In today’s briefing:
- Ryohin Keikaku: Beat On The Cards, Big Moves To Follow
- Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications
- Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About
- AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations
- JD Health (6618.HK) – Some Positive Updates in Business
Ryohin Keikaku: Beat On The Cards, Big Moves To Follow
- Ryohin Keikaku (7453 JP) rose 24% following an earnings beat in the previous quarter. However, the share price progression afterwards was less than we anticipated.
- Our analysis points to one more big earnings beat as consensus is still conservative on cost assumptions.
- We think Ryohin Keikaku could take another big stride towards our target price following 1QFY23 results, due on the first week of January 2023.
Mandatory Offer Arrives in Korea: Detailed Rules & Trading Ramifications
- The target is those who purchase 25% or more of the shares of a listed company and become the largest shareholder with management rights.
- The minimum volume of a mandatory offer is [(50% of total shares + 1 share) – the management right purchase volume].
- We will be exposed to pro-rata risk, so it will be essential to figure out the nature and propensity of the shareholder composition to estimate the tendering rate in advance.
Sula Vineyards IPO Trading – Not a Whole Lot to Cheer About
- Sula Vineyards raised around US$117m in its India IPO, although demand wasn’t all that great.
- Sula Vineyards (SV) distributes wines under a bouquet of brands. In addition to its flagship brand “Sula,” popular brands include “RASA,” “Dindori”, “The source,” “Satori”, “Madera” & “Dia”.
- We have looked at various aspects of the deal in our previous notes. In this note, we will talk about demand and trading dynamics.
AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations
- Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.
- One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.
- Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.
JD Health (6618.HK) – Some Positive Updates in Business
- JD Health (6618 HK) is on the right track in terms of business model and investment logic. The Company has also begun to enter a virtuous circle in financial performance.
- There were some positive business updates in term of To B business in 22Q1-Q3, which would bring JD Health closer to establishing a complete “retail pharmacy + healthcare service” ecosystem.
- For trading strategy, at present, considering the complex external environment, we recommend investors to do short-term trade, rather than long-term hold.
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