Daily Brief Consumer: Macromill, Inc, Swiggy, Prosus NV, Geely Auto, XPeng , Sankyo Co Ltd, Leggett & Platt, MarketEnterprise Co Ltd, Newell Rubbermaid and more

• Today, CVC announced a deal to buy out Macromill, Inc (3978 JP). It is agreed and supported by management and the Board. 
• The shareholder register on this stock is wide open. It is not burdened by crossholders. It IS burdened by 7 large active holders who have 55%. 
• Those holders may complain about the process, the transparency, and the low price. This could be a target for an activist or a strategic overbidder.

• Macromill, Inc (3978 JP) has recommended CVC’s tender offer at JPY1,150, a 40.1% premium to the last close.
• While the offer is attractive compared to historical trading ranges, it is 41% below the IPO price and 11% below the midpoint IFA DCF valuation range. 
• The lack of an irrevocable, open shareholder register and large foreign institutions’ shareholding increases the odds of activism to force a bump.  

• Swiggy (1255298D IN) debuts with an 8% premium, raising Rs. 11,328 crore in IPO for Dark store expansion, brand promotion, tech & inorganic growth.
• Swiggy lags behind Zomato across metrics, while Zomato diversifies with high-growth ticketing and “Going Out” segments.
• With both segments is on the edge of becoming Contribution and EBITDA positive, one need to look the results of upcoming quarters of swiggy carefully.

• It has been an eventful week for Naspers and Prosus – Tencent reported 3Q FY24 results yesterday after the HK close and Swiggy listed on the NSE and BSE.
• Prosus sold shares in Swiggy worth $500m and retains an interest of 25% (fully diluted basis).
• Since 2017, Naspers and Prosus invested $1.3bn to build a 31% stake. The group have created $2bn of value for shareholders following the listing.

• Geely’s revenue grew by 20% YoY and deliveries increased by 19% YoY in 3Q24.
• The operating margin improved to 5.3% in 3Q24 versus 2.9% in 3Q23.
• We conclude an upside of 58% and a price target of HK$22 for the end of 2025.

• C3Q24 results from LEAP Motors seems to indicate the profit margins of low-priced EV can reach high single digits.
• We thus revised up XPEV’s 2024-25 top line by 8% and 28% on successful launch of P7+, 2024-25 gross margins by 0.6ppt and 1.7ppt
• Despite these improvements, we opt to maintain the rating of SELL and TP of US$5 unchanged as XPEV’s path to profitability is still unclear.

• Sankyo, a Japanese company previously seen as a value trap, has made changes to enhance shareholder value
• The company has implemented share buybacks, acquiring 24% of shares in the last year and leading to a higher valuation
• The focus on capital efficiency and returning value to shareholders has revitalized Sankyo, leading to increased investor confidence and potential future growth opportunities

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.

• Leggett & Platt’s third quarter 2024 results reflect a challenging performance environment driven by several demand and operational pressures.
• Overall sales amounted to $1.1 billion, representing a 6% decline year-over-year.
• The decrease was primarily attributed to volume declines across all three business segments—Bedding Products, Specialized Products, and Furniture, Flooring and Textile Products—coupled with reductions in raw material-related selling prices.

• Revenue reached JPY5.5bn (+33.7% YoY), driven by growth in Second-hand Online and Mobile & Telecommunications segments.
• Operating profit turned positive at JPY69mn, with a 1.3% margin, despite JPY68mn in relocation expenses.
• The company recorded a JPY32mn derivatives valuation loss due to a stock price decline in a CFD contract.

• Newell Brands recently shared their third quarter 2024 results, highlighting both progress and challenges across various segments.
• The company has been implementing a new corporate strategy aimed at innovation, brand building, and market excellence for more profitable growth, and their results suggest some positive impacts from these efforts.
• On the financial front, Newell reported a narrowing decline in core sales to 1.7% in the third quarter, an improvement compared to the previous quarters of 2024.