In today’s briefing:
- Jardine C&C (JCNC SP): Potential MSCI Inclusion as NAV Discount Shrinks
- TIGER Top 10 Rebalancing: A Big Change Awaits
- FSN E-Commerce (Nykaa) Lockup Expiry – US$2.5bn Unlock with a Very Scattered Shareholding
- Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection
- The First Step in Major Shift in Management Strategy Is for Sapporo to Sell Its Cross-Shareholdings
- DOHOME : Weak 3Q22 Earnings as Expected
- Colgate-Palmolive Co: Major Drivers
Jardine C&C (JCNC SP): Potential MSCI Inclusion as NAV Discount Shrinks
- Jardine Cycle & Carriage (JCNC SP) was deleted from the SIMSCI Index in November 2020 and could be added back to the index at the upcoming SAIR.
- If added to the index, we estimate passive MSCI trackers will need to buy 7.9m shares (US$176m; 11 days of ADV) at the close on 30 November.
- Jardine Cycle & Carriage (JCNC SP) is trading at a tight discount to its listed holdings and the spread could widen post the MSCI implementation.
TIGER Top 10 Rebalancing: A Big Change Awaits
- The two names in LONG (LG Energy Solution and Celltrion) and the two names in SHORT (Shinhan Financial and KB Financial) are almost a foregone conclusion.
- POSCO Holdings is now ahead of Kakao Corp due to the recent sharp rise in its share price. But the gap between them is still quite tight.
- This rebalancing will likely aggravate LG Energy’s flow crunch as it also awaits an MSCI up-weight (2x ADTV) in end-November and a KOSPI 200 up-weight (2x ADTV) on December 8.
FSN E-Commerce (Nykaa) Lockup Expiry – US$2.5bn Unlock with a Very Scattered Shareholding
- In Nov 2021, Nykaa raised around US$720m in its India IPO, via mostly selling secondary shares.
- Nykaa is a lifestyle focussed e-commerce platform and consumer brand offering a portfolio of beauty, personal care and fashion products, including its own branded products.
- In this note, we will talk about the upcoming lockup expiry.
Calbee – Price Hikes to Deliver Upside As Buybacks Provide Downside Protection
- Calbee Inc (2229 JP)’s share price fell 4% today from the top end of the trend channel as 2QFY23 OP fell short of consensus by ¥658m to ¥4.9bn.
- There was also a ¥3.5bn downgrade to full-year OP guidance on higher-than-expected energy and raw material costs. However, this seems too conservative, especially with 10-20% price hikes in September-November.
- In addition, share buy-backs are starting to become a regular part of shareholder returns with ¥12.0bn per-year in share buybacks in the previous fiscal year and the current fiscal year.
The First Step in Major Shift in Management Strategy Is for Sapporo to Sell Its Cross-Shareholdings
- It is doubtful that independent outside directors are actually able to actively bridge the gap between shareholders and the board of directors, as the Corporate Governance Code states in Japan.
- Behind the lack of willingness on the executive team to make major changes in the way things have been done is high % of specified shareholders (40%), including cross-held shares.
- No major change in business strategy is expected unless foreign shareholder ratio exceeds 30%. In order for the current large shareholders’ equity to decline, Sapporo should sell its cross-held shares.
DOHOME : Weak 3Q22 Earnings as Expected
- Maintain HOLD recommendation for DOHOME with a target price of Bt14.10. DOHOME’s 3Q22 net profit came in at Bt50m (-85%YoY,-84%QoQ),in-line with our forecast but below BB consensus estimated by 34%
- 3Q22 earnings sink both YoY and QoQ Its net profit came out at Bt50m (-85%YoY, -84%QoQ),the lowest level since listed.The 9M22 result accounted for 88%of full-year net profit in 2022.
- The significant drop in 3Q22 earnings pressured by lower margin from steel products, clearance sales in decoration materials category, and rising all products cost as a result from rising inflation.
Colgate-Palmolive Co: Major Drivers
- Colgate-Palmolive delivered a disappointing set of results in the relatively unstable operating environment and failed to meet revenue expectations of the market despite producing a high single-digit organic sales growth in the third quarter, with expansion in every division.
- The company also saw an increase in all four categories, with high single-digit growth in personal care, pet nutrition, and oral care.
- Another capability they are expanding across the firm is revenue growth management (RGM) with their data and analytics team strategizing on the same.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
