In today’s briefing:
- TOPIX Inclusions: Who Is Ready (Jul 2023)
- Costa – Another Bite at the Apple for Paine Schwartz?
- Sheng Siong (SSG SP): Steady At Execution, Good Long-Term Play
- Hyundai G.F. Holdings: A Holdco Creation With In-Kind Investment in HDS & Hyundai Green Food
- The Kraft Heinz Company: Winning the Market with Their Easy Meals and Taste Elevation! – Key Drivers
- PDD Holdings Inc.: 3 Major Factors Responsible For Its Recovery – Key Drivers
- Honda Motor Co.
- The Interpublic Group of Companies: Overcoming Challenges in Integrated Advertising & Creativity Led Solutions! – Key Drivers
TOPIX Inclusions: Who Is Ready (Jul 2023)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Anycolor (5032 JP) and Lifedrink (2585 JP) have already confirmed their moves to the Prime Market and are expected to have TOPIX Inclusion Events at the end of July 2023.
- More recently, Plus Alpha Consulting (4071 JP) announced their move to the Prime Market and are likely to have a TOPIX Inclusion Event at the end of August 2023.
Costa – Another Bite at the Apple for Paine Schwartz?
- Back in October 2022, Costa Group (CGC AU), one of Australia’s largest fresh fruit and vegetable producers, was understood to have been approached by its former major shareholder, Paine Schwartz.
- This was discussed in Costa Group’s Low-Hanging Fruit: Paine Schwartz Renews Interest. At the time, media reports speculated Paine Schwartz had no current intention of making a takeover bid.
- Last week, Paine Schwartz made an A$3.50/share NBIO by way of a Scheme. Paine Schwartz currently holds 14.84%.
Sheng Siong (SSG SP): Steady At Execution, Good Long-Term Play
- It attracts investors when a company’s 15-year ROCE averages over 25% (and has never gone below 20%). Sheng Siong (SSG SP) is one of those companies.
- With 13% of the market capitalization in net cash (283 mn SGD) and a payout ratio averaging 70%, the stock trades at a yield of almost 4%.
- We believe the store expansion of 3-4 stores/year ( on a base of 67) in Singapore is possible, given the pipeline of HDB tenders.
Hyundai G.F. Holdings: A Holdco Creation With In-Kind Investment in HDS & Hyundai Green Food
- Last week, Hyundai Dept Store Group announced that it will establish a single holding company structure with Hyundai G.F. Holdings controlling all of the group affiliates.
- Hyundai G.F. Holdings plans to make an in-kind investment in Hyundai Department Store (HDS) to make Hyundai Green Food and Hyundai Department Store as subsidiaries.
- This in-kind investment in HDS and Hyundai Green Food by Hyundai G.F. Holdings is not a deal that adds clear-cut value to Hyundai G.F. Holdings’ shareholders.
The Kraft Heinz Company: Winning the Market with Their Easy Meals and Taste Elevation! – Key Drivers
- Kraft Heinz delivered a positive result and managed an all-around beat in the last quarter.
- In the quarter, the company introduced It Has to be HEINZ, a new worldwide campaign that represents the brand’s first unification under a single creative approach.
- We give The Kraft Heinz Company a ‘Hold’ rating with a revised target price.
PDD Holdings Inc.: 3 Major Factors Responsible For Its Recovery – Key Drivers
- PDD delivered an all-around beat in the previous quarter and the company saw clear recovery trends.
- Revenue increased in the quarter and contributed to a total of RMB37.6 billion.
- PDD has also launched its electronic shopping season and invested millions of RMB for promoting universal and high-quality access to reading.
Honda Motor Co.
- Honda Motor’s results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street. but, their efforts in cost reduction and improved pricing strategies helped maintain an operating profit margin above 5%.
- Additionally, they aim to provide attractive dividends to shareholders, with a significant increase per share and a share buyback program.
The Interpublic Group of Companies: Overcoming Challenges in Integrated Advertising & Creativity Led Solutions! – Key Drivers
- Interpublic Group of Companies managed to exceed analyst expectations in terms of revenue as well as earnings.
- The company’s organic revenue before billable expenses was down 20 basis points compared to last year’s extremely high first-quarter organic increase of 11.5%.
- We give the Interpublic Group of Companies a ‘Hold’ rating with a revised target price.
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