In today’s briefing:
- BIGLY Marui Group (8252 JP) Buyback, Backed by Big Dividend Boost
- Where Are We Now Regarding New Dividend Distribution Procedure in Korea?
- Seven & I: Investor Activism Update
- Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price
- Shakeys Pizza/Keepers Holdings Q1 2023 Results: What to Expect?
- Alibaba (9988 HK) Earnings Preview: Better Growth and Better Margin for 4Q23
- MGM China: 1Q23 Results Shine Positive Light on Higher Valuations Ahead
- Bikaji Foods IPO Lock-Up – Small Expiry with a Chance to Lift the Overhang
- Disney’s Q2 2023 Earnings: Now Is The Time To Deliver
- New Index Distracts from Prime Market Issues While Providing Long/Short Opportunities for Investors
BIGLY Marui Group (8252 JP) Buyback, Backed by Big Dividend Boost
- Last year, fintech-wannabe Marui Group (8252 JP) announced a large buyback as part of its ¥100bn distribution to shareholders in its MTMP, then increased the size
- They repurchased ¥26bn of shares. Today they announced the return of ¥50bn this year including a ¥40bn buyback. And having arrived at their optimal balance sheet structure, a new policy.
- That’s 10% of market cap and 11.6% of shares. And again a delayed start. And as always, shareholder structure matters. In this case a lot.
Where Are We Now Regarding New Dividend Distribution Procedure in Korea?
- 646 listed companies (28.5%) in Korea have modified their articles of incorporation this March to prioritize determining the dividend amount before setting the dividend record date.
- New practices will arise involving the use of single-stock futures for arbitrage trading through baskets among major high-dividend companies whose dates of the dividend records overlap.
- It will be crucial to keep track of the dividend record dates with precision. In this connection, KLCA and KOSDAQCA will create a website monitoring this information.
Seven & I: Investor Activism Update
- The relationship between Value Act and Seven & I Holdings (3382 JP) has become toxic due to Value Act’s opportunistic behaviour after the passing of the Seven & I founder.
- Seven & I and Value Act have been exchanging letters more frequently, with recent ones taking on an angry tone, especially from Seven & I’s side.
- Value Act’s attempt to block the reappointment of experienced directors could cause long-term value disruption, especially if their goal is to pressure a spinoff of the convenience store business.
Fast Retailing: Great Fundamentals for Uniqlo, Shame About the Share Price
- Uniqlo is such a mainstay of Japanese retailing, and indeed life, that its dominance seems inevitable and unchanging.
- Yet it has morphed from a mess of poorly judged acquisitions and failed overseas experiments into Japan’s biggest retail export – and still manages to pull off 20% growth.
- Its latest target of ¥10 trillion in 10 years is far-fetched but its history of persistent determination suggests continued expansion is a certainty.
Shakeys Pizza/Keepers Holdings Q1 2023 Results: What to Expect?
- It’s barely three weeks since the annual results in April, and now Shakey’s Pizza (PIZZA PM) / The Keepers Holdings (KEEPR PM) will declare their Q1 2023 results mid-May.
- Both results are expected around the 14th/15th of May, with a confirmation of Shakey’s Pizza (PIZZA PM) holding its post-results call on the 17th of May.
- We expect stellar Q1 results and good guidance for 2023 for both companies.
Alibaba (9988 HK) Earnings Preview: Better Growth and Better Margin for 4Q23
- We believe revenue will grow by 5.6% YoY in 4Q23 and by 9% in FY2023 versus 2.7% in FY2022.
- We also believe operating margin will improve slightly to 8.9% in 4Q23 versus 8.2% in 4Q22.
- We believe the stock has an upside of 63% for March 2024.
MGM China: 1Q23 Results Shine Positive Light on Higher Valuations Ahead
- Much market sentiment continues to await more evidence that recovery in Macau can be sustained long term towards reaching baseline 2019 revenue levels.
- MGM China Holdings Ltd. market share tracked under double digits pre-covid but is now poised to rise to low to mid teens going forward.
- We see the shares as undervalued because its ramp ahead starts at a lower base than peers and is poised for significant sequential earnings beats ahead.
Bikaji Foods IPO Lock-Up – Small Expiry with a Chance to Lift the Overhang
- Bikaji Foods (BIKAJI IN), an ethnic snacks company, raised approximately US$107m in its India IPO. The stock was listed on 16th Nov 2022, its six-month lockup will expire soon.
- Bikaji was the third largest ethnic snacks company in India and the second fastest growing company in the Indian organized snacks market in FY22, as per Frost & Sullivan (F&S).
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Disney’s Q2 2023 Earnings: Now Is The Time To Deliver
- Disney is scheduled to release its Q2 2023 results later this week.
- A number of factors are pointing to a strong and a better than expected quarter, but long-term problems remain.
- The macroeconomic environment is also supportive for Disney’s Parks, Experiences and Products segment.
New Index Distracts from Prime Market Issues While Providing Long/Short Opportunities for Investors
- TSE may be trying to dodge criticism that prime market, which includes many illiquid companies, has large gap with the concept of a “market that global investors can invest in.”
- JPX Prime 150 Index is expected to solve the problem of TOPIX buying up companies of low quality and not engaging with companies due to the large number of components.
- Neither index is expected to differ much in performance since they are both market capitalization-weighted indices, but the difference in component stocks compared to TOPIX will provide investment opportunities.
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