Daily Brief Consumer: Kusuri no Aoki Holdings , Netflix Inc, Samson Holding, Com7 , Astra International, China Resources Beverage, Oriental Watch, Modine Manufacturing Co, BellRing Brands and more

• The drugstore space in Japan is super-interesting. The stories, the mergers, the activists. And of course, the defence against activists.
• In Feb-2024, Aeon did a deal with an activist to cause a future deal between Tsuruha and Welcia. Aeon also owns a stake in Kusuri no Aoki Holdings (3549 JP). 
• The Aoki brothers (CEO and VP) exercised warrants in August and re-arranged their holdings. Now the family owns 34.7%. Today, after Q1 earnings, the company announced a 5+% buyback.

• Netflix recently hit an all-time high on the stock market, capitalizing on the chaos in the entertainment industry
• The company was initially seen as a renegade tech startup, leading the streaming market with its first mover advantage
• After reporting a loss in subscribers, Netflix announced plans to launch an advertising-supported business to combat competition in the streaming wars.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Back on the 16th July, furniture trader Samson Holding (531 HK) announced an Offer, by way of a Scheme, from Shan Huei Kuo, Samson’s Chairman.
• The Cancellation Price is $0.48/share (final), a 50% premium to last close; but more notable if going back a month. This looks done. However, Samson is an illiquid micro-cap.
• The Scheme Doc is now out, with a Court Meeting to be held on the 21st October. Expected payment on the 14 November. The IFA says fair & reasonable.

• Samson Holding (531 HK)’s IFA opines that Mr Samuel Kuo (Chairman)’s HK$0.48 privatisation offer to be fair and reasonable. The vote is on 21 October. 
• Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). Despite the market rally, most peers’ shares have declined since the offer announcement. 
• The attractive premium, lack of shareholders holding a blocking stake, and low AGM minority participation rate point to a done deal. At the last close, the gross/annualised spread is 3.2%/29.8%.

• A third of the way through the review period for the December rebalance of the Stock Exchange of Thailand SET 50 Index (SET50 INDEX), we see four potential index changes.
• Passive trackers will need to buy between 0.5-4.3 days of ADV on the inclusions and sell between 0.1-2.9 days of ADV on the deletions.
• The forecast adds have outperformed the forecast deletes and the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) over the last 5 months.

• Astra International is well-positioned to fend off the challenge of incoming EV players to Indonesia, a country far more suited to Hybrid EVs, with little charging infrastructure.
• Despite new entrants, the company has maintained its market share at 57% YTD, with Chinese EV makers fighting amongst themselves and other Japanese ICE brands losing some share. 
• Astra continues to develop new HEV products, with a line up of 10 BEVs due by 2028 from Toyota but investments in the ecosystem are already underway. Valuations remain attractive.

• China Resources Beverage (CRB HK), China’s largest purified drinking water company, is premarketing an HKEx to raise US$0.5-1 billion.
• We previously discussed the IPO in CR Beverage IPO: The Bull Case and CR Beverage IPO: The Bear Case. In this note, we examine the latest updates in the PHIP.
• The investment case rests on core business offsetting slowing growth with margin improvement, beverage’s fast-paced growth, narrowing the margin gap with Nongfu Spring (9633 HK), and return to FCF generation.

• Oriental Watch (398 HK) will report its H1 FY25 result in mid-November. We expect earnings to be down 5-10% YoY, as SSSG would be flattish for the period.
• We expect a 25-26 cent dividend ( ~14% yield annualized). With the stimulus measures in place, we expect China’s mood to be slightly more upbeat.
• Oriental Watch (398 HK) goes ex-dividend today (23.5 cent/share dividend). As we enter trading today, it may be available at a higher yield. 

• Modine Manufacturing Company reported a strong start to Fiscal 2025, showcasing significant growth and operational successes across its segments.
• The company’s proactive strategic initiatives, including acquisitions and the implementation of a transformative 80/20 business strategy, have evidently positioned it well for sustainable growth.
• However, adjustments in performance expectations in specific segments highlight the ongoing adaptation to market conditions.

• BellRing Brands, created through acquisitions by Post Holdings, has experienced substantial growth, with its stock price increasing from $20 to $59 since its last write-up on VIC over four years ago.
• While some brands like Powerbar and Dymatize have underperformed, Premier Protein has been a standout success for BellRing Brands.
• With anticipated sales of $2 billion and EBITDA of $410 million for fiscal year 2024, BellRing Brands is viewed as a compelling investment opportunity with a promising future and reasonable valuation.

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.