In today’s briefing:
- BYD (1211 HK): Quick Note – Preparing for Price War in 2025
- Mr DIY Indonesia IPO – Prefer Aspirasi Hidup Indonesia (ACES IJ)
- A Review of Our IPO Research in 2024
- JSE Dec 2024 Rebal: OUT to Enter Top 40, NPH to Fall Out / NPN PRX 1H Results: Discounts Catch Bid
- Tesla Shortens Supplier Payment Terms to 90 Days Through Cost-Saving Innovations
- Herbalife Ltd.: – Adapting to the Times; Well Positioned for Long-Term Growth
- BBW: 3Q Review: Strong Q, BBW Worthy of a Premium Multiple; Raising PT to $58
- LifeVantage Corporation: – Successful MindBody GLP-1 System Launch
BYD (1211 HK): Quick Note – Preparing for Price War in 2025
- BYD’ deliveries continued to grow strongly by 68% in November.
- BYD required its suppliers to reduce prices by 10% for 2025.
- We believe BYD will continue the price war in 2025.
Mr DIY Indonesia IPO – Prefer Aspirasi Hidup Indonesia (ACES IJ)
- Home improvements player PT Daya Intiguna Yasa (Mr DIY Indonesia) completed the book building for its IPO this week for its Jakarta listing where it seeks to raise US$296m.
- Mr DIY has seen a rapid rollout of outlets with over 900 stores across Indonesia and SSSG over the last two years of 30%-40% and the company is already profitable.
- Mr DIY has a 25% market share of the home improvements segment focusing on the mass market with affordable products. Prefer Aspirasi Hidup Indonesia as a proxy for this space.
A Review of Our IPO Research in 2024
- This has been a difficult year for the global IPO market including in Korea. In this insight, we review our IPO research in 2024.
- Using the criteria that the Aequitas Research uses (see below), the accuracy rate of our calls on the IPOs this year was 86%.
- There some sizeable IPOs that are expected to be completed in Korea in 2025 including LG CNS, Sono International, K Bank, and Bithumb.
JSE Dec 2024 Rebal: OUT to Enter Top 40, NPH to Fall Out / NPN PRX 1H Results: Discounts Catch Bid
- On Wednesday, after the close, the JSE released index changes scheduled for the December rebalance (Friday, 20 Dec).
- OUT will enter the Top 40, with NPH falling out. AMS will enter the RESI 10 and EXX will fall out.
- Naspers and Prosus released 1H results on Monday. The discounts have narrowed through the last 3 trading days, Naspers and Prosus are up 6% and 3.1%, respectively.
Tesla Shortens Supplier Payment Terms to 90 Days Through Cost-Saving Innovations
- Tesla has shortened its supplier payment cycle to about 90 days in 2024, continuing to outpace rivals in financial efficiency and supplier relations.
- Tesla’s Shanghai factory, where 95% of parts are sourced locally, reflects the company’s deep integration with China’s supply chain.
- The move highlights Tesla’s unique approach to balancing cost-cutting and supplier support in an industry under strain from intense competition, price wars and shifting dynamics between automakers and parts providers.
Herbalife Ltd.: – Adapting to the Times; Well Positioned for Long-Term Growth
- We are initiating coverage of Herbalife Ltd. The company has differentiated itself in its ability to successfully change with the times and capitalize on the shifting market dynamics in a period when many have not.
- Herbalife’s independent distributors’ daily methods of operations (DMOs) have evolved, including the creation of a footprint of Nutrition Clubs that offer daily consumption options to customers, which gives the company’s products a sizable worldwide brick-and-mortar infrastructure in towns and neighborhoods where consumers live and work.
Following the 2016 US Federal Trade Commission (FTC) consent order, Herbalife changed its compensation plan in the US so that distributor commissions were predominantly based on the demonstration of a sale to an end consumer, thereby eliminating the pyramiding risks associated with almost all multi-level marketing (MLM) business models.
BBW: 3Q Review: Strong Q, BBW Worthy of a Premium Multiple; Raising PT to $58
- We are reiterating our Buy rating, raising our price target to $58 (from $41) and increasing our FY25 projections after Build-a-Bear reported a highly impressive 3Q, remained conservative in their guidance, continued to aggressively return capital to shareholders and raised expectations for franchised and commercial store unit expansion.
- We believe Build-A-Bear management continues to leverage their experiential offerings to drive global growth and position the company to capture even more upside via new products and categories.
- Given our further confidence in the potential for margin and revenue expansion, we believe BBW is more than worthy of a premium multiple, and are raising our price target to $58 (from $41), or 8.6X our new FY25 EBITDA projection.
LifeVantage Corporation: – Successful MindBody GLP-1 System Launch
- LifeVantage’s new MindBody GLP-1 System for weight loss is built upon the science that the company is predicated on, nutrigenomics and activating the body’s natural processes.
- The products, which have been in development for well over a year, activate the L-cells in the body that are responsible for the production of the GLP-1 hormone.
- In July, LifeVantage received results from in vitro testing it had done that were encouraging.
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