In today’s briefing:
- Couche-Tard Execs in Tokyo, “Hoping” For Meetings But Really There To Hold a Press Conference
- CR Beverage IPO: Forecasts and Valuation
- Intermestic IPO Trading – Drew a Strong Institutional Demand
- Hiday Hidaka (7611 JP): Initial Report
- No Disruption in Quarterly Disclosure Review, but a Few Companies Disclosed CF Statements in 1Q & 3Q
- Betterware de Mexico Sab de CV – 3Q Preview: Managing Through; Reiterate Buy, $22.50 PT
- Actinver Research – Kimberly-Clark de Mexico: 3Q24 margin contraction as expected
Couche-Tard Execs in Tokyo, “Hoping” For Meetings But Really There To Hold a Press Conference
- Alimentation Couche-Tard (ATD CN)‘s CEO, former CEO, CFO, and founder were in Tokyo today giving a press conference about their trip and designs on Seven & I Holdings (3382 JP).
- There was some passive-aggressive behaviour. Their bid was better than 7&i’s plan. They said it was a high price. They said they wanted to meet management, the ITOs, the government.
- None of that will win the hearts and minds of the Special Committee.
CR Beverage IPO: Forecasts and Valuation
- China Resources Beverage (2460 HK) plans to raise US$650m at the upper end of the indicative IPO price range at a market capitalisation and EV of HK$34bn and HK$27bn respectively.
- Though the company has a strong business model and fundamentals, the packaged drinking water market is intensely competitive creating a price war and dragging down growth rates.
- CR Beverage is less diversified and has inferior margins compared to Nongfu Spring (9633 HK) , hence priced at a deep discount to its peer, making the IPO pricing attractive.
Intermestic IPO Trading – Drew a Strong Institutional Demand
- Intermestic (262A JP) raised around US$120m in its Japan IPO.
- Intermestic is an eyewear manufacturer of eyeglasses and eyeglass accessories in Japan.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.
Hiday Hidaka (7611 JP): Initial Report
- In FY02/24, revenue was JPY48.8bn (+27.8% YoY), operating profit was JPY4.6bn (+653.2% YoY), recurring profit was JPY4.8bn (+92.5% YoY), and net income was JPY3.2bn (+112.8% YoY).
- The company attributed YoY revenue growth to the following factors.
- First, customer count continued to grow after the March 2023 price hike.
No Disruption in Quarterly Disclosure Review, but a Few Companies Disclosed CF Statements in 1Q & 3Q
- The number of days to disclose first- and third-quarter financial results was 37.0 days, roughly the same timing as the previous year, regardless of whether reviews were conducted or not.
- The larger market capitalization companies are more likely to conduct voluntary reviews, and the larger market capitalization companies are more positive about ensuring the reliability of their disclosure information.
- Despite a slight increase from the previous year, only a little more than 10% of all companies disclosed cash flow statements in the first and third quarters.
Betterware de Mexico Sab de CV – 3Q Preview: Managing Through; Reiterate Buy, $22.50 PT
- We are reiterating our Buy rating, projections and $22.50 price target for Betterware de Mexico with the company reporting 3Q24 (September) results after the close on Thursday.
- Although we believe 3Q results, especially at the Betterware division, were impacted by foreign exchange (“FX”) issues, we believe the company has continued to make material progress, with all divisions registering YoY top line growth.
- Further, we believe management will reiterate 2024 annual guidance, as the company has been able to drive further expansion at JAFRA and we believe they have begun to respond to FX shifts by raising pricing at Betterware.
Actinver Research – Kimberly-Clark de Mexico: 3Q24 margin contraction as expected
- Revenues of P$13.2bn were driven by growth across all segments.
- Consolidated sales growth of 3.8% YoY was driven by Consumer and Away from Home (1% and 2%, respectively, yet below our estimates), while Exports surprised to the upside with a 25% YoY increase, driven by FX headwinds and hard roll sales.
- Margins were mostly better than our cautious estimates, with EBITDA margin reaching 26.3%, still a YoY and QoQ contraction.
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