In today’s briefing:
- Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
- ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel
- Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
- The Clorox Company: A Genius Strategy to Crush Digital Transformation and Improve Sales! – Major Drivers
- Sirius XM Holdings Inc: Flexible Pricing and Packaging & 5 Catalysts For Future Growth! – Major Drivers
Weekly Deals Digest (11 Feb) – Lawson, Benefit One, Welbe, China TCM, L’Occitane, Hollysys
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Ola Electric (1700674D IN) and FirstCry (0172540D IN) IPOs.
- Event-Driven developments: Benefit One Inc (2412 JP), Lawson Inc (2651 JP), Welbe Inc (6556 JP), China Traditional Chinese Medicine (570 HK), L’Occitane (973 HK), Hollysys Automation Technologies (HOLI US).
Exploring Prioritized Buyback/Cancellation of Samsung Electronics & Hyundai Motor Prefs
- Samsung Elec & Hyundai Motor’s high proportion of preferred stocks leads to their unusually high cost of capital, making themselves prime targets for the govt’s Corporate Value Up policy.
- Policy likely focuses on aggressive share buybacks, especially preferred stock repurchase, to improve PBR. Pension funds may invest heavily in ETFs, offsetting dilution effects.
- Hyundai Motor may pursue more aggressive shareholder returns due to the India listing, possibly prioritizing preferred share repurchases as it introduces risks of value transfer controversies within Korea.
ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, Thai Credit Bank finally ended Thailand’s long dry spell, although it wasn’t a happy ending.
- For placements, REITs appear to be coming back to life with rates now having peaked.
Investors Are Valuing Equities Thinking that Managers Are Still Slow to Put Cash to Good Use?
- EPS and BPS had run in parallel since June 2022, but BPS has accelerated at a more rapid pace since May 2023, and TOPIX has risen sharply since April 2023.
- Since TOPIX is more correlated with BPS than EPS, the hypothesis that “stock prices are more reliant on BPS increases, including cash increases, than on EPS” would be considered.
- Investors may believe that Japanese management still needs more time to use cash effectively, and evaluate companies based on their BPS, which indicates a movement toward improved cash flow.
The Clorox Company: A Genius Strategy to Crush Digital Transformation and Improve Sales! – Major Drivers
- The Clorox Company delivered second-quarter financial results for 2024 that exceeded expectations, driven largely by a strong recovery from a cyber attack that occurred in August.
- The company preserved its strong brand superiority by advancing its strategies to drive top line growth and rebuild margins, as well as actively managing currency headwinds in Argentina.
- Retailer inventories are being refreshed more quickly than anticipated, which is aiding the restoration of distribution and improvement of market shares.
Sirius XM Holdings Inc: Flexible Pricing and Packaging & 5 Catalysts For Future Growth! – Major Drivers
- In its latest earnings, SiriusXM Holdings Inc.
- discussed its strong operating and financial performance in 2023.
- During the year, the company exceeded expectations, surpassing its adjusted EBITDA and free cash flow target.
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