In today’s briefing:
- Two Trading Opportunities from LG Chem’s Stake Sale in LG Energy Solution
- MOG Digitech (1942 HK): What the Flow Is Going On?
- Amara Holdings Gains On Possible Offer
- Fast Retailing: Opportunities for Long-Term Growth Overshadowed by High Valuation
- Shiyue Daotian (十月稻田) Pre-IPO: Aggressive Brands – A Local Viewpoint
- Ottogi Corp: Strong Financial Growth and an Environmental Champion
- Watch for Changes in Proxy Voting by Domestic Institutional Investors on Shareholder Proposals
Two Trading Opportunities from LG Chem’s Stake Sale in LG Energy Solution
- This issue offers two trading opportunities. The first is the passive inflow resulting from an increase in the float rate. The second is the possibility of additional stake sales.
- It will provide LG Energy with a passive inflow of 760K shares (₩426.4 billion), which is a significant passive impact at approximately 3.2x ADTV.
- There would be further stake sales of LG Chem’s shares in LG Energy. LG Chem plans to pursue additional stake sales targeting local institutional investors.
MOG Digitech (1942 HK): What the Flow Is Going On?
- MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
- MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
- Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.
Amara Holdings Gains On Possible Offer
- Hotel and investment property play Amara Holdings (AMA SP) announced that its controlling shareholders are in discussions with a third party in relation to a possible transaction.
- Shares up for grabs controlled by the Teo family are estimated to exceed 65% of shares out.
- No price was mentioned. And there is no guarantee a firm Offer will unfold. Shares have gained 38% in the past three trading sessions.
Fast Retailing: Opportunities for Long-Term Growth Overshadowed by High Valuation
- Japan’s strong domestic demand and a rebound in China fuel optimistic growth outlook for Fast Retailing (9983 JP) in the short term.
- Furthermore, the markets such as Europe, North America, South East Asia, India, and Australia present promising long-term growth opportunities.
- However, Fast Retailing’s valuation is a cause for concern as it currently trades at a consensus FY27 OP of 20.0x.
Shiyue Daotian (十月稻田) Pre-IPO: Aggressive Brands – A Local Viewpoint
- The company mainly sells its products online and spends much of its advertising budget online.
- The rice market is fragmented and there are two main competitors, Arawana and Fortune.
- We believe the company’s dry food can use the reputation of its rice to boost sales.
Ottogi Corp: Strong Financial Growth and an Environmental Champion
- Ottogi Corporation not only achieved remarkable revenue and net income growth in 2022, but also maintained an ESG rating of A for five consecutive years.
- Ottogi demonstrates strong sustainability performance, with high scores in “Environment Policy”, “Chemical Management”, and “Human Rights, Shared Growth & Community”.
- Ottogi’s 10-year dedication to environmental management is evidenced by tangible data, demonstrating remarkable achievements in the management of greenhouse gas (GHG) emissions, energy usage, water consumption, and waste recycling.
Watch for Changes in Proxy Voting by Domestic Institutional Investors on Shareholder Proposals
- Many companies that cannot make significant investments in growth will reduce cash from their balance sheets through shareholder returns, and ROE+DOE will continue to reach high levels in FY2023.
- A company with a P/B of less than 1x for a long time should consider the option of going private after weighing the costs and benefits of being listed.
- Although most of the shareholder proposals will be rejected unless the foreign ownership is very high, whether the voting rights of domestic institutional investors will change remains to be seen.
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