In today’s briefing:
- Piolax (5988 JP): Murakami Becomes a Substantial Shareholder
- P N Gadgil Jewellers Pre-IPO – Strong Revenue Growth but Margin Worry Persists
- Floor & Decor Holdings Inc.: A Bear’s Perspective! – Major Drivers
- Midea A/H Listing – Getting Closer to the US$3bn+ Raising, Has a Narrow Window
- Melco Resorts – Earnings Flash – H1 FY 2024 Results – Lucror Analytics
- Fu Shou Yuan (1448.HK) – Negative Growth in 24H1 Seems Inevitable
- Qb Net Holdings (6571 JP): Full-year FY06/24 flash update
- Starbucks Gambles on New CEO: Will Niccol Turn the Tide or Spill the Beans?
- Piala (7044 JP): 1H FY12/24 flash update
- Morning Views Asia: Samvardhana Motherson International Ltd, SK Hynix, Vedanta Resources
Piolax (5988 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entities, City Index Eleventh and City Index Third, reported a 5.05% position in Piolax Inc (5988 JP). The purchases were from 11 June to 6 August over 60 days.
- Murakami’s average buy-in price over the last 60 days was JPY2,286.61 per share, a 0.7% discount to the last close price.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Piolax is cash-rich with a P/B less than 1x.
P N Gadgil Jewellers Pre-IPO – Strong Revenue Growth but Margin Worry Persists
- P N Gadgil Jewellers (1742652D IN) looking to raise up to US$132m in its upcoming India IPO.
- P N Gadgil Jewellers (PNGJ) is an Indian organized jewellery player. Its product offerings include traditional as well as modern and functional jewellery designs, in gold, diamond, silver and platinum.
- In this note, we look at the company’s historical performance.
Floor & Decor Holdings Inc.: A Bear’s Perspective! – Major Drivers
- Floor & Decor Holdings, Inc. navigated the fiscal second quarter of 2024 with outcomes that reflected the broader economic challenges impacting the retail and real estate sectors.
- In the quarter under review, the company reported a dip in both total sales and comparable store sales which fell slightly short of expectations.
- This mirrored the continuing pressures from taut monetary policies adversely affecting housing market activities and discretionary spending on major projects.
Midea A/H Listing – Getting Closer to the US$3bn+ Raising, Has a Narrow Window
- Midea Group Co Ltd A (000333 CH) one of the world’s largest home appliance producers, aims to raise up to US$3bn in its H-share listing.
- Midea Group is one of the world’s largest home appliance manufacturing companies with a presence in over 200 countries. Its A-shares have been listed since 2013.
- We have covered the company and deal background in our previous notes. In this note, we talk about the updates since then.
Melco Resorts – Earnings Flash – H1 FY 2024 Results – Lucror Analytics
Melco Resorts’ (MLCO) Q2/24 results were soft, but in line with expectations. The company’s earnings improved sequentially in Q2, though the pace of its earnings recovery (relative to pre-pandemic levels) and debt reduction have continued to lag peers.
During H1/24, MLCO’s net gross debt was down by just 1% from FYE 2023. Hence, the company’s leverage remained weaker than peers, with Net Debt/LTM Adjusted Property EBITDA of 5.1x (vs. 3.9x for Wynn Macau, 2.5x for Sands China and an estimated 2.1x for MGM China).
Going forward, we expect MLCO to continue generating small positive FCF and deleverage gradually, with the extent of its FCF generation likely tempered by ongoing share repurchases.
Fu Shou Yuan (1448.HK) – Negative Growth in 24H1 Seems Inevitable
- According to the management, the performance of 24H1 should be better than that of 21H1, but Fu Shou Yuan’s performance in 2024 full year may still fall short of expectations.
- In the future, the development strategy of Fu Shou Yuan would rely more on endogenous growth. Without aggressive M&A, long-term revenue growth rate could fall to single digit.
- Special dividends will continue in the future. However, one major risk for Fu Shou Yuan is policy risk. The bottom line is the demand for the funeral industry always exists.
Qb Net Holdings (6571 JP): Full-year FY06/24 flash update
- Full-year FY06/24 revenue increased 8.8% YoY to JPY24.8bn, driven by higher domestic revenue, despite a 1.1% YoY decline in operating profit.
- FY06/25 earnings forecast projects revenue of JPY25.7bn (+3.8% YoY) and operating profit of JPY1.9bn (-10.2% YoY), prioritizing salon expansion.
- The company opened 20 new salons and closed 30, resulting in a net decrease of 10 salons to 691.
Starbucks Gambles on New CEO: Will Niccol Turn the Tide or Spill the Beans?
- Starbucks, the global coffee giant, has taken a bold step by appointing Brian Niccol, the former CEO of Chipotle, as its new leader.
- This move follows the sudden departure of Laxman Narasimhan, whose tenure saw a significant drop in Starbucks’ share value, raising questions about the company’s future direction.
- Niccol, credited with turning around Chipotle after its foodborne illness crisis, brings a reputation for innovation and effective leadership.
Piala (7044 JP): 1H FY12/24 flash update
- Revenue increased 20.5% YoY to JPY5.9bn due to demand recovery and business expansion into different industries.
- Operating loss widened to JPY175mn, with a recurring loss of JPY154mn and net loss of JPY186mn in 1H FY12/23.
- Gross profit margin decreased YoY, and continued investment in human resources impacted profitability in the Marketing DX business.
Morning Views Asia: Samvardhana Motherson International Ltd, SK Hynix, Vedanta Resources
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.
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