In today’s briefing:
- Japan – Increase in Shorts on Some Interesting* Stocks
- TSI Holdings (3608) – Yet Another Big Buyback; Still Good, Still Cheap, Now W/ Engagement Investors
- Light & Wonder CDIs Replace United Malts in ASX200 – Be Careful Is All I Can Say
- Ramayana Lestari Sentosa (RALS IJ) -A Challenging Transformation Process
- Sa Sa Intl (178 HK): Revival Well on Track
- Aeon Keeps Working After High Profit Growth
Japan – Increase in Shorts on Some Interesting* Stocks
- CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, GMO Payment Gateway, Kurita Water Industries and Open House have all underperformed the Nikkei 225 over the recent past.
- The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
- Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.
TSI Holdings (3608) – Yet Another Big Buyback; Still Good, Still Cheap, Now W/ Engagement Investors
- In April 2022, I wrote about Tsi Holdings (3608 JP) saying in the first three bullet points it could double in two years. It doubled in one.
- They bought back shares held by JDB in April 2022, then they launched another buyback program in January 2023, and completed it last month.
- Now they have launched another to buy back 8.46% with a ToSTNeT-3 for half on Monday AM. The rest is expected on market through end-March 2024.
Light & Wonder CDIs Replace United Malts in ASX200 – Be Careful Is All I Can Say
- Post-Close Friday it was announced that Light & Wonder (LNW AU) Chess Depositary Interests would replace United Malt Group Ltd (UMG AU) at the close on 17 October.
- This was announced before US markets opened. Light & Wonder (LNW US) shares popped 5.65%, closing 5.8% through the Aussie line.
- This is a possibly deceptive index add. I’d be quite careful.
Ramayana Lestari Sentosa (RALS IJ) -A Challenging Transformation Process
- Iconic Indonesian mass-market department store retailer Ramayana Lestari Sentosa (RALS IJ) has struggled with sluggish growth this year, especially over Lebaran but management remains confident in some recovery in 2H2023.
- The company embarked on transformation pre-pandemic but COVID put a brake on this change and forced a number of stores to close and resurrection has begun again but slowly.
- Ramayana is taking a conservative approach this year, opting not to expand its store network as anticipates weakened purchasing power but pre-election spending could provide a boost. Valuations are attractive.
Sa Sa Intl (178 HK): Revival Well on Track
- Market expectation for FY23/24 earnings of Sa Sa International Hldgs (178 HK) is overly conservative. It achieved HK$110-125m of profit in 1H, and 2H is the normal peak season.
- Offline sales in 2Q23/24 recovered to 47.2% of the 2019 level and the rebound in mainland tourist arrivals should boost sales over the next 12 months.
- Lower rent costs should allow for higher operating leverage as revenue revives. Its gross margin for 1H23/24 has further expanded and we think this trend can be sustained.
Aeon Keeps Working After High Profit Growth
- As outlined in previous reports, Aeon has been working hard to streamline its vast retail empire but also rethinking the fundamentals of retailing for each major format it operates.
- The results are now coming through with a big increase in operating profits in 1H2023, up 23% on last year.
- There is real momentum now, and the new online supermarket business is central to its ambitions to create the first true national FMCG business.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
