In today’s briefing:
- StubWorld’s: Amorepacific’s Multi-Year Lows
- Quiddity JPX-Nikkei 400 Rebal 2024: End-Oct 2023
- Honasa Consumer IPO – Thoughts on Valuations
- New Oriental Education & Technology: Back From the Dead
- Panasonic (6752) | Panic-Sonic
- Quiddity A/H Premium Tracker (To Oct27): Volatility Off, Spreads Still Volatile. GreatWall Q3!
- Bukalapak (BUKA IJ) – Taking the Track Towards Profitability
- Monthly Chinese Tourism Tracker | Tourism Recovery Derailed By Normal Seasonality | (October 2023)
StubWorld’s: Amorepacific’s Multi-Year Lows
- Both the implied stub for Amorepacific Group (002790 KS) and the simple ratio (Group/Amorepacific Corp (090430 KS)) are around lifetime low levels.
- Preceding my comments on Amorepacific are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Quiddity JPX-Nikkei 400 Rebal 2024: End-Oct 2023
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-October 2023.
Honasa Consumer IPO – Thoughts on Valuations
- Honasa Consumer is looking to raise about US$200m in its upcoming India IPO.
- HC’s product portfolio includes products in the baby care, face care, body care, hair care, color cosmetics and fragrances segments.
- In our previous note, we looked at the company’s past performance. In this note, we talk about the RHP updates and valuations.
New Oriental Education & Technology: Back From the Dead
- MSCI China Funds are starting to engage with New Oriental Education & Technology after a big exodus in 2021 following China’s Tech Crackdown.
- Since the lows of 2022, New Oriental Education has been one of the key beneficiaries of active fund rotation.
- Previous holders such as HSBC, Mirae and BlackRock have bought back in after closing out in 2021, but there is still a long way to go to reach previous highs.
Panasonic (6752) | Panic-Sonic
- Panasonic’s Q2 results showed flat consolidated sales of Y2,090 billion, with a 24% YoY increase in adjusted operating profit.
- FY3/24 outlook was revised down with sales and operating profit reductions across segments, notably in Lifestyle and Energy
- Our concerns include the company’s complex structure, low overall profitability, uncertainties about valuing IRA credits, and challenges stemming from economic conditions, leading to pessimism about Panasonic’s stock price
Quiddity A/H Premium Tracker (To Oct27): Volatility Off, Spreads Still Volatile. GreatWall Q3!
- The New and Better (10 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- Last week the portfolio bounced back, erasing the previous week’s losses. Southbound continues to see net inflows and this week all H/A Pair sectors saw Hs outperform except Energy.
- High-Div SOEs continue to be weak. Banks, Pharma, Industrials, and Utilities spreads continue to be Very Volatile. Quiddity Favourite Great Wall Motor (2333 HK) up 7% after Q3 results Friday.
Bukalapak (BUKA IJ) – Taking the Track Towards Profitability
- Bukalapak (BUKA IJ) 3Q2023 results confirmed that it is on track to achieving EBITDA breakeven in 4Q2023, with strong revenue growth and a significant improvement in its contribution margin.
- The was a slight slowdown in marketplace revenue QoQ due to a high Lebaran base, mainly due to slower gaming. 4Q2023 should see a strong recovery and higher take rates.
- Bukalapak looks to be pressing all the right buttons but more granularity on what is driving higher take rates would be well-received . Valuations look attractive relative to peers.
Monthly Chinese Tourism Tracker | Tourism Recovery Derailed By Normal Seasonality | (October 2023)
- September outbound tourism metrics plummeted, in some cases to levels seen in Q223
- Domestic air travel demand also fell vs August; normal seasonal patterns are dominating
- As recovery fizzles, travel shares languish, and we see few reasons for optimism, near-term
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