In this briefing:
- Sea Ltd: Follow-On Public Offering an Opportunistic Fundraising?
- 7-Eleven in India: Standard Franchise Model Would Require Minor Tweaks in India
1. Sea Ltd: Follow-On Public Offering an Opportunistic Fundraising?
- We evaluate the attractiveness of Sea Ltd’s (SE US) US$1 bn follow-on public offering announced last Fri.
- This offering is a typical opportunistic fundraising as its ADR price has recently surged.
- At assumed deal price of US$21, SE post deal would trade at 4.6x 2019E P/adjusted sales (excl. 1P e-commerce sales), vs. peers average of 5.2x.
- We would recommend investors to go for the deal if it is priced at US$20 or lower.
2. 7-Eleven in India: Standard Franchise Model Would Require Minor Tweaks in India
- 7-Eleven partners up with Future Retail in an effort to enter the growing Indian Market
- Indian E-Commerce giants pose a significant threat to 7-Eleven’s plans
- 7-Eleven’s recent shift focuses more on developing markets.
- Lack of profitability in India could require changes to the standard franchise agreement in order to attract franchisees
On 28th February 2019, Seven & I Holdings (3382 JP), the operator of the world’s largest convenience store chain 7-Eleven, announced that the company has signed a master franchise agreement with Kishore Biyani’s Future Retail, the operator of the Indian large format store chain Big Bazaar, to expand the 7-Eleven convenience stores into India. Future Retail and Seven & I Holdings expect the first 7-Eleven convenience store in India to be opened in Mumbai in 2019.
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