Daily Briefs

• Despite the significant offering size, passive fund demand is unlikely to materialize due to non-strategic selling shareholders.
• Company’s number of shares and free float in the main global indices are forecasted to remain the same before and after the offering.
• Upcoming buybacks can lead to a decrease in float shares which can even cause passive fund supply at a subsequent quarterly review.

• On 21 June 2024, Canaan Co. announced a tender offer and taking private of Shinsung Tongsang. Tender offered shares are 31.664 million shares, representing 22.02% of outstanding shares.
• It could be difficult to complete this tender offer at 2,300 won, because there could be many investors that simply refuse to sell their shares at such low valuations.
• On the business side, the company has successfully captured higher market share and enjoyed higher profit margins especially for the Top Ten apparel brand, taking away market share from Uniqlo.

• Around a third of the way though the review period, there could be 4 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the December rebalance.
• The impact on the potential inclusions ranges from 0.6-21 days of ADV while the impact on the potential deletions varies from 2.5-16 days of ADV.
• The potential adds have outperformed the potential deletions over the last few months and there could be more to go with short selling banned.

• Johor Plantations Group (2368120D MK) raised around US$156m in its Malaysia IPO. The IPO consisted of both primary and secondary shares.
• Johor Plantations Group (JPG) is an upstream oil palm plantation firm operating predominantly in Johor, Malaysia.
• We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.

• On 8 July (ahead of 19 July PUSU deadline), Carlsberg and Britvic PLC agreed a 1,315p/share offer, 5% above the prior one (I mentioned that an improved offer could come >1,300p).
• The offer represents a 12.6x EV/fwd EBITDA, above the 10-y 10.6x average, which seems reasonable, although interestingly, there are no irrevocable undertakings from any of the top shareholders.
• The offer price is towards my bull case and Britvic’s shareholders are capturing a good part of the synergies. Spread is 3.98%/5.93% (gross/annualised, assuming settlement by 15 March). Long.

• Matahari Department Store (LPPF IJ) results reflected a positive impact from the timing of Lebaran although the like-for-like comparisons were slightly below management expectations., although SSSG remains very strong YoY. 
• Management highlighted that better inventory controls meant that inventory levels finished 1Q2024 at significantly lower levels versus last year, with effective cost controls resulting in better EBITDA and net margins. 
• The company will slow its new store build-out to focus on improving the productivity of existing stores, with refurbishment of six stores and improving merchandise mix driving growth. 

• Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise US$200m in its upcoming Hong Kong IPO. The bookrunners on the deal are CICC and China Securities.
• Zhou Liu Fu Jewellery (ZLFJ) is a jewelry company in China with a network of offline stores and online sales channels.
• According to F&S, the firm is ranked among the five largest brands in the Chinese jewelry market between 2017 to 2023 in terms of number of stores in China.

• The Walt Disney Company is a diversified worldwide entertainment company. The Company’s segments include Entertainment, Sports and Experiences.
• The Entertainment segment generally encompasses the Company’s non- sports focused global film, television and direct-to-consumer (DTC) video streaming content production and distri- bution activities.
• Its line of business includes Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. 

• “Life is like a cup of coffee, it is best made with love…” I’ve loosely followed Farmer Bros (FARM) for quite some time but a series of events triggered me to revisit the situation.
• Part of my New Year’s resolution was to go cold turkey on my addiction of the highly acidic blend of roasted Robusta and Liberica black coffee one would find all over Singapore, typically consumed sugarless and without milk for the true aficionados – their presence never going unnoticed as every sip leaves an unmistakable yellow taint on the crooked canvas assembled right behind those lips.
• This turkey survived for quite a bit until two weeks ago … I took a short trip to Shanghai to visit some buddies (will be flying to Bangkok in a week – drop me an email if you’d like to grab a drink) and in the spirit of “whatever happens on vacation, stays on vacation” decided to steal a couple cups of freshly brewed black coffee to tide through the day, especially after a number of late drunken nights.

• Valuation should not be the main factor when considering shorting DKNG
• Strong momentum in 2023 is waning, leading to focus on financials and valuation
• Competition intensifying and low margins in sports betting market may pose challenges for DKNG as investors shift focus to financial performance

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.