Daily Brief Consumer: Fancl Corp, Webtoon Entertainment, SHEIN, Hyundai Motor India , Kagome Co Ltd, Alibaba Group Holding , BYD, Johor Plantations Group, Sun Corp, Volkswagen (Pref) and more

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Fancl Corp (4921 JP), Asia Cement China (743 HK), Ansarada Group Ltd (AND AU). 
• Lowest spreads: Tatsuta Electric Wire & Cable (5809 JP), Mma Offshore (MRM AU), Great Eastern Holdings (GE SP), Alumina Ltd (AWC AU), Nagatanien Holdings (2899 JP).

• Webtoon Entertainment (WBTN US), a global storytelling platform, seeks to raise up to US$500 million through a Nasdaq IPO.
• In Webtoon Entertainment IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on declining organic revenue, declining Korean paying ratio, a peaking Japan growth driver, optimistic market sizing, and unsustainable low marketing spending.

• For first time since 2022, carriers’ cargo revenue, yield, load factor all rising
• Asia outbound, US inbound air cargo tons both improving in early 2024
• SHEIN, Temu could account for 40%+ of US inbound air tons from CH, HK, TW

• Hyundai Motor India’s proposed IPO is an offer for sale by its parent, Hyundai Motor Company, Korea, and reported to raise USD3 billion, potentially making it India’s largest IPO ever.  
• Hyundai Motor India’s sales growth has been driven by strong domestic and export sales, both in volume and unit realisation.
• With SUVs now making up 62% of Hyundai Motor India’s domestic volumes, up from 45% in FY2021, the shift towards premium models has boosted profit margins.

• Kagome Co Ltd (2811 JP) aims to raise around US$140m to repay debt used to fund the acquisition of Ingomar in Jan 2024.
• At the time of the acquisition, the company has stated its intention to part finance the acquisition via issuance of treasury shares
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, we continued to look at Shift Up (462870 KS),  Guzman Y Gomez and Webtoon Entertainment (WBTN US), along with Mao Geping Cosmetics. 
• On the placement front, there were quite a few deals in India, while Atour Lifestyle Holdings (ATAT US) was the major Asia linked offerings.

• European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.
• Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.
• Ant Group will pay RMB1 billion to sponsor content creators on AliPay.

• Johor Plantations Group (2368120D MK) is looking to raise US$156m in its Malaysia IPO. The IPO will consist of both primary and secondary shares.
• Johor Plantations Group (JPG) is an upstream oil palm plantation firm operating predominantly in Johor, Malaysia.
• In this note, we look at the updates since, and share our thoughts on valuation.

• Sun Corporation is trading at 40% of its net asset value and has valuable SaaS business with Cellebrite
• Activist investor involvement may unlock trapped value in the company
• Cellebrite is a top digital forensics platform serving law enforcement agencies, making Sun Corp a promising investment choice in the Japanese market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Since mid-May, share-price spreads have not shown a clear trend across our European liquid universe of ordinary and preferred shares (9 have tightened, 7 widened, 1 remained at same level).
• Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols, Media-for-Europe, Sixt, Volkswagen.
• Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.