In today’s briefing:
- LG Energy – Quick Thoughts on US$2bn EB Offering by Parent
- LG Chem Official ₩2.6T EB Issuance (1.6% of LG Energy SO): Details & Trading Considerations
- Plus Alpha Consulting (4071 JP) – ¥30bn Offer Leads to ¥5bn TOPIX Inclusion
- Playmates Toys: Movie and Toy Reviews TMNT Mutant Mayhem Suggest Big Upside Ahead
- Nusantara Sejahtera Raya (Cinema XXI) IPO – The Positive – High Market Share, Steady Recovery
- Seven & I: 7-Eleven US Poses Challenges for FY24 Guidance
- Nusantara Sejahtera Raya (Cinema XXI) IPO – The Negatives – Private Placement, Not a Primary Raising
- McCormick & Company: A Spicy Investment Opportunity? – Key Drivers
- Sonos Inc.: A Brave Attempt To Steer Clear of Macroeconomic Headwinds! – Key Drivers
- WDFC: No Margin Benefit
LG Energy – Quick Thoughts on US$2bn EB Offering by Parent
- LG Chem Ltd (051910 KS) aims to raise around US$2bn via offering 2028 and 2030 puttable USD exchangeable bonds for LG Energy Solution (373220 KS) shares.
- LG Chem (LGC) had been rumoured to sell down some of its stake in LG Energy Solutions (LGES), hence, this deal will remove the overhang on LGES.
- In this note, we have a quick look at the deal and provide our thoughts on the structure.
LG Chem Official ₩2.6T EB Issuance (1.6% of LG Energy SO): Details & Trading Considerations
- The exchange prices are ₩687,500 and ₩715,000 at a premium of 25-30% to the closing price of LG Energy Solution today.
- The commencement date for both the 5-year and 7-year bonds’ exchange is August 28th.
- We should design a strategic setup that targets a band play within the current price range and the low ₩700,000 range.
Plus Alpha Consulting (4071 JP) – ¥30bn Offer Leads to ¥5bn TOPIX Inclusion
- Plus Alpha Consulting (4071 JP) listed on TSE Growth at end-June 2021 at ¥2300/share, which was 90x the trailing fiscal year’s earnings. but only about 65x then-current year earnings.
- The stock popped 20+% on Day 1 to close ¥2803. Last Friday, two years and 13% higher at ¥3185/share, the company announced a Secondary Offering and move to TSE Prime.
- It’s a big offering. It’s a smaller TOPIX inclusion event. Next spring we’ll see more upweights.
Playmates Toys: Movie and Toy Reviews TMNT Mutant Mayhem Suggest Big Upside Ahead
- Three weeks ahead of the global launch of TMNT Mutant Mayhem momentum is building
- Google Trends searches reveal rising interest in both movies and toys
- Risk/Reward is still highly attractive, last time a TMNT movie was a success stock hit 4 HKD
Nusantara Sejahtera Raya (Cinema XXI) IPO – The Positive – High Market Share, Steady Recovery
- Nusantara Sejahtera Raya (Cinema XXI) aims to raise up to US$160m in its Indonesia IPO.
- Cinema XXI is a premium theatrical exhibition, F&B and experience company. It is the largest cinema chain operator in Indonesia.
- In this note, we talk about the positive aspects of the deal.
Seven & I: 7-Eleven US Poses Challenges for FY24 Guidance
- Gasoline retail prices have caught up with declining wholesale prices, and it should lead to around 16-20% QoQ decrease in retail fuel margin to ¥35-37 cents per gallon.
- US gas station merchandise sales exhibited weak performance this year, experiencing YoY growth rates of 5%, -2%, -15%, -17%, and -22% during the first five months.
- We anticipate around 25% downside for Seven & I Holdings (3382 JP) after earnings, as it may face challenges in achieving its FY24 guidance.
Nusantara Sejahtera Raya (Cinema XXI) IPO – The Negatives – Private Placement, Not a Primary Raising
- Cinema XXI (CINEMA IJ) aims to raise up to US$160m in its Indonesia IPO.
- Cinema XXI is a premium theatrical exhibition, F&B and experience company. It is the largest cinema chain operator in Indonesia.
- In this note, we talk about the not-so-positive aspects of the deal.
McCormick & Company: A Spicy Investment Opportunity? – Key Drivers
- McCormick managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
- The company’s sales performance reflects the strength of its diverse worldwide portfolio as well as the successful implementation of its strategy.
- Additionally, McCormick is extending into the quickly developing Mexican aisle with Cholula’s true Mexican flavor in new formats.
Sonos Inc.: A Brave Attempt To Steer Clear of Macroeconomic Headwinds! – Key Drivers
- Sonos delivered a positive result and managed an all-around beat in the last quarter.
- The reported revenues were slightly ahead of expectations, although there was a decrease compared to the previous year.
- Sonos observed softening demand in the home theater category due to macroeconomic factors and increased competition but managed to gain market share.
WDFC: No Margin Benefit
- WD-40 Company (WDFC) reported fiscal third quarter (May) results benefiting from already announced price increases while unit volume declined in Europe and Americas regions
- Unlike prior quarterly results where there was a clear negative in the business, this time WDFC benefited from order timing that is not likely to repeat in the fourth quarte
- The price increases WDFC implemented were to help push gross margin back towards the 55 percent level. This has not been the case as demand has waned
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