In today’s briefing:
- 7&I (3382) Ito Family MBO – New Urgency for ACT
- Asics (7936) | Upgraded Targets on Fashion Pivot
- Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected
- Trip.com (9961.HK, TCOM): 3Q24, Still Healthy, But Stock Price Exceeded Our Last Target
- The Beat Ideas: EFC(I) Limited – The Indian Wework!
- Buy the Pullback Again; S&P 500, Nasdaq 100, Russell 2000 Testing Confluence of Support
- Disney’s Secret Weapons: How Streaming
- CJ Cheiljedang: Considering a Potential Sale of Its Bio Business
- Warren Buffett’s Domino’s Pizza Deal: The Possible Strategy Behind The Recent $550 Million Investment! – Major Drivers
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – November 2024
7&I (3382) Ito Family MBO – New Urgency for ACT
- Days ago we got a dramatic headline about Ito family scion ITO Junro and his family company Ito Kogyo making a bid for Seven & I Holdings (3382 JP).
- The stock popped, then fell. Details were not clear. Was the ¥9trln an EV number? A market cap? Was he serious? How would he get funding. Skepticism was rife.
- Today we get more headlines from NHK. who says the family wants to raise ¥8trln to take 7&i private by end-Feb 2025.
Asics (7936) | Upgraded Targets on Fashion Pivot
- ASICS has demonstrated exceptional brand rejuvenation and profitability improvements, with an ambitious 2026 plan that capitalizes on high-growth lifestyle categories
- However, the pivot toward fashion and luxury markets introduces heightened execution risk.
- While the upgraded MTP targets are commendable, much of the good news appears to be priced in.
Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
- In this insight, we take a look at our updated flow expectations.
Trip.com (9961.HK, TCOM): 3Q24, Still Healthy, But Stock Price Exceeded Our Last Target
- The stock has risen by 38% since our last buy rate.
- The 3Q24 results are still healthy – both growth rate and operating margin.
- We set a downside of 19% for the end of 2025.
The Beat Ideas: EFC(I) Limited – The Indian Wework!
- EFCI Ltd (EFCIL IN) is one of few companies in the Flex Space Operator Business present in the entire value chain providing an unbeatable edge in Cost competitiveness.
- Management target is to double revenue in FY25 capitalising on sector tailwinds driving exponential growth in all business verticals.
- Completed Backward Integration through manufacturing furniture which will help increase margins as furniture comprise 40-50% of total fitout cost.
Buy the Pullback Again; S&P 500, Nasdaq 100, Russell 2000 Testing Confluence of Support
- Our outlook remains bullish following the S&P 500’s multi-month base breakout above 5670, alongside healthy market dynamics which have continued to improve.
- Two weeks ago, our election day report (11/5/24) was titled “Buy the Pullback,” and with the SPX/QQQ/IWM pulling back to their 20-day MAs, it’s time to buy the pullback again.
- We continue to expect significant upside into year-end and early 2025, and we expect support at the 20-day MAs on the aforementioned indexes (though support at 50-day MAs is possible).
Disney’s Secret Weapons: How Streaming
- The Walt Disney Company’s recent fourth-quarter and full-year 2024 financial results provided a comprehensive overview of both the progress and challenges faced by the company.
- CEO Bob Iger highlighted the company’s strategic positioning for growth, emphasizing their momentum as a result of specific strategies across various business segments.
- However, the commentary also reveals nuances in their operational dynamics and future outlook.
CJ Cheiljedang: Considering a Potential Sale of Its Bio Business
- CJ Cheiljedang announced that it is considering on potentially selling its bio business for about 5-6 trillion won which could be more than its market cap.
- CJ Cheiljedang’s bio business is expected to have more than 4 trillion won in sales and about 700 billion won in EBITDA in 2024.
- We are positive on the company’s efforts to sell its Bio Business and reinvest it in its food business.
Warren Buffett’s Domino’s Pizza Deal: The Possible Strategy Behind The Recent $550 Million Investment! – Major Drivers
- The recent earnings call for Domino’s Pizza highlighted several key aspects of its financial performance, strategic initiatives, and market dynamics, revealing both promising areas and challenges.
- The company’s Hungry for MORE strategy appears to be yielding positive results domestically, but international markets face significant hurdles.
- Domestically, Domino’s Pizza has successfully leveraged its value-focused Hungry for MORE strategy.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – November 2024
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
- We provide updates on the Q3 results for the Philippines picks and our management meeting on our recent trip to Hong Kong.
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