Daily Brief Consumer: Honda Motor, Daidoh Ltd, Dollar Industries, Aisin , Samvardhana Motherson Automotive Systems Group BV, Lululemon Athletica, Arcos Dorados Holdings , D’ieteren SA/NV and more

• Just pre-close on 2 July, Reuters carried an article suggesting a ¥500bn secondary offering in Honda Motor (7267 JP) as insurers sold. The stock fell 4% in minutes. 
• Honda semi-confirmed but it took two days to get to the details, now out. The stock climbed in the meantime. 
• At launch, this deal is two-thirds covered by buyback + passive demand but the supply is heavily-weighted to retail. Cheaper than it looks, lots of moving parts. Read the details!

• Small cap Japanese manufacturer and purveyor of apparel Daidoh Ltd (3205 JP) has consistently been a target for value investors. In late 2022, Strategic Capital went over 5%.
• They have bought more, and as of end-March, they declared 24.85% of TSO (28% of voting rights), but they have 33%. They made proposals for the AGM. They won one. 
• Now Murakami-san has bought in, going over 5%. This gets interesting. Together they have 39.4% as of last week, and probably more now. That should get them 50+% next AGM/EGM.

• Honda Motor (7267 JP) has announced a secondary offering of up to 298.9 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY535 billion (US$3.3 million).
• The offering is another sign that the unwinding of cross-shareholdings is catching pace as part of Japan’s corporate governance reforms.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 17 and 22 July (likely 17 July).

• A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP) .
• The possibility of such a selldown was flagged earlier in the week by Reuters. Thus, the deal is well flagged.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Dollar has 15% market share in the Indian hosiery space with 2,000 products
• Strategically expanding the Distribution network by targeting specific areas with Lakshya   
• Integrated value chain from Spinning to stitching to marketing and distribution

• Denso Corp (6902 JP), Toyota Motor (7203 JP) and Toyota Industries (6201 JP) are looking to raise US$1.1bn from selling some of their stakes in Aisin (7259 JP).
• We have covered the background of the deal in our earlier note, Aisin Corp Placement – US$1.1bn Selldown by Toyota and DENSO.
• In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Road King Infrastructure
• Samvardhana Motherson International Ltd
• Vedanta Resources

• Strong candidate for shorting in the short-run, potential to miss revenue consensus by 4-5ppt in Q1 2024
• Recommendation to short LULU US when share price is above USD410, price target of USD300 before next earnings date in May 2024
• Lululemon is a leading brand in women’s indoor training and yoga, overvalued and likely to see a decline in share price

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.

• Arcos Dorados Holdings Inc. recently discussed its financial performance for the first quarter of 2024, highlighting both favorable outcomes and challenges that depict a mixed fiscal environment.
• The company, a major player in the fast-food industry in Latin America and the Caribbean, operates primarily under the McDonald’s brand, holding exclusive rights to own, operate, and grant franchises in 20 countries.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• D’Ieteren Group plans to unlock value through an IPO of its majority-controlled subsidiary, Belron
• Belron is a leader in the global auto glass and repair industry with strong market shares and impressive operating margins
• Appointment of Carlos Brito as CEO signals focus on international expansion and recent investments value Belron at €17.5Bn, offering upside potential for D’Ieteren shareholders

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.