In today’s briefing:
- Poly Culture (3636 HK): H Share Class Meeting on 3 November
- Poly Culture (3636 HK)’s Offer: 3rd Nov Shareholder Vote. Still Get Involved
- Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma
- Tuhu Car IPO: Forecasts and Valuation
- Seven & I: Challenging Guidance, The US Business Needs to Fire on All Cylinders
- It Is Time to Identify True Value and Growth Stocks Rather than High and Low P/Bs
- Booking Holdings Inc.: The Margin Expansion Story Continues! What’s Their Secret Sauce? – Major Drivers
- Sai Silks Kalamandir IPO – Not Particularly Exciting but Is Relatively Cheap
- [Week 3] Namaste India 🙏 | Bajaj Auto Ltd (BJAUT IN) | Exports Could Improve Further
- Philip Morris International Inc.: The Smoke-Free Business Revolution You Didn’t See Coming! – Major Drivers
Poly Culture (3636 HK): H Share Class Meeting on 3 November
- The Poly Culture Group Corp H (3636 HK) H Shareholders’ class meeting is scheduled for 3 November. The IFA considers the HK$8.88 per H share offer fair and reasonable.
- The key condition is approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). No independent H Shareholder holds a blocking stake.
- The offer’s 77.6% premium to the undisturbed price and shareholder structure helps the vote. At the current price and for the 23 November payment, the gross/annualised spread is 3.3%/19.2%.
Poly Culture (3636 HK)’s Offer: 3rd Nov Shareholder Vote. Still Get Involved
- Back on the 23 June, SOE-backed Poly Group tabled an HK$8.88 bid per Poly Culture Group (3636 HK) H Share and RMB8.17386240 per Domestic Share. Terms were declared final.
- This Merger by Absorption Offer incorporates a Scheme-like vote. There is no tendering condition. The premium to last close is 77.6%; and a 112.5% premium to the five-day closing average.
- The Composite Doc is out. Independent H-shareholders get to vote on the transaction on the 3rd of November. Payment is expected on or before the 23 November. I’d get involved.
Costa Group (CGC AU): Paine Schwartz’s Final Proposal Poses a Dilemma
- Costa Group Holdings (CGC AU) has disclosed a revised non-binding indicative proposal from Paine Schwartz Partners at A$3.20 per share, 9.6% lower than the previous offer on a like-for-like basis.
- The weak CY23 outlook impacted the debt that could be taken on to meet the IRR hurdles of the previous offer. The revised offer is the best and final offer.
- The Board faces a dilemma as the offer is light, but some shareholders will want the Board to accept as trading volatility making Costa more suited to the private market.
Tuhu Car IPO: Forecasts and Valuation
- Chinese automotive maintenance services platform Tuhu Car has announced the terms for its HKEx IPO. Tuhu plans to raise net proceeds of HK$1.0-1.1bn (US$132-161m) through the issuance of 40.62m shares.
- Tuhu Car (2007986D HK) ‘s franchised business model seems to have worked well, while its focus on high margin products/services have helped improve profitability.
- In this insight, we discuss our forecasts and valuation for the company, and our analysis suggests that Tuhu Car’s IPO is priced reasonably.
Seven & I: Challenging Guidance, The US Business Needs to Fire on All Cylinders
- Seven & I Holdings (3382 JP)‘s share price has remained below ¥6,600 since the end of its bull run in March 2023.
- Short-Term optimism hinges on a substantial earnings beat, but the US business challenges make it unlikely.
- Seven & I faces valuation risks, trading near peak multiples with diminishing growth prospects.
It Is Time to Identify True Value and Growth Stocks Rather than High and Low P/Bs
- If a company with P/B less than 1 conducts share buyback, its P/B will decrease; if a company with P/B greater than 1 conducts share buyback, its P/B will increase.
- A company with P/B below 1x can be a great value stock if it can demonstrate to investors that it will generate ample cash flow, in addition to repurchasing shares.
- Even if a company’s P/B is well above 1x, it is required to explain to investors whether there are any gaps in its cash flow growth scenario.
Booking Holdings Inc.: The Margin Expansion Story Continues! What’s Their Secret Sauce? – Major Drivers
- Booking Holdings Inc. managed to exceed analyst expectations in terms of revenue as well as earnings.
- The 268 million hotel nights booked in the second quarter increased by 9% year over year, and the $39.7 billion in gross bookings, the largest quarterly total ever, surged by 15% year over year.
- The positive demand environment caused hotel nights and revenue bookings to surpass the company’s previous projections.
Sai Silks Kalamandir IPO – Not Particularly Exciting but Is Relatively Cheap
- Sai Silk Kalamandir (SSKL IN) is looking to raise about US$145m in its India IPO.
- Sai Silk Kalamandir (SSK) is one of the largest retailers of ethnic apparel in South India, particularly in sarees, according to Technopak.
- In this note, we look at the company’s past performance and provide our thoughts on valuations.
[Week 3] Namaste India 🙏 | Bajaj Auto Ltd (BJAUT IN) | Exports Could Improve Further
- ATH for the NIFTY Index (NIFTY INDEX), Going ahead, we expect the momentum in the market to continue.
- Healthcare and Information Technology remain interesting pockets to watch when it comes to iShares MSCI India ETF (INDA US).
- Other names discussed include Bajaj Auto Ltd (BJAUT IN), Hindustan Unilever (HUVR IN), Bandhan Bank Ltd (BANDHAN IN) and Vedant Fashions (MANYAVAR IN).
Philip Morris International Inc.: The Smoke-Free Business Revolution You Didn’t See Coming! – Major Drivers
- Philip Morris International managed to surpass the revenue and the earnings expectations of Wall Street.
- This fantastic result supported high teens’ currency-neutral adjusted diluted EPS growth and double-digit organic top-line growth.
- Given these strong results, their team remains confident in a solid full-year result with exceptional revenue growth.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
