In today’s briefing:
- Sep22 FTSE EPRA Nareit Index Rebalance – Big Impact on Sekisui House (1928 JP)
- Kadokawa – Investments From Sony and Tencent
- Leapmotor Pre-IPO – Thoughts on Valuation
- Raccoon: Maintaining COVID Momentum
- TBO Tek Pre-IPO – Recovery Underway Post-COVID
- Colgate-Palmolive: New Acquisitions For Supporting Pet Nutrition & Other Drivers
Sep22 FTSE EPRA Nareit Index Rebalance – Big Impact on Sekisui House (1928 JP)
- Yesterday FTSE Russell announced two Asian additions to its FTSE EPRA Nareit Global Developed Index – Sekisui House (1928 JP) and Healthcare & Medical Investment Corporation (3455 JP).
- Sekisui House is larger cap, and will see big dollars added. H&M IC is much smaller and will see less, but has had a huge run-up, outright and relative.
- Trading impact will be significant on both tickers in terms of days of ADV.
Kadokawa – Investments From Sony and Tencent
- Kadokawa announced yesterday that subsidiary From Software would conduct a third-party allocation of shares to Sony and Tencent.
- The allotment values From Software at about ¥120bn with Tencent acquiring 16.25% and Sony acquiring 14.09% of the company.
- This creates opportunities for both Sony and Tencent and likely puts Kadokawa on track to eventually be acquired though timing may be somewhat later than we had anticipated.
Leapmotor Pre-IPO – Thoughts on Valuation
- Leapmotor (LM) aims to raise around US$1.5bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
- As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
- In our previous note, we spoke about the company’s past performance, PHIP updates and undertook a peer comparison. In this note, we will talk about valuations.
Raccoon: Maintaining COVID Momentum
- While its peers in Japanese e-commerce are losing momentum, Tokyo-listed B2B e-commerce company, Raccoon Holdings, Inc. (3031 JP) continues to march forward from the COVID elevated levels.
- With the advertising cost no longer growing at the same rate as before, we expect around 60% upside to Raccoon’s FY+2 consensus OP of ¥1.6bn.
- This would put Raccoon on 9.5x FY+2 OP with an OP CAGR of close to 50% and seems reasonably cheap in our opinion.
TBO Tek Pre-IPO – Recovery Underway Post-COVID
- TBO Tek (0395045D IN) is looking to raise approximately US$285m in its upcoming India IPO.
- TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
- The firm’s profitability recovery is underway post-COVID. However, the implied take rate of its largest revenue contributor (Hotel and Ancillary) appears to be declining despite the overall increase in GTV.
Colgate-Palmolive: New Acquisitions For Supporting Pet Nutrition & Other Drivers
- Colgate-Palmolive had a splendid quarter and surged past Wall Street expectations on all counts by delivering growth over all of its categories as well as its divisions.
- The company has built up its innovation capabilities to deliver more transformational innovation and breakthroughs that can drive both market share and category market.
- Organic sales growth has been seen in four of its categories Home Care, Personal Care, Pet Nutrition, and Oral Care.
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