Daily Brief Consumer: Ola Electric, WH Group, Tencent Music, Shimano Inc, Pan Pacific International Holdings, Tesla , TSE Tokyo Price Index TOPIX, V-Mart Retail and more

• Ola Electric is now looking to raise about US$730m in its upcoming India IPO.
• Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
• In our previous notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.

• Earlier this month, WH Group (288 HK) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ,
• These ops accounted for 54% of WHG’s FY23 revenue and 22.4% of the operating profit; compared to 56% and 44.9% respectively in FY22.
• We’ve been here before. A Smithfield spin-off was touted in 4Q23 (in the media). WHG acquired Smithfield for US$4.7bn in 2013, ahead of its 2014 listing. 

• Ola Electric (1700674D IN), the largest Indian player in electric two-wheel vehicles (E2W), is seeking to raise up to US$734 million. 
• We previously discussed the IPO in Ola Electric IPO: The Bull Case, Ola Electric IPO: The Bear Case and Ola Electric IPO: The Investment Case. 
• Our valuation analysis suggests that the IPO price range of Rs72-76 per share is attractive. Therefore, we would participate in the IPO.

• We screen for stocks at the extreme ends of their positioning or momentum ranges among active Emerging Market equity funds.
• High Positioning, Negative Momentum: BYD Company Limited Class H, Novatek Microelectronics Corp.
• Low Positioning, Negative Momentum: Banco Bradesco SA Pfd, LG Chem Ltd.    

• Shimano’s Q2 results exceeded expectations with revenue and operating profit significantly beating estimates despite a YoY decline.
• Full-Year revenue and operating profit guidance were revised upward, reflecting improved performance and aligning with analyst consensus.
• Our estimate for FY25 was significantly raised; despite full valuations, further recovery and potential shareholder returns offer continued bullish outlook.

• Inflation is encouraging customers to seek out discount chains, led by PPI’s Don Quijote. 
• Backed by expansion of private brand lines and more food lines, as well as higher sales to tourists, PPI has been posting record results.
• There continues to be high expectations for further growth at home and abroad.

• Tesla is a polarizing company with both enthusiastic supporters and skeptical critics.
• The company has the potential to become the most valuable in the world if it solves autonomous transportation.
• The debate around Tesla is focused on its Full Self Driving software, which has recently transitioned to a neural net architecture and is best experienced firsthand at a Tesla delivery center.

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.

• Ola Electric is now looking to raise about US$730m in its India IPO.
• Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
• In our previous notes, we looked at the company’s past performance. In this note, we will talk about valuations.

• Companies that have increased their valuations over the past year are those with higher valuations and have further increased their ROE and ROA, resulting in even higher valuations.
• The difference between the characteristics of companies whose valuations increased and those whose valuations did not change over the past year is the foreign ownership ratio.
• Companies with low foreign ownership have less access to overseas investors’ suggestions for solving individual company problems, which is why they are slow to act to improve capital profitability.

• V-Mart Retail (VMART IN)  is an omni-channel value retailer, providing a range of products aimed at Bharat’s middle and lower middle class
• The company has implemented a cluster strategy that has supported its expansion across India. In FY24, V-Mart opened 46 new stores nationwide.
• Being over-indexed to value, V-MART has posted slower revenue growth compared to the recent past. New Warehouse and tigher control over inventory could boost cashflows further.