In today’s briefing:
- Emperador (EMI SP) Secondary Listing: Still a Borderline STI Inclusion, But Could Be a Double Up
- Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well
- Tesla Q2 Results Beat, But Earnings Call Reveals Many Risks
- Sanrio – Hello Kitty and Kuromi Characters to Expand in China But Valuations Remain Lofty
- Cocoaland (COLA MK): Explanatory Statement Out. 18th August Court Meeting
- Sanrio: The Market Is a Bit Too Excited About The Licensing Agreement With Alifish
- Alphyn Capital Management Letter To Investors Q2 2022
- Mayar Capital Q1 2022 Letter To Partners
- Are Didi’s Regulatory Troubles Finally Over with a US$1.2bn Fine?
- PT Metrodata Electronics (MTDL IJ) – Rising with the Digital Tide
Emperador (EMI SP) Secondary Listing: Still a Borderline STI Inclusion, But Could Be a Double Up
- Emperador (EMI SP) started trading on the SGX (SGX SP) on 14 July and so far meets all criteria to be included to the FTSE Straits Times Index (STI INDEX).
- However, it is still a borderline inclusion on free float, market cap and liquidity and will need to pass all three criteria to be added to the index in September.
- If added to the STI, the inclusion will take place on the same day as the potential inclusion of Emperador (EMP PM) in the FTSE All-World Index.
Xtep International Placement – Parent Trimming at ATHs, Last Deal Didn’t Do Well
- Group Success Investments is looking to raise up to US$133m by trimming its holdings in Xtep International (1368 HK).
- We can’t say that the deal is expected and short interest on the stock hasn’t been creeping up as well.
- While the deal won’t be a large one, representing just 5.7 days of three month ADV, the firm’s last deal hasn’t done well.
Tesla Q2 Results Beat, But Earnings Call Reveals Many Risks
- Tesla beat both our estimates and the Street’s by a wide margin, but the earnings call had some cautiousness regarding order backlogs, production ramps & 4680 cells.
- Tesla sold 75% of their Bitcoin holdings at a gain in Q2, which largely accounts for the earnings beat. It is also a sign of larger cash needs than expected.
- The stock was only +1.5% after hours and it was noteworthy that the biggest Tesla bull on the Street said this huge beat wasn’t a “step change” to consensus.
Sanrio – Hello Kitty and Kuromi Characters to Expand in China But Valuations Remain Lofty
- On 30 June 2022, Sanrio reached a five year licensing deal with Alifish, which will cover Sanrio’s cast of popular characters including Hello Kitty and Kuromi in China.
- In July 2020, Shintaro Tsuji (founder of the company) handed over control of Sanrio to his 31 year old (as of 2020) grandson Tomokuni Tsuji.
- Despite the longevity of Hello Kitty as well as the recent partnership with Alifish (Alibaba’s subsidiary) to expand its business in China, we remain concerned with Sanrio’s lofty valuation multiples.
Cocoaland (COLA MK): Explanatory Statement Out. 18th August Court Meeting
- On 3rd June, Fraser & Neave (FNH MK) announced it sought to take Cocoaland (COLA MK) private by way of a Scheme at RM1.50/share, a 26.1% premium to last close.
- Board support was received on the 15 June. The Explanatory Statement is now out with a Court Meeting to vote on the Scheme to be held on the 18th August.
- Management-Backed Leverage Success, the largest shareholder with 40.65%, has given an irrevocable to vote for the Scheme. This is done with payment late-October. The IFA says fair and reasonable.
Sanrio: The Market Is a Bit Too Excited About The Licensing Agreement With Alifish
- Sanrio (8136 JP) , the company behind Hello Kitty, has bounced 12% since striking a deal with Alibaba’s IP licensing platform Alifish to produce and sell merchandise of 26 characters.
- This seems like a way to combat copyright infringements. However, we are sceptical that this agreement could stop cheap counterfeits from entering the market.
- Sanrio badly needs a revival. However, history is not on the company’s side as they have been trying to revive the business over the last 20 years.
Alphyn Capital Management Letter To Investors Q2 2022
- Alphyn Capital Management LLC (“ACML”) is a registered investment advisor in New York. We help clients invest in high quality public companies to both preserve and grow their wealth over the long-term.
- The Master Account, in which I am personally invested alongside SMA clients, returned -14.7% net in Q2 2022, as reported by our fund administrator.
- With the threat of increasing rates, investors have renewed their focus on profits.
- I try not to take a position on a discrete event, such as interest rates or quarterly earnings, as the odds of getting these right are too low, and the costs of getting these wrong are too high.
Mayar Capital Q1 2022 Letter To Partners
- Mayar Capital provides investment management services to institutions, family offices, and high net-worth individuals.
- For the three months ending March 31, 2021, Mayar Fund (Class A) was down 6.6% net of all expenses and fees.
- Several of our SMA clients have chosen to switch their investment to the Fund, so we expect Fund assets to increase to approximately $170 million once the transfer is complete.
Are Didi’s Regulatory Troubles Finally Over with a US$1.2bn Fine?
- The CAC of China said on Thursday that it has fined the country’s ride-hailing giant DiDi Global (DIDI US) with RMB8.03bn (US$1.2bn) for violating data protection rules since 2015.
- According to their findings, Didi had been illegally collecting its users’ information which has been used in a manner which had endangered national security.
- In addition to the above fine on the company, CAC also has imposed two fines of RMb1m each on Didi’s Chief Executive Cheng Wei and President Jean Liu.
PT Metrodata Electronics (MTDL IJ) – Rising with the Digital Tide
- PT Metrodata Electronics remains one of the key enablers for the digital economy and overall digitalisation of corporate Indonesia through both providing hardware, software, solutions, and consulting services.
- The key driver for its ICT distribution comes from PCs, laptops, smartphones, and gaming whilst its solutions and consulting business is driven increasingly by the formation of digital banks.
- PT Metrodata Electronics is benefitting from increasing mobility, which has started to boost its higher margin solutions and consulting business. Valuations are attractive and it’s in a net cash position.
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