In today’s briefing:
- Japan Tobacco 2022 High Conviction Update: Time to Double Down
- Sony – New PlayStation Plus Plans Illustrate Overwhelming Superiority Vs. XBox
- Crown Resorts: Scheme Booklet Lodged. Shareholder Meeting On 29 April
- MSCI Korea Index Review: Kakao Pay Inclusion Possibilities
- Toyota – Feb Production Numbers Suggest The Corner Has Been Turned
- Notice How Tesla Behaves So Much Better For China Than The US?
- Ferretti IPO Trading: Weak Demand and High Share Concentration
- Onward: Moving to Showroom Stores and Click & Collect by 2024
- Poplar Launches Unmanned Stores but Independence Still Under Threat
- V3 Brands Asia Pre-IPO – The Positives – Margins and Revenue Have Grown
Japan Tobacco 2022 High Conviction Update: Time to Double Down
- It seems investors are starting to move past the fears of Japan Tobacco’s exposure to Russia and Ukraine with shares rising 6% following a steep decline alongside Russia’s Ukraine invasion.
- Meanwhile, we expect the company’s OP to continue trending upwards with the weakening yen helping the International Tobacco segment and price hikes benefiting the Domestic business.
- If OP reaches the 2014 level, we think Japan Tobacco (2914 JP) shares could go up around 90% to ¥4,000 per share over the next 12 months.
Sony – New PlayStation Plus Plans Illustrate Overwhelming Superiority Vs. XBox
- Yesterday Sony officially announced the new structure for its popular PlayStation Plus service with three tiers including some streaming options.
- The details had been mostly leaked already and there were no major surprises but pricing looked extremely reasonable.
- Below we compare the plans against Xbox Game Pass and explain why this demonstrates a far better understanding of the industry on Sony’s part.
Crown Resorts: Scheme Booklet Lodged. Shareholder Meeting On 29 April
- Crown Resorts (CWN AU)‘s Scheme Booklet is now out. The Scheme Meeting will be held on the 29 April with possible implementation on the 12 May.
- The Independent Expert has concluded Blackstone’s Offer is fair and reasonable and in the best interest of Crown shareholders.
- This transaction is a done deal, and is trading accordingly.
MSCI Korea Index Review: Kakao Pay Inclusion Possibilities
- The minimum float-adjusted market cap of non-constituents such as Kakao Pay should be 1.8x of the cutoff float market cap if the FIF is 0.15 or less.
- Kakao Pay has to rise by 5.92% by the Price Cutoff Date for a 12% float. So, the key is whether MSCI will classify Alipay’s entire stake as non-float.
- Assuming a 40% float, Kakao Pay will face a passive inflow of ₩576B or 3.84M shares, which are close to 17.4x the current ADTV.
Toyota – Feb Production Numbers Suggest The Corner Has Been Turned
- Toyota announced record overseas production in February putting up a data point to suggest supply chain issues are genuinely easing.
- March is likely to prove more challenging due to some production stoppages but the trend looks clear.
- That it comes at a time when the yen is weak and oil prices encourage hybrid demand is an additional boon for Toyota.
Notice How Tesla Behaves So Much Better For China Than The US?
- Tesla’s Shanghai factory is shut down again this week as China fights its worst Covid wave of the pandemic.
- This shutdown marks the second time this month, the critical final month in a struggling quarter, that Tesla Shanghai has been ordered to suspend operations.
- So where are CEO Elon Musk’s expletive-laced rants and mean tweets about government tyranny like he hurled at US authorities when the Fremont plant was similarly closed in 2020?
Ferretti IPO Trading: Weak Demand and High Share Concentration
- Ferretti raised HKD 1,771million (USD 226m) from its global offering and will list on the Hong Kong Stock Exchange on Thursday, Mar 31st.
- In our previous note, we looked at the company’s key product segments, operating metrics, financials, and industry. We also compared the company with a close peer.
- In this note, we provide an update before trading debut.
Onward: Moving to Showroom Stores and Click & Collect by 2024
- Onward is proving adept at moving sales online even as its turnover drops dramatically as it restructures and slashes old stores – some 1,700 stores in two years.
- It now wants to integrate the remaining stores better with online and targets 50% of sales from e-commerce within three years.
- This won’t be enough to offset lost sales at department stores but should mean improving returns for long-term investors.
Poplar Launches Unmanned Stores but Independence Still Under Threat
- Poplar is one of the few remaining small CVS chains in Japan and is struggling.
- It is now trying a new format of mini stores to take merchandise to the customer.
- This may not be enough and it will likely cede more of its stores to Lawson.
V3 Brands Asia Pre-IPO – The Positives – Margins and Revenue Have Grown
- V3 Brands Asia (V3 HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. It was previously listed on the SGX between 2000-2016.
- V3 Brands Asia is a lifestyle and wellness firm, it is most known for its flagship massage chairs which are sold under the OSIM brand.
- It has also recorded a bounce back post-COVID as average revenue per store surged. Margins have expanded as well owing to operating leverage and the firm’s partnership with Daito-OSIM.
Before it’s here, it’s on Smartkarma
