Consumer: Olam International, Nhk Spring, Hotel Shilla, GameStop and more

In today’s briefing:

Olam Group: Restructuring to Unlock Value

Olam Group set to replace Olam International (OLAM SP) as the listed company entity on 16 March. It consists of Olam Food Ingredients (ofi), Olam Agri and Olam International (OIL).
The complicated restructuring exercise which was announced in January 2020 is driven by the Board’s intent to unlock long-term shareholder value.
Our SoTP valuation is S$2.36 per share, which is a 34% upside to the last trading price of S$1.76 per share (9 March prior to the suspension of the shares).

NHK Spring released an announcement mid-week to the effect that they were selling a golf practice facility they owned. The profit on the sale will exceed 10% of Enterprise Value.
In addition, the company has another 25-30+% of Enterprise Value in shareholdings which return far less than the Mid-Term Management Plan target ROE of 8%.
On an Adjusted EV basis (EV less non-operating financial assets), this stock trades at less than 1.5x EBITDA two years out.

I sorted out those on KOSPI 200 with a weekly short-selling volume exceeding 10% of last week’s total trade volume and a 30-day ADTV of +₩5B.
I further screened those having an increase in the weekly loan balance. As a result, I filtered 23 KOSPI 200 constituents meeting these conditions.
Among the filtered ones, those whose stock price did not drop last week are screened, meaning that the market’s expectations for further share price declines are high for these names.

The past decade has seen the rise of Big Tech emerge as a significant market leader as they continue to play a dominating role in innovation, consumer lives, and the enterprise.
These names (i.e. Apple, Google, Microsoft, etc.) have tremendous economic moats, free cash flow, and have been a “flight to safety”
However, so far in 2022, these names have languished as a fierce rotation into other market sectors like agriculture, energy, and metals have taken over while Big Tech consolidates

Before it’s here, it’s on Smartkarma