In today’s briefing:
- NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely
- HSCEI Index Rebalance Preview (June): Great Wall Motor (2333) Should Replace Hansoh Pharma (3692)
- MSCI Korea May Rebalancing Preview
- Japan Tobacco 2022 High Conviction Update: The Russia Ukraine War Impact Is a Bit Overdone
- Fabindia Pre-IPO – The Positives – Strong Urban Brand
- Monogatari Corporation (3097): Solid Sales, Especially in Japanese BBQ
- Kura Sushi (2695): Solid 1Q Results. Building Competitive Advantage Through Differentiation
- Minor International (MINT.BK) – Strong Fy22 E Turnaround
- Fabindia Pre-IPO – The Negatives – Past Financial Performance Trends Remain Unclear
- Central Plaza Hotel (CENTEL.BK) – Turning Profitable
NIO (9866 HK) Secondary Listing: HSTECH Inclusion in June Likely
- NIO Inc (9866 HK) is expected to list on the HKEX (388 HK) tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.
- We do not expect NIO Inc (9866 HK) to get Fast Entry to the HSCEI INDEX and HSTECH INDEX, though inclusion in the HSTECH could take place in June.
- NIO Inc (9866 HK) is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.
HSCEI Index Rebalance Preview (June): Great Wall Motor (2333) Should Replace Hansoh Pharma (3692)
- Great Wall Motor (2333 HK) could replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance. The review period ends 31 March.
- Bilibili (9626 HK) is a close add while Sunac China Holdings (1918 HK) is a close delete. Stock prices moves over the next 3 weeks will decide on the changes.
- Passive HSCEI Index trackers will need to buy 1.74 days of ADV on Great Wall Motor (2333 HK) and sell over 3 days of ADV on Hansoh Pharmaceutical (3692 HK).
MSCI Korea May Rebalancing Preview
- As for additions, only Kakao Pay and Hyundai Heavy pass the screening. Both now satisfy the minimum listing period requirement and comfortably beat both full and float-adjusted market cap hurdles.
- Lotte Shopping and Meritz Financial Group are filtered among the deletion candidates. Both fail (or closely) to meet the lower buffer of the float-adjusted market cap, estimated at ₩0.91T.
- Hyundai Heavy’ passive impact is expected to be relatively greater than that of Kakao Pay. Lotte Shopping’s impact is estimated to be significantly greater than that of Meritz Financial Group.
Japan Tobacco 2022 High Conviction Update: The Russia Ukraine War Impact Is a Bit Overdone
- Japan Tobacco (2914 JP)’s share price fell 14% from the bottom end of the upward trend channel and underperformed Topix by 6% over the last 15 days.
- Even if Russia yields zero dollars, we think the impact on JT’s valuation could be around 20%.
- With demand for cigarettes expected to go up during these war times, we think the market reaction of this scale is unwarranted.
Fabindia Pre-IPO – The Positives – Strong Urban Brand
- Fabindia is a consumer lifestyle platform with a 62-year legacy focused on authentic, sustainable and Indian traditional lifestyle products. It is looking to raise around US$500m in its India IPO.
- Fabindia offers a diverse portfolio of lifestyle products to its customers across Apparel and Accessories, Home and Lifestyle, Personal Care and Organic Food categories.
- In this note, we will talk about the positive aspects of the deal.
Monogatari Corporation (3097): Solid Sales, Especially in Japanese BBQ
February SSS 102.9% vs. 2021, 88.2% vs. 2019 (pre-pandemic)
Monogatari Corporation (3097, the company) disclosed monthly data for February (on a preliminary basis)
Same-store sales for the Yakiniku division were 103.6% vs. February 2021 (129.9% for January), 69.2% vs. February 2020, and 95.2% vs. February 2019
Kura Sushi (2695): Solid 1Q Results. Building Competitive Advantage Through Differentiation
OP successfully on track with company target despite large-scale promotions
Segment earnings: Japan, US, and Taiwan entering full-scale recovery phase
Large-scale collaboration with Detective Conan in March and April
Minor International (MINT.BK) – Strong Fy22 E Turnaround
- Upgrade to BUY on hotel and restaurant rebounds
- Prominent hotel recovery in Europe with risks
- Positive same-store sales, with no more lockdowns
- Key risks are Covid and rising food costs
Fabindia Pre-IPO – The Negatives – Past Financial Performance Trends Remain Unclear
- Fabindia is a consumer lifestyle platform with a 62-year legacy focused on authentic, sustainable and Indian traditional lifestyle products. It is looking to raise around US$500m in its India IPO.
- Fabindia offers a diverse portfolio of lifestyle products to its customers across Apparel and Accessories, Home and Lifestyle, Personal Care and Organic Food categories.
- In this note, we talk about the not so positive aspects of the deal.
Central Plaza Hotel (CENTEL.BK) – Turning Profitable
- U/G to BUY on expected aggressive expansion
- SSSG+12%, restaurant sales only 6% below FY19
- RevPar to double YoY in FY22E
- Key risks are Ukraine conflict and rising food costs
Before it’s here, it’s on Smartkarma
