In today’s briefing:
- The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group
- Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform
- Shiseido (4911 JP): Brainstorming For Potential Buyers
- Dickson Concepts (113 HK): 38% Discount to NCAV, 8.6% Dividend Yield, Steady FY24
- Raccoon Holdings, Inc. (3031 JP): Full-year FY04/24 flash update
The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group
- Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.
- Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis’s stock low, but Chung Mong-koo’s health complicates timing and strategy.
- Mobis’s trading point depends on Chung Mong-koo’s health. Three scenarios: he’s healthy, critically ill, or deceased. Current rumors’ price impacts are unlikely to subside soon.
Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Fancl Corp (4921 JP) recommended Kirin Holdings (2503 JP)’s tender offer of JPY2,690, a 42.7% premium to the undisturbed price.
- The timing looks opportunistic as Fancl’s shares are down 20% YTD. The offer period is from 17 June to 29 July.
- While the offer is attractive vs peer multiples, it is light vs historical trading ranges. Securing the required acceptance rate could prove challenging as the offer price is light.
Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Kirin Holdings (2503 JP) bought a 33% stake from the founder and several others in August 2019. Five years later, they are coming back for the rest.
- The price here is ¥2,690/share which is a 42.7% premium from yesterday’s close. Kirin paid 20+% more in 2019. Earnings fell, but they paid 37x NTM. This is 32x.
- This is lightish… but… this should get done. Activism would be difficult. There are enough shareholders who should be OK getting out. This should trade tight.
Webtoon Entertainment Pre-IPO – Peer Comparison – Relatively Small in Operating Scale as a Platform
- Webtoon Entertainment (WBTN US) is looking to raise up to US$500m in its US IPO.
- Webtoon Entertainment is a global storytelling platform where a community of creators and users discover, create and share new content.
- In our previous note, we talked about the company’s historical performance. In this note, we undertake a peer comparison.
Shiseido (4911 JP): Brainstorming For Potential Buyers
- Today, according to public news, Kirin Holdings will launch a tender offer for Fancl Corp (4921 JP) at a likely 30% premium.
- The beauty industry is historically ripe with M&A deals. It is not hard to see why, as the global beauty sector trades at a hefty valuation multiple.
- In this insight, we brainstorm for potential buyers of Shiseido Company (4911 JP) and analyze the viability of such.
Dickson Concepts (113 HK): 38% Discount to NCAV, 8.6% Dividend Yield, Steady FY24
- Dickson Concepts Intl (113 HK) reported earnings growth of 39% YoY, led mostly by an increase in interest income on the 9.6 HKD/share of net cash/investments on the balance sheet.
- The company’s net current asset value (NCAV) expanded to 8.2 HKD/share (Vs. FY23: 7.6 HKD/share), and with the stock at 5.2 HKD/share, it trades at a 37% discount to NCAV.
- The dividend was increased to 45 cents ( from FY23:35 cents/share), placing the stock at an attractive dividend yield of 8.6%.
Raccoon Holdings, Inc. (3031 JP): Full-year FY04/24 flash update
- Revenue increased by 9.2% YoY to JPY5.8bn, driven by economic recovery and increased inbound demand.
- Operating profit decreased by 52.5% YoY to JPY567mn due to higher advertising and promotional expenses.
- Financial business revenue rose 14.9% YoY to JPY2.5bn, with a 29.4% YoY decrease in operating profit to JPY371mn.
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