Daily Brief Consumer: L’Occitane, Aisin , Mitsubishi Motors, Hyundai Mobis, Precot, Hyundai Motor , Taste Gourmet, Health And Happiness (H&H), Britvic PLC and more

• The L’Occitane (973 HK) IFA opines that Reinold Geiger’s conditional voluntary cash (HK$34.00) or scrip offer (10 rollover shares for each share, subject to a cap) is fair and reasonable.
• Irrevocable/Letters of support have nudged lower from 49.83% (17 June) to 47.66% of disinterested shares due to Southeastern Asset Management selling its shares. 
• Nevertheless, the scrip option, an attractive offer and no vocal opposition should facilitate achieving the minimum acceptance condition. At the last close, the gross spread was 2.4%.

• Nine months have passed since Aisin announced a transformative MTP. Investors remain sceptical that it will deliver higher returns. 
• Improving margins on hybrid transmissions, new products for BEVs and better capital allocation could deliver 70% upside for investors.
• The key risk is the assumption that operating margins can rise above 8% versus the historical average of 5%. 

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
• A periodic review is conducted by the Index provider in August every year. The reference period for the August 2024 index rebal event is now complete.
• In this insight, we take a look at our final expectations for ADDs and DELs.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2024.
• Of the 38 pair trades, 21 of them involved holdcos outperforming opcos in the past six months, suggesting increased capital allocation to Korean holdcos relative to their opcos.
• These pairs could generate trading opportunities in terms of their pricing gaps closing reversal (Doosan Corp vs. Doosan Enerbility; Hyundai Mobis vs Hyundai Motor).

• Niche Player in Cotton yarn spinning and Technical Textile with decadal experience.
• Expansion in Technical Textile during FY24 will significantly improve the margin profile and revenue for the company.
• Peer Comparison and assessment at multiple metrics to assess the suitability of investment.

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 3Q 2024.
• The recent push for Korea Value Up program has helped to push up prices of numerous Korean preferred stocks including Hyundai Motor (005385 KS). 
• On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• Despite weak data, HK stock earnings and dividend payouts in the results have been resilient, resulting in solid dividend yields of over 10%.

• Exactly two weeks after the scrip alternative was announced, L’Occitane (973 HK)‘s Composite Document has been issued. The Offer is now open for acceptances.
• The IFA (Somerley) considers terms to be fair & reasonable. A lifetime high coupled with a scrip option – yes, this is fair. 
• Keep an eye on CCASS moves prior to the first closing date, the 23rd July. I have a call with the FA tomorrow. Hit me up with any questions.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Health And Happiness (H&H)

Edison Investment Research is terminating coverage on Oxford Cannabinoid Technologies (OCTP), Britvic (BVIC), Ultimovacs (ULTI), DFR Gold (DFR), The Merchants Trust (MRCH), PB Holding (PBH) and Biodexa Pharmaceuticals (BDRX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.