In today’s briefing:
- Rakuten (4755 JP): The Current Playbook
- Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle
- Quiddity Leaderboard SE600 Jun 23: Credit Suisse Deletion Imminent; Multiple Changes in June
- CCL Products (India) Ltd- Forensic Analysis
- Silk Laser: EC Healthcare’s Superior Counter
- Aeon: All Signs Point to Higher Returns
- The Estee Lauder Companies Inc.: Retail Sales in Global Travel Retail
- Mondelez International Inc.: Strategic Focus on Chocolates
- CVS Health Corporation: Does The Signify Acquisition Make It A Sureshot Buy? – Key Drivers
Rakuten (4755 JP): The Current Playbook
- Since the announcement of the placement, Rakuten (4755 JP)’s shares are down -15.7% from the undisturbed price of JPY707 per share (12 May prior to press reports of the placement).
- To understand how the shares will trade as the offer is launched, we think it is instructive to look at recent large Japanese placements. Pricing date is likely 24 May.
- So far, Rakuten’s shares have mostly followed the pattern of previous large placements. Investors participating in previous large Japanese placements tend to secure positive returns.
Silk Laser Australia (SLA AU): David Vs Goliath Bidding Battle
- Silk Laser Australia (SLA AU) disclosed a non-binding indicative offer from EC Healthcare (2138 HK) at A$3.35 per share, a 6.3% premium to Wesfarmers Ltd (WES AU)’s offer of A$3.15.
- The Board has concluded that EC Healthcare’s offer is superior. Wesfarmers has matching rights which expire on 30 May.
- Wesfarmers has the balance sheet and synergies to bump its offer. However, it is uncertain if EC Healthcare can engage in a bidding war due to a modest balance sheet.
Quiddity Leaderboard SE600 Jun 23: Credit Suisse Deletion Imminent; Multiple Changes in June
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the STX Europe 600 and EUROSTX Indices for the June 2023 Rebalance.
- I currently expect Credit Suisse (CSGN SW) and Mediclinic International (MDC LN) to be deleted in the next few trading days
- Separately, there could be five ADDs and DELs during the regular review in June 2023.
CCL Products (India) Ltd- Forensic Analysis
- CCL Products India (CCLP IN) is a coffee manufacturing company and has presence in both India and abroad.
- The company has seen an appealing growth in its top-line, growing at a three year CAGR of 22% till F23.
- However, when it comes to the forensics, there are several concerns, especially with its treatment of investment in subsidiaries and disclosures in the financials.
Silk Laser: EC Healthcare’s Superior Counter
- Back 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).
- Wesfarmers was granted 30 business days to undertake due diligence on an exclusive basis. Ahead of that expiry, EC Healthcare (2138 HK) has crashed the party with a $3.35/share NBIO.
- Silk’s board considers ECH’s proposal to be superior. Wesfarmers has five business days to respond. I expect they will.
Aeon: All Signs Point to Higher Returns
- Aeon just announced record revenues of more than ¥9 trillion for FY2022.
- Its supermarkets, mall developments and drugstores continue to strengthen and even the GMS business had a good year even if it still a way to go to generate consistent profit.
- Meanwhile, Aeon plans to pour ¥150 billion a year into group-wide digital technologies, after launching the most advanced food online operation Japan has seen yet this month.
The Estee Lauder Companies Inc.: Retail Sales in Global Travel Retail
- Estee Lauder had a mixed quarter.
- Its organic net sales fell by 8% but its retail sales growth outpaced organic sales growth in numerous areas resulting in the company surpassing the revenue expectations of analysts.
- Encouragingly, retail sales performance in global travel retail is far ahead of organic sales results.
Mondelez International Inc.: Strategic Focus on Chocolates
- Mondelez International had a successful first quarter, with strong double-digit top-line growth driven by effective pricing and volume expansion.
- Mondelez’s momentum was evident across its entire business, with strong organic net revenue growth and adjusted gross profit dollar growth resulting in an all-around beat.
- Mondelez’s brand investments, portfolio reshaping initiatives, and talented workforce position the company for continued growth.
CVS Health Corporation: Does The Signify Acquisition Make It A Sureshot Buy? – Key Drivers
- CVS Health Corporation’s first quarter results were an all-around beat as the company performed well in terms of revenue growth, operating cash flow, and adjusted profits per share.
- Revenues for the first quarter of $85.3 billion were up 11% year over year, demonstrating significant growth in all of their businesses.
- However, the company anticipates decreases for the remainder of the year as the public health emergency ends.
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