Daily Brief Consumer: Hyundai Home Shopping Network, Best World International, Crizac, Anta Sports Products, Papa John’S Intl, DPC Dash, Arcos Dorados Holdings , Post Holdings, Sprouts Farmers Market, Calavo Growers and more

• Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
• A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
• Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. 

• Best World International (BEST SP) has disclosed an exit offer through selective capital raising and delisting. The offer of S$2.50 is a 42.9% premium to the undisturbed price of S$1.75. 
• The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
• The headcount test is a risk. The offer is light as only 66.7% of retained earnings will be distributed and the consideration will be covered 1.6x by the net cash.

• Crizac is looking to raise US$120m in its upcoming India IPO. The bookrunners on the deal are Equirus and Anand Rathi.
• Crizac is an education platform offering international student recruitment solutions to global institutions of higher education in the United Kingdom, Canada, Republic of Ireland, Australia and New Zealand (ANZ).
• Crizac is one of the largest student recruitment solutions providers from India to the UK with a market share of 13.0%, in terms of the number of students in 2023.

• After a solid FY23, Anta Sports Products (2020 HK)‘s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  
• Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. 
• Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. 

• Papa John’s International, Inc. reported another year of record global system-wide sales for the fourth consecutive year of positive North America comps in 2023.
• The company’s success is attributed to the dedication and focus of its team, franchisees, and the restructuring efforts, especially the foundation improvements to restaurant operations, menu amelioration with novel products, the digital advancements of their operations platforms, and the expansion of the restaurant footprint.
• 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.

• We believe consensus has not fully captured the company’s margin upside for FY24/25, likely due to management’s excessively conservative guidances.
• Our confidence is underpinned by positive SSSG trend, accelerating store expansion and clear trajectory for store margin improvement.
• We expect the company to generate RMB150/320 million adjusted net profit for FY24/25 respectively, compared to RMB30/150 million baked in consensus. Reiterate buy with HK$80 target price (30x FY25 earnings).  

• Arcos Dorados Holdings Inc., also known as “Golden Arches,” recorded a strong performance for the full financial year and fourth quarter of 2023, supported by the company’s 3D’s strategy – Digital, Delivery, and Drive-thru.
• This strategy emphasizes expanding digital sales using mobile apps and self-order kiosks, which have quickly penetrated every market.
• Arcos Dorados also emphasized delivery sales and modernizing its restaurants to improve customer experience.

• Post Holdings began fiscal 2024 with a strong first quarter, with manufacturing performance, pricing and cost management aiding in growth momentum.
• Diverse channel, product, and price point offerings have allowed the company to weather various volume fluctuations.
• Although volume decreases were observed in branded retail businesses, Foodservice remained strong with shifts toward value offerings and positive momentum in their Refrigerated Retail business.

• Sprouts Farmers Market’s 4th Quarter 2023 Earnings demonstrated a decent performance.
• Positives include a 7% sales growth for the year while maintaining a stable margin, as well as a 19% increase in their adjusted diluted earnings per share.
• The company’s focus on specialty positioning in order to provide quality, differentiated, and healthy food products appears to be paying off, as indicated in the results.

• Calavo, a key player in the avocado industry, is currently experiencing a minor turnaround
• The investment thesis is based on “information arbitrage” and potential growth in earnings and share price
• Despite previous short write-ups, the focus now is on Calavo’s near-term turnaround rather than industry issues

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.