In today’s briefing:
- Tassal Group (TGR AU): Cooke Scales Up
- Miniso Hong Kong Listing: Still Too Cheap
- An Early Look at Potential Deletions and Additions to KOSPI200
- Skylark Holdings (3197): Solid Guest Count Recovery Due to Promotions
- Teniralc/Cary Group: Agreed Opportunistic Cash Offer
- Readboy Education IPO: Struggling Amidst COVID and Supply Shortages
Tassal Group (TGR AU): Cooke Scales Up
- Back on the 28 June, Tasmanian salmon producer Tassal (TGR AU) rejected Cooke Inc’s $4.85/share offer – its third proposal – and a 42.2% premium to the undisturbed price.
- At the time, Cooke had amassed a 5.4% position. They have now increased that stake to 7.599%, paying up to A$4.85/share.
- A material shareholding and FIRB already in the bag – Cooke is playing for keeps. But it probably needs to bump the terms to get this transaction over the line.
Miniso Hong Kong Listing: Still Too Cheap
- The offer period for Miniso (MNSO US)’s HK listing began on 30th June at a maximum offer-price of HK$22.10 per-share, which translates to a 42% premium to its ADSs .
- With store-level performance expected to reach the pre-COVID level , alongside an aggressive plan to increase the store count by 60%, we predict more than 100% upside to FY24 consensus.
- Our estimates put Miniso on 4.3x FY24 OP, which seems genuinely cheap compared to most of the GMS stocks in New York and Hong Kong.
An Early Look at Potential Deletions and Additions to KOSPI200
- In this insight, we provide an early look at the potential deletions and additions to KOSPI200 rebalance.
- We provide the top 10 potential deletions including Cosmax Inc (192820 KS), Hyundai Home Shopping Network (057050 KS), and Samyang Holdings (000070 KS) to KOSPI200 (announcement in November 2022).
- Our trading strategy for the KOSPI200 index would be to go short on a basket of the potential deletions and to go long on a basket of the potential additions.
Skylark Holdings (3197): Solid Guest Count Recovery Due to Promotions
- With the recovery of foot traffic, the company stepped up its promotional activities since late May, which had a positive effect on the guest count in June
- In June, the company opened no new store. The number of stores at the end of June was 3,085 (-5 MoM)
- According to the June 26 Nikkei, Skylark Holdings plans to 1) raise menu prices at its mainstay ” Gusto” restaurants at the end of July, and 2) abolish uniform pricing nationwide and limit price hikes for some products at suburban restaurants
Teniralc/Cary Group: Agreed Opportunistic Cash Offer
- CVC and Nordic Capital announced an agreed takeover offer for the 70% they don’t own in Cary Group. The SEK 65/share offer price represents 14.8x EV/Fwd EBITDA and 25.6x Fwd P/E.
- The shares had dropped 60% YTD. Cary’s tenure in the stock market will be short-lived (listed 09/2021). It’s a difficult target for activists, the top ten shareholders own c.84%.
- It’s difficult to reject a 60% premium; I believe folks should be happy to cut losses. Gross spread is 1.85% (12.7% estimated annual return assuming settlement on 30 August). Long.
Readboy Education IPO: Struggling Amidst COVID and Supply Shortages
- Readboy Education has the second largest market share in China’s smart learning device market. The company has filed for an IPO on the HKEx to raise around HK$ 520m.
- The company grew its revenues strongly over the past three years but shipments have been declining in 2021 amidst the COVID-19 resurgence and subsequent lockdowns.
- Margins have been declining due to raw material shortages and even though Readboy claims to have taken measures to deal with the shortages, we are yet to see its effectiveness.
Before it’s here, it’s on Smartkarma
