In today’s briefing:
- StubWorld: Astra Trading Cheap. So Is United Tractor
- Alibaba: Freshippo Seeks Funding at a Lowered $6.0bn Valuation, An Indication of Financial Troubles
- Yamazaki Baking (2212) | Price Hikes to Test Consumer Appetite
- Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone’s Annual Big Impact Rebal Trades
- WDFC: Spraying on a Sell Rating, Initiating
- Innova Captab Pre-IPO Tearsheet
StubWorld: Astra Trading Cheap. So Is United Tractor
- Astra International (ASII IJ) is coming up cheap after United Tractors (UNTR IJ) positively responded to its large share buyback announcement. Yet both companies are looking attractive here.
- Preceding my comments on Astra and United Tractor 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%.
Alibaba: Freshippo Seeks Funding at a Lowered $6.0bn Valuation, An Indication of Financial Troubles
- According to Reuters, Alibaba Group (9988 HK)’s supermarket chain Freshippo is seeking to raise around $400-500m from a fresh funding round which values the loss making company at $6.0bn.
- The fact that Alibaba is willing to dilute ownership at a significant discount to its expected valuation is an additional sign that Alibaba could be running into some financial difficulties.
- Having slashed spending budgets of its smaller investments and more down rounds expected in ventures that are considered too big to fail, we anticipate a challenging time ahead.
Yamazaki Baking (2212) | Price Hikes to Test Consumer Appetite
- Strong Q1 results have pushed up the share price offering a good entry point for Shorts
- We think that full year guidance remains a risk given input costs and ability to push through higher prices
- Given the risks, persistently low margins and returns to equity, we remain bearish
Euro Stoxx 50 Quiddity Leaderboard for Sep 22: Eurozone’s Annual Big Impact Rebal Trades
- The EURO STOXX 50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
- Historically, these Rebalance events have had significant volume impact and they generally involve large cap names.
- In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2022.
WDFC: Spraying on a Sell Rating, Initiating
- We are initiating coverage of WD-40 Company (WDFC) with a Sell Rating and $88 target.
- We believe WDFC is prone to an earnings decline stemming from higher input costs and the Company’s first in first out accounting practice.
- People are no longer staying indoors. The squeaking door is not bothering anyone like it used to. WDFC benefited from people staying home during pandemic. Now inventory is rising
Innova Captab Pre-IPO Tearsheet
- Innova Captab (1605221D IN) is looking to raise about US$115m in its upcoming India IPO. The deal will be run by ICICI and JM Financial.
- Innova Captab is an integrated pharmaceutical company in India with a presence across the pharmaceuticals value chain including research and development, manufacturing, drug distribution and marketing and exports.
- Its business includes a contract development and manufacturing organization (CDMO) business providing manufacturing services to Indian pharmaceutical companies, a domestic branded generics business and an international branded generics business.
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