In today’s briefing:
- LQ45 Index Rebalance Preview (July): Review Period Nearly Complete
- Silk Laser Firms Offer With Wesfarmers
- Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare
- Yamaha Motors (7272) | Choppy Waters Ahead
- Luyuan Group IPO Preview: An Ambitious Manufacturer of Electric Bicycles Based in China
- Filipino B2B E-Commerce Startup Shoppable Business Attracts US$1.15M Funding
- Monster Beverage Corporation: Still A GARP Opportunity
LQ45 Index Rebalance Preview (July): Review Period Nearly Complete
- The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 31 July.
- Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
- The impact of passive trading will be higher on the deletions than the inclusions since lower liquidity stocks are replaced with higher liquidity stocks.
Silk Laser Firms Offer With Wesfarmers
- On the 19 April, Silk Laser Australia (SLA AU), an operator of specialist clinic networks across Australia, announced a $3.15/share NBIO from Wesfarmers Ltd (WES AU)
- Ahead of the expiry of Wesfarmers’ due diligence, EC Healthcare (2138 HK) snuck in a $3.35/share NBIO. Wesfarmers opted out of its matching rights. Although due diligence remained ongoing.
- SLA has now announced a binding implementation agreement with Wesfarmers at A$3.35/share. No word, as yet, from EC Healthcare. Nor is one expected.
Silk Laser Australia (SLA AU): Wesfarmers Binding Offer, Next Move EC Healthcare
- Silk Laser Australia (SLA AU)‘s binding offer from Wesfarmers Ltd (WES AU) is at A$3.35 per share which is in line with EC Healthcare (2138 HK)’s non-binding proposal.
- While EC Healthcare is a relative minnow, it secured HK$1 billion (A$191 million) financing in May, which suggests a chance of returning with a higher offer.
- If EC Healthcare deployed the HK$1.0 billion loan for the acquisition, it would imply a price of A$3.60 per share, 7.6% above Wesfarmers’ offer.
Yamaha Motors (7272) | Choppy Waters Ahead
- Yamaha Motors had blow-out 1Q results. The 20% share price rally since then suggests much of the good news is in the price
- We are concerned that deteriorating macro-economic conditions in the US due to higher interest rates could derail demand for marine engines and boats
- The stock price of US peer, Brunswick has already started to correct. Yamaha now trades at a premium valuation
Luyuan Group IPO Preview: An Ambitious Manufacturer of Electric Bicycles Based in China
- Luyuan Group (LUYUAN HK), a founder-led company and a pioneer in the e-bike industry in China, is looking to raise capital via the upcoming Hong Kong IPO.
- Luyuan Group (LUYUAN HK) is an extremely ambitious manufacturer of electric bicycles and electric motorcycles in China. ”Luyuan” is a trusted and well-known brand in Asia and worldwide.
- I like profitable growth at scale and believe Luyuan Group IPO would be attractive to investors, given the company’s 40% y/y revenue growth and valuable brand.
Filipino B2B E-Commerce Startup Shoppable Business Attracts US$1.15M Funding
- Filipino B2B e-commerce marketplace Shoppable Business has secured US$1.15 million in an oversubscribed pre-seed funding round, co-led by Foxmont Capital Partners and Seedstars International Ventures.
- An unnamed global network of angel investors also participated.
- The startup will use the funds to grow its business development team, develop more products and features, and expand into new regional markets.
Monster Beverage Corporation: Still A GARP Opportunity
- Qualitative factors and key metrics suggest that Monster Beverage Corporation presents a GARP opportunity.
- The company is growing at scale and holds down a significant part of the energy drinks market.
- The generational consumer shift into stimulated drinks lends researchers much scope to delve into the prospects of Monster Beverage Corporation (NASDAQ:MNST).
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