In today’s briefing:
- KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out
- Byd (1211): Better Number but Let’s Wait
- Apollo – THL: Scheme Booklet Out, Meeting on 20th April 2022
- LG Energy KOSPI 200 Fast Entry: Passive Impact on March 10
- Coupang Earnings Preview: More Room to Fall
- Indian Social Commerce Firm Nets $45m More in Series E Money
- Japan’s Governance: Articles About Zojirushi Corporation (7965)’s General Meeting of Shareholders
- Las Vegas Sands: S&P Downgrades Debt One Tier Below Investment Grade: Our Outlook Remains Bullish
- Can Do to Double Stores in 5 Years – and Boost Profits Too
- Berjaya Sports Toto (BSTB.KL) – Signs Of Recovery
KOSPI200 Index Rebalance (March): LG Energy IN; Dongwon F&B Out
- KRX has announced the Fast Entry inclusion of LG Energy Solution (373220 KS) in the KOSPI200 Index at the close on 10 March. Dongwon F&B (049770 KS) will be deleted.
- LG Energy Solution (373220 KS)‘s inclusion in the KRX Secondary Battery Index and the BBIG Index should be announced in the next few days. That will add to passive buying.
- Local institutions have been buyers on LG Energy Solution (373220 KS) since listing while retail and foreign investors have been sellers. There is a biggish lock up expiry coming up.
Byd (1211): Better Number but Let’s Wait
- Subsidy removal spooked investors but as proven, January 2022 sales number is even higher than last year.
- The main concern is the expensive valuation among the other Hang Seng Index Constituents rather than anything else.
- In the medium term, and upon the cessation of the Ukraine-Russia tension, BYD (1211 HK)could be an interesting name to have in the portfolio, especially at a lower valuation.
Apollo – THL: Scheme Booklet Out, Meeting on 20th April 2022
- The Scheme Booklet for the Apollo-THL Deal was published yesterday. The Scheme Meeting will be held at 10.00am (AEST) on Wednesday, 20th April 2022.
- The Independent Expert has concluded that the Scheme is fair and reasonable and in the best interests of Apollo Tourism & Leisure Ltd (ATL AU) shareholders.
- The spread has contracted since my previous insight Apollo – THL: Scrip Merger of RV Travel Companies Trading Wide Now. Below is an update on this situation.
LG Energy KOSPI 200 Fast Entry: Passive Impact on March 10
- LG Energy’s KOSPI 200 Fast Entry review period ended this Monday, and KRX immediately announced LG Energy’s Fast Entry to KOSPI 200. Dongwon F&B leaves the Index for LG Energy.
- LG Energy’s passive inflow is ₩202.2B at the close on March 10, 0.66x ADTV. On the other hand, Dongwon F&B’s passive outflow is ₩4.0B, representing 5.84x ADTV.
- LG Energy’s impact size is large enough to affect the price right before the implementation. In particular, since K-New Deal rebalancing occurs after March 10, the effect can be aggravated.
Coupang Earnings Preview: More Room to Fall
- We are outright negative on regional e-commerce names leading into earnings as a small miss could spark a significant sell-off in the current market conditions.
- Even though most regional EC names including Coupang (CPNG US) are down by around 65%, we fear that there’s further downside risk in a rising interest rate environment.
- In the meantime, we expect Coupang to miss 4Q21 revenue when they report on Thursday. In addition, Coupang has the biggest downside potential as it is expensive compared to peers.
Indian Social Commerce Firm Nets $45m More in Series E Money
- DealShare, an India-based social commerce firm, has raised US$45 million as part of its series E round from the Abu Dhabi Investment Authority.
- This is in addition to the US$165 million it raised for the same round last month, when it secured a coveted spot in the unicorn club after its valuation reached US$1.6 billion
- DealShare founder and CEO Vineet Rao told Tech in Asia that the company is preparing to expand its footprint overseas
Japan’s Governance: Articles About Zojirushi Corporation (7965)’s General Meeting of Shareholders
- While Zojirushi proposed a takeover defense plan at this AGM, it again rejected a shareholder proposal. This article will discuss this in conjunction with the Nikkei article.
- Zojirushi’s board practices are generally in place except for the introduction of anti-takeover, but the decision to introduce anti-takeover would be often made independently of other board practice improvements.
- There are some issues with key actions. Especially, unclear growth policy, capital allocation and IR disclosure would have affected the stock performance and the earnings outlook.
Las Vegas Sands: S&P Downgrades Debt One Tier Below Investment Grade: Our Outlook Remains Bullish
- LVS stock twitched slightly on news of debt downgrade which foreshadowed possible further downgrades ahead unless Macau recovery gains more momentum.
- Closing of US$6.2b sale of Las Vegas assets will produce cash proceeds this year of $US$6.2m.
- Trade at writing still does not bake in many positive signs that LVS shares are headed much higher as we revise our PT.
Can Do to Double Stores in 5 Years – and Boost Profits Too
- 100 Yen shops are expanding more rapidly after several tougher years dealing with the twin problems of labour shortages and higher wages – a particular issue for fixed price retailers.
- With more flexible pricing models and high demand for discount retailing, there is optimism again.
- Aeon, now the owner of Can Do, plans to double the size of its new acquisition and spread its merchandise across the Aeon empire.
Berjaya Sports Toto (BSTB.KL) – Signs Of Recovery
- Maintain BUY call with lower TP of MYR2.24 (-2%)
- Earnings and dividends within our expectations
- Recovery not as swift as before but still happening
- Trim long term earnings estimates by only 2%
Before it’s here, it’s on Smartkarma
