In today’s briefing:
- Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- P N Gadgil Jewellers Pre-IPO Tearsheet
- Ace Hardware Indonesia (ACES IJ) – New Product Cycles and Formats
- Orion Holdings: Updated NAV, Higher Dividend Yield, and Exhuma Catalyst
- Kayou Pre-IPO – The Positives – Strong FY22 Growth
- Flower Foods: Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers
- Freshpet Inc.: Initiation Of Coverage – Healthy Expansion in North America & Europe And A Deep Analysis Of Its Business Strategy! – Major Drivers
- The Cocoa Saga Continues – Be Careful
Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- Today, cram school operator Riso Kyoiku (4714 JP) and 20% owner real estate developer Hulic Co Ltd (3003 JP) amended their Capital and Business Alliance agreement.
- Hulic will buy 25.5% of shares out in a Partial Offer at +43.5% vs last. Then post-tender, they will buy shares at last from the company to go to 51.%
- The founder will sell his 10%. The rest is interesting. It’s a high ROE high div stock. Some own it from higher. Pro-ration is tough to estimate. But we try.
Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Riso Kyoiku (4714 JP) announced a partial tender offer and third-party allotment with Hulic Co Ltd (3003 JP), the largest shareholder. Hulic aims to make Riso Kyoiku a consolidated subsidiary.
- The offer is for a maximum of 39.4 million shares (23.15% post-allotment ownership ratio) at JPY320 per share, a 46.8% premium to the undisturbed price (5 April).
- Irrevocable (from the founder and Chairman) represents a 9.26% post-allotment ownership ratio. The offer is light, but there is no minimum acceptance condition.
Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, Nippon Paper Industries (3863 JP).
- The one likely inclusion is therefore Ryohin Keikaku (7453 JP). But there is more fun afoot with Fast Retailing (9983 JP) and Tokyo Electron (8035 JP).
- The two stocks – of totally different sectors – interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns.
P N Gadgil Jewellers Pre-IPO Tearsheet
- P N Gadgil Jewellers (1742652D IN) is looking to raise up to US$132m in its upcoming India IPO. The deal will be run by Motilal Oswal, Nuvama and BOB Capital.
- P N Gadgil Jewellers (PNGJ from hereon) is an Indian organized jewellery player. According to Technopak, it is the second largest among prominent organized jewellery players in Maharashtra.
- Its product offerings include traditional jewellery for special occasions such as weddings, engagements and festivities and modern and jewellery designs for everyday wear purpose, in gold, diamond, silver and platinum.
Ace Hardware Indonesia (ACES IJ) – New Product Cycles and Formats
- Ace Hardware Indonesia (ACES IJ) results revealed a positive finish to 2023 and an optimistic outlook for 2024, with new store rollout and shorter promotion periods set to boost sales.
- ACES continues to roll out its new format stores and renovate existing stores with a positive result, with 20 stores expected to be renovated in 2024 and 15-20 new stores,
- The company has seen strong momentum in 2M2024 with +10% SSSG and remains confident about the outlook, with positive guidance for growth. Valuations remain attractive versus history.
Orion Holdings: Updated NAV, Higher Dividend Yield, and Exhuma Catalyst
- Our NAV valuation suggests implied market cap of 1 trillion won or NAV per share of 15,983 won which is 11% higher than current price.
- Orion Holdings has attractive dividend yields and payouts. The company’s dividend yield increased from 4.1% in 2021 to 4.6% in 2022 and 5.1% in 2023.
- The recent phenomenal performance of the movie Exhuma has resulted in a long-awaited revived positive sentiment on Showbox (which is 57.5% owned by Orion Holdings).
Kayou Pre-IPO – The Positives – Strong FY22 Growth
- Kayou is looking to raise up to US$500m in its upcoming HK IPO.
- Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product.
- In this note, we talk about the positive aspects of the deal.
Flower Foods: Highlighting the 4 Central Pillars of Its Growth Dynamics! – Major Drivers
- Flowers Foods continued to show resilience in a challenging consumer environment in the fourth quarter and full year of 2023.
- The company’s brands gained unit and dollar share for the first time since Q1 2022.
- Dave’s Killer Bread was particularly noteworthy, reaching $1 billion in retail sales and growing unit volume by 10%.
Freshpet Inc.: Initiation Of Coverage – Healthy Expansion in North America & Europe And A Deep Analysis Of Its Business Strategy! – Major Drivers
- Freshpet Inc. delivered robust performance for the fiscal year 2023 and the fourth quarter, notching a significant growth in net sales and improving profitability.
- The management believes the pet food company reached an inflection point in its journey towards becoming a profitable business in the fresh/frozen segment of the pet food market.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
The Cocoa Saga Continues – Be Careful
- Top Commodity Trader is Long Cocoa Pierre Andurand’s hedge fund bet on higher cocoa prices ahead of a massive surge last month, according to a Bloomberg article.
- Andurand said his firm expects cocoa-beans production globally to be down at least 18% on an annual basis, compared to most analysts’ expectations of 10-11%.
- “This means that we will finish the year with the lowest stocks-to-grinding ratio ever, and potentially run out of inventories late in the year,” he added.
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