In today’s briefing:
- Hyundai Motor India Pre-IPO – Peer Comparison – Doesn’t Stand Out
- Koito Mfg (7276) Bounces The Same as It Bounced in March On the Same News – An Echo? Meh Again.
- China Autos Landscape Has Permanently Changed, Foreign Brands Have Lost Their Clout
- Samson (531 HK): MBO Via A Scheme
- Isetan-Mitsukoshi Bets on Flagships and Real Estate
- MercadoLibre: A Credit Look into the Latin American Rising Star
- Women’s Empowerment in Japan Will Still Take a Considerable Amount of Time
- ADEA: License to Preview
- GameStop: The Sinking Ship with a New Paint Job – Should You Board?
- D.R. Horton Inc.: A Tale Of Dealing With Interest Rate Fluctuations and Market Adaptability! – Major Drivers
Hyundai Motor India Pre-IPO – Peer Comparison – Doesn’t Stand Out
- Hyundai Motor (005380 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
- HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
- In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison.
Koito Mfg (7276) Bounces The Same as It Bounced in March On the Same News – An Echo? Meh Again.
- An interview in the Nikkei of Koito Manufacturing (7276 JP) CFO Takahito OTAKE offered the comment that Koito Mfg expected a shareholder return of 130% a year through March 2029.
- The stock popped 19% after lunch on that comment, then fell back to end up 5.0%.
- This is the same pop as we saw end-March. Then it was +24.6% and it stayed up the next day. Same reason for the pop. This was an echo.
China Autos Landscape Has Permanently Changed, Foreign Brands Have Lost Their Clout
- Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing
- The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands
- Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term.
Samson (531 HK): MBO Via A Scheme
- Furniture trader Samson Holding (531 HK) has announced a Scheme from Shan Huei Kuo, Samson’s Chairman.
- The Cancellation price is $0.48, a 50% to last close. The premium is more pronounced if going back a month. The price is final.
- This looks done. But Samson is an illiquid micro cap.
Isetan-Mitsukoshi Bets on Flagships and Real Estate
- Isetan Shinjuku expects to post sales in excess of ¥400 billion this year, a record for a single retail store, although most of the growth is from inbound tourists.
- But Isetan-Mitsukoshi is working to ensure longer term stability through more sophisticated databases and personalised marketing.
- At the same time, it will make better use of real estate assets, investing ¥500 billion around Isetan Shinjuku alone.
MercadoLibre: A Credit Look into the Latin American Rising Star
- We are initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds. We are optimistic about MELI’s overall financial and business risks.
- For EM investors, we prefer MELI 2.375% 2026 notes with a 10-30 bps compression potential. These bonds are trading wide compared to the Brazilian Sovereign and the benchmarks.
- For US investors, MELI’s risk-reward symmetry is especially compelling, given that 2031 bonds are trading wide by around 75 bps compared to global e-commerce and fintech peers.
Women’s Empowerment in Japan Will Still Take a Considerable Amount of Time
- Since Japan’s gender gap index ranks 118th out of 146 countries, stagnating in the lower group, it will take a considerable amount of time to resolve the issue.
- A shortcut to the improvement of women’s status is to greatly improve the gender ratio in the legislature in order to change the current framework for improving women’s status.
- Behind the lagging 103rd place in the ratio of female managers is the lack of progress in higher education for women.
ADEA: License to Preview
- •It has been the summer of renewals at ADEA leading to a directionless stock since ADEA reported Q1 results. ADEA has announced several renewals, LBTYA, since the beginning of May
- We are now more than two weeks into the third quarter lending credibility to why the shares have yet to react positively
- We were already forecasting the probability of a new license occurring later in the year and are keeping our earnings estimates unchanged heading into ADEA reporting second quarter results.
GameStop: The Sinking Ship with a New Paint Job – Should You Board?
- GameStop, once the epicenter of the retail investor revolution led by the enigmatic Roaring Kitty (Keith Gill), has seen a dramatic resurgence in attention.
- Gill, who became famous for his substantial stake in GameStop during the 2021 meme stock frenzy, recently reappeared with jaw-dropping claims of substantial holdings in GameStop and Chewy.
- However, the recent results and financial disclosures reveal a company that, despite superficial improvements, is fundamentally unstable.
D.R. Horton Inc.: A Tale Of Dealing With Interest Rate Fluctuations and Market Adaptability! – Major Drivers
- D.R. Horton, America’s Builder, reported financial outcomes for the second quarter of fiscal 2024 indicating a positive trajectory in both revenue and profit generation.
- Despite challenges related to elevated inflation and mortgage interest rates, the company has demonstrated solid performance with an earnings increase to $3.52 per diluted share, from $2.73 in the prior-year quarter.
- Consolidated revenue increased by 14%, reaching $9.1 billion; and home sales revenue surged by 14% to approximately $8.5 billion on 22,548 home closings.
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