCo listing unlikely anytime soon.  
• With no meaningful stock catalyst, weak sector outlook and a stretched balance sheet, the stock could slip down after index inclusion related passive stock buying ends.

• Guangzhou Automobile sales volume of new energy vehicle decreased by 38% YoY in June and by 31% YoY in 1H24.
• BYD plans to invest US$1 billion to build a factory in Turkey.
• AliPay announced that foreigners’ consumption amount in China in 1H24 was eight times of last year.

• Zozo continues to post solid gains in sales but a slight dip in new customers has led some to suggest that the online fashion mall is reaching its peak. 
• Meanwhile, The Japanese fashion retail sector has seen improved performance from retail stores at the expense of e-commerce, with stores actually outperforming online last year.
• While further growth may be harder to achieve, Zozo has several strategies in place that should help it reach its target of ¥800 billion.

• Charles & Colvard operates in the lab-created diamond industry and plans to transition to lab-grown diamonds and direct distribution
• The company experienced a challenging second quarter but has a solid foundation and potential for improved financial performance in the future
• Despite current setbacks, Charles & Colvard could present a value investment opportunity for patient investors awaiting a turnaround

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.