In today’s briefing:
- Another BIG SONY (6758) Buyback, But…
- Sony – That Revenue Guidance Tho
- Thai Bev: Holdco Discount Narrows as Thai Bev Prepares to Restart the Beer Unit IPO
- FTSE All-World/All-Cap Index Rebalance Preview: Potential IPO Inclusions in June
- A Pair Trade Between CJ Cheiljedang and CJ Logistics
- ThaiBev BeerCo Pre-IPO – Back for Another Round
- Aristotle Capital Management Large Cap Growth Q1 2022 Commentary
- Aristotle Capital Management Core Equity Q1 2022 Commentary
- Aristotle Capital Management Small/Mid Cap Equity Q1 2022 Commentary
- Mitsubishi Motors – Could Get Squeezy
Another BIG SONY (6758) Buyback, But…
- A release showed up on TDNET last week that Sony Corp (6758 JP) had completed its ¥200bn 25mm share (2.02%) buyback program announced 28 April 2021.
- The details showed they had actually bought back 8.2mm shares spending only ¥97bn, despite the shares trading below T-1 Announcement Date Price for four months straight.
- Today, with earnings, SONY announced a NEW buyback. ¥200bn, 25mm shares, 2.02%. Same as last year.
Sony – That Revenue Guidance Tho
- Sony results were in-line with revenue of ¥9.92trn barely below ¥10trn consensus and OP of ¥1.20trn also just below consensus at ¥1.21trn.
- Guidance was interesting however as Sony guided for revenue of ¥11.4trn and a slight decline in OP.
- We believe that is either extreme conservatism or potentially a sign of very aggressive and interesting investment plans.
Thai Bev: Holdco Discount Narrows as Thai Bev Prepares to Restart the Beer Unit IPO
- In a regulatory filing last Thursday, Thai Beverage (THBEV SP) said that it had restarted its Beer Unit IPO at a much lower valuation than before.
- Based on the current NAV discount of 13%, we think this is already priced-in Thai Bev’s share price.
- Nonetheless, a 13% NAV discount could be too light in our opinion and there could be downside potential to the NAV discount following the completion of the Beer Unit IPO.
FTSE All-World/All-Cap Index Rebalance Preview: Potential IPO Inclusions in June
- We forecast 8 potential inclusions to the All-World Index and 11 potential inclusions to the All-Cap Index at the FTSE June QIR. Most are high probability inclusions.
- LG Energy Solution (373220 KS), Mitratel (MTEL IJ), Adani Wilmar (AWLTD IN), Kakao Pay (377300 KS) and FSN E-Commerce Ventures (Nykaa) (NYKAA IN) are expected to have the largest passive inflows.
- Local institutions have been selling LG Energy Solution (373220 KS) and Kakao Pay (377300 KS) over the last few weeks while retail investors have been buyers.
A Pair Trade Between CJ Cheiljedang and CJ Logistics
- CJ Cheiljedang (097950 KS) reported better than expected earnings in 1Q 2022 and we continue to have a POSITIVE view of this stock.
- Bio business sales increased by 39.3% YoY to 1.08 trillion won and operating profit jumped by 128% YoY 175.8 billion won in 1Q 2022, driven by strong demand for lysine.
- We also like a pair trade between CJ Cheiljedang and CJ Logistics at current prices. We recommend on going long on CJ Cheiljedang and going short on CJ Logistics.
ThaiBev BeerCo Pre-IPO – Back for Another Round
- On 5th May 2022, Thai Beverage announced that BeerCo will resume its Proposed Spin-off Listing. This time the company is aiming to raise less than US$1bn, as per media reports.
- We have looked at various aspects of the deal earlier, as the company had tried to spin-off BeerCo in 2021 as well before finally calling it off in April 2021.
- In this note, we talk about the recent updates for BeerCo.
Aristotle Capital Management Large Cap Growth Q1 2022 Commentary
- For the first quarter of 2022, Aristotle Atlantic’s Large Cap Growth Composite posted a total return of -9.61% gross of fees.
- We have also entered a period of increased geopolitical risks that will add to market volatility, according to Aristotle Atlantic’s Large Cap growth Composite.
Aristotle Capital Management Core Equity Q1 2022 Commentary
- For the first quarter of 2022, Aristotle Atlantic’s Core Equity Composite posted a total return of -6.79% gross of fees.
- The outlook for the U.S.
- large cap equity market for the balance of 2022 will be impacted by the pace and size of tightening by the Federal Reserve.
Aristotle Capital Management Small/Mid Cap Equity Q1 2022 Commentary
- For the first quarter of 2022, the Aristotle Small/Mid Cap Equity Composite generated a total return of -4.38% gross of fees.
- We remain optimistic about the prospects for small/mid cap equities going forward, according to the company.
- The Aristotle Small and Mid Cap Equity composite generated atotal return of 4.
Mitsubishi Motors – Could Get Squeezy
- MMC results beat with revenue at ¥623bn (+4.2% vs. consensus) and OP of ¥31.4bn (+38.4% vs. consensus).
- FY23 guidance was also above consensus with revenue of ¥2,290bn (+1.6% vs. consensus at +% YoY) and OP of ¥90bn (+4.7% vs. consensus).
- We believe OP guidance is somewhat conservative as volume growth and a weak yen should more than offset raw material costs.
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