In today’s briefing:
- Denso Corp Placement – Possible Placement by Toyota to Raise US$4.7bn
- Denso Corp (6902 JP): Potential US$4.6bn Placement & Limited Passive Buying
- Hang Seng Indices (HSI, HSCEI, HS Tech) Recapping the Recaps – A Bit More To Trade
- HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (Dec 2023)
- Asahi Offering: Discount Presents a Good Entry Point As Price Hikes & Tax Reforms Strengthen Asahi
- Asics (7936) | Stepping Ahead with New MTP
- [Week 11] Namaste India 🙏 | Honasa’s Innovation or Innovative Narrative?
- Quiddity Leaderboard F100/250 Dec 23: Final Expectations; Two Trading Days for Announcement
- PDD (PDD US): 3Q23, Grew Dramatically Overseas, Still Upside After Reaching Our Last Target
- Zomato Lock-Up – Last of the Softbank Selldown
Denso Corp Placement – Possible Placement by Toyota to Raise US$4.7bn
- As per Reuters, Toyota Motor (7203 JP) could look to sell up to 10% of Denso Corp (6902 JP) to raise around US$4.7bn before the end of the year.
- Toyota is the company’s largest shareholder and its largest customer.
- In this note, we will talk about the deal dynamics.
Denso Corp (6902 JP): Potential US$4.6bn Placement & Limited Passive Buying
- There could be a US$4.6bn secondary placement in Denso Corp (6902 JP) before year-end as Toyota Motor (7203 JP), Toyota Industries (6201 JP) and Aisin Corp (7259 JP) unwind cross-holdings.
- Denso Corp (6902 JP) was down 4.85% yesterday (and even more intra-day) and the stock could remain under pressure for the next few weeks.
- There will be limited passive buying in conjunction with the secondary offering and active investors will need to buy a lot of stock.
Hang Seng Indices (HSI, HSCEI, HS Tech) Recapping the Recaps – A Bit More To Trade
- The final datapoints for the December Hang Seng Indices rebalances were recorded today, slightly altering the initially expected weights and flows.
- The expected flows have slightly increased since the initial estimates on 15 then 17 November.
- Across all three indices, I see a net total of roughly HK$13.4bn a side to trade.
HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (Dec 2023)
- The December rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituent weights at 8%. This will lead to large flows.
- Li Auto (2015 HK) will have the largest inflows due to the HSI inclusion while Xiaomi (1810 HK) will have the largest outflow due to HSTECH capping.
- There will be passive selling in HSBC Holdings (5 HK) for yet another rebalance due to capping of the stock in the Hang Seng Index (HSI INDEX).
Asahi Offering: Discount Presents a Good Entry Point As Price Hikes & Tax Reforms Strengthen Asahi
- Two weeks ago, Asahi Group Holdings (2502 JP) revealed plans for a secondary offering, aiming to sell 33.48m common shares in international markets.
- In this insight, we delve into the fundamentals of the business, identifying an opportunity if the offering is priced at a decent discount compared to Asahi’s current price.
- We think recent price hikes and ongoing alcohol tax reforms position Asahi to outperform Kirin Holdings (2503 JP) in the next 3-4 years.
Asics (7936) | Stepping Ahead with New MTP
- Asics unveils MTP with focus on financial milestones: 7-10% Sales CAGR to 660 billion yen and Operating profit of 80 billion yen by 2026.
- The biggest risk to the MTP looks to be market share goals in the US. However, we think overall sales and margin targets are achievable.
- The share price is up 80% YTD and stock is no longer cheap. However, plugging in the MTP assumptions into a DCF reveals further 17% upside
[Week 11] Namaste India 🙏 | Honasa’s Innovation or Innovative Narrative?
- We are back with our regular weekly updates after taking an earnings break and a Diwali vacation.
- Ishares Msci India Small-Cap (SMIN US) appears to be where the most market action is currently. We also maintain a long bias on the NIFTY Index (NIFTY INDEX).
- Honasa Consumer (HONASA IN) is the star of the week that is playing an innovative narrative that which street seems to like, but warrants attention.
Quiddity Leaderboard F100/250 Dec 23: Final Expectations; Two Trading Days for Announcement
- The F100 and F250 December 2023 index changes are likely to be announced after the close on Wednesday 29th December 2023.
- In this insight, we take a look at the potential index changes for F100 and F250 based on rankings as of 27th November 2023.
- There could be one change for the F100 index and six separate changes for the F250 index. Some names lurking close to the border can still make it.
PDD (PDD US): 3Q23, Grew Dramatically Overseas, Still Upside After Reaching Our Last Target
- In 3Q23, total revenue surged by 94% YoY, as Temu started operations in nine European countries in August.
- Operating profits increased by 60% YoY in 3Q23, so we believe overseas businesses have made profits.
- The stock price reached our last target, but we believe there is still an upside of 40% for 2024.
Zomato Lock-Up – Last of the Softbank Selldown
- In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
- Leading to a selldown by Softbank Group (9984 JP) in the same month, followed by another selldown in Oct 2023. Softbank will once again be released from its lockup soon.
- In this note, we will talk about the lock-up dynamics and recent updates.
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