In today’s briefing:
- Prosus: The More Things Change…
- Weekly Deals Digest (30 Jul) – L’Occitane, Dali, Eoflow, Toshiba, Pacific Current, Estia
- Astra International (ASII IJ) – Increasingly Omnipresent
- Dali Foods (3799 HK): 23 August Scheme Meeting. IFA Says Fair
- Kenvue (KVUE US): Q2 Result Beats Estimates; Initiated 2023 Guidance; J&J Launches Exchange Offer
- [Nayuki (2150 HK, BUY, TP HK$9.3) TP Change]: Store Operating Profit Margin Improvement On-Track
- Archer-Daniels-Midland Company: Catering To The Rising Demand For Health Products! – Key Drivers
- Monthly Chinese Tourism Tracker | Outbound: Mixed Signals | Domestic: Steady | (July 2023)
- Coca-Cola Company: Are They Winning The Gen Z Market? – Key Drivers
- Kimberly-Clark Corporation: Winning the Race in Key Markets Worldwide? – Major Drivers
Prosus: The More Things Change…
- Prosus looks to continue to cut its stake in Tencent by 2-3% every year to fund its open-ended share buyback program.
- Evidence would suggest that the buyback is set to continue at a relatively steady pace for the foreseeable future, which should support the discount to NAV going forward.
- The simplification of the shareholding structure, to remove the cross-holding, could sustainably reduce Prosus’ discount to NAV by roughly 10%.
Weekly Deals Digest (30 Jul) – L’Occitane, Dali, Eoflow, Toshiba, Pacific Current, Estia
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Rakuten Securities (RAKUSEC JP), EbixCash (EBIXC IN), Lalatech Holdings Co Ltd (LALA HK) and Lianlian DigiTech (2104619D CH) IPOs.
- Event-Driven developments – Eoflow (294090 KS), Dali Foods Group (3799 HK), L’Occitane (973 HK), Toshiba Corp (6502 JP), Pacific Current (PAC AU), Estia Health (EHE AU).
Astra International (ASII IJ) – Increasingly Omnipresent
- Astra International (ASII IJ) released a solid set of numbers in 1H2023, with growth across most of its divisions from autos to heavy equipment, and infrastructure.
- 1H2023 was marked by a series of acquisitions across growth areas of the Indonesian economy including nickel, digital health, data centres, and classifieds.
- Astra International remains our top proxy pick for exposure to Indonesia, with recent acquisitions making the company all the relevant in new areas of growth.
Dali Foods (3799 HK): 23 August Scheme Meeting. IFA Says Fair
- Back on the 27 June, Dali Foods Group (3799 HK), announced a privatisation Offer by way of a Scheme from its founder/chairman/CEO Xu Shihui.
- The cancellation price, which has been declared final, was HK$3.75/share, a decent 37.87% premium to undisturbed.
- The Scheme Doc is now out. The Scheme Meeting is the 23 August. Xu and concert parties control 88.89%, therefore a blocking stake is 1.11% of shares out.
Kenvue (KVUE US): Q2 Result Beats Estimates; Initiated 2023 Guidance; J&J Launches Exchange Offer
- Kenvue (KVUE US) reported 5% YoY revenue growth to $4B in 2Q23, driven by continued demand of self-care portfolio, mainly consisting of cough, cold, and allergy, and pain care products.
- The company has guided for 4.5–5.5% revenue growth and EPS of $1.26–1.31 for 2023. Kenvue has declared a cash dividend of $0.20 for 3Q23.
- J&J is offering its shareholders the option to exchange shares for Kenvue’s at a 7% discount. The exchange offer is scheduled to close on August 18, 2023.
[Nayuki (2150 HK, BUY, TP HK$9.3) TP Change]: Store Operating Profit Margin Improvement On-Track
- Our 1H23 revenue estimate is 8.7% lower than consensus, and we expect 1H23 NPM at breakeven vs. consensus at 5%。
- Mainly because teahouse brands in China had suffered the intensified competition from the price war in Coffee industry.
- We maintain the stock as BUY rating as the margin improvement process is gradual showing effect, while we lower TP by US$2 to US$9.3 to reflect the intensified competition pressure.
Archer-Daniels-Midland Company: Catering To The Rising Demand For Health Products! – Key Drivers
- Archer-Daniels-Midland delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in earnings.
- The company reported second-quarter adjusted earnings per share of $1.89 and an adjusted segment operating profit of $1.6 billion.
- ADM’s team expects continued strength in Brazil’s origination, solid biofuel demand, and resilient food demand, leading them to raise their earnings expectations for 2023.
Monthly Chinese Tourism Tracker | Outbound: Mixed Signals | Domestic: Steady | (July 2023)
- We see decidedly mixed signals in Chinese outbound tourism numbers from June
- Meanwhile, the modest pace of the recovery in domestic air traffic continued last month
- What to look for in Q2/H1 earnings results over the next several weeks
Coca-Cola Company: Are They Winning The Gen Z Market? – Key Drivers
- Coca-Cola delivered an all-around beat in the most recent quarter results.
- Despite geopolitical tensions and the elevation in global inflation, Coca-Cola delivered 11% organic revenue growth.
- Plant-based beverages, value-added dairy, and juice have delivered double-digit top-line growth and also gained both volume share and volume.
Kimberly-Clark Corporation: Winning the Race in Key Markets Worldwide? – Major Drivers
- Kimberly-Clark delivered mixed results for the previous quarter, with revenues below analyst expectations but managed an earnings beat.
- The company delivered strong organic growth across all segments.
- Significant progress was made on margin recovery, leading to increased adjusted gross margin, operating profit, and earnings per share.
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