In today’s briefing:
- Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- [JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
- Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS
- Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- [Alibaba (BABA US, BUY, TP US$120) Earnings Review]: Progress Made, Better Times Ahead
- FineToday Pre-IPO – The Positives – Established Brands Across Multiple Regions
- NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- ₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End
- Tesla’s Big Bet: Why Trump’s Autonomous Push Could Supercharge Their Future!
- Honda Faces Profit Crunch: Rising Costs vs. Ambitious EV Plans! – Major Drivers
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
- Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
- Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
- The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.
[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
- I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
- Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
- Fat div. Lots of volume to buy in the next several months, but the big story is future measures.
Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS
- Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
- There are major areas of growth, both territorially and new offshoot businesses. Seven is already 32% more efficient than Lawson but more to come.
- Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
- Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
- The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
- The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.
[Alibaba (BABA US, BUY, TP US$120) Earnings Review]: Progress Made, Better Times Ahead
- BABA reported CY3Q24 top line, adjusted EBITA and non-GAAP net profit (1.0%), (1.6%) and in-line vs. consensus.
- CMR improved amid monetization changes that narrowed the growth gap with GMV, but also eliminated some low-single profit sellers from its GMV.
- Cloud and overseas e-commerce revenue also saw good growth and improved profitability. All of BABA’s key businesses are sputtering to life while macro tailwinds are also favorable.
FineToday Pre-IPO – The Positives – Established Brands Across Multiple Regions
- CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
- FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
- In this note, we talk about the positive aspects of the deal.
NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
- There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
- If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
- The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.
₩200B Gov-Run Value-Up Fund Starts Buying Tomorrow, with Another ₩300B Set for Year-End
- The larger-than-expected Value-Up fund will drive passive flows surpassing the KRX 300 in both size and speed.
- Value-Up ETFs’ AUM is ₩636.5B, with retail dominating. Major institutions, like pensions, are on standby, but passive flows could hit ₩1.5T post-Dec 20 rebalancing.
- Single-Stock setups may not fit, but for alpha-seeking Value-Up strategies, focus on names with higher passive impact from the boosted AUM.
Tesla’s Big Bet: Why Trump’s Autonomous Push Could Supercharge Their Future!
- During Tesla’s third quarter of 2024 financial report, several key points emerged that provide an overview of the company’s performance and strategic direction.
- One of the prominent highlights was Tesla’s achievement of record deliveries in a market experiencing overall industry declines.
- This emphasizes Tesla’s ability to navigate a challenging automotive landscape, an important consideration for investors assessing the company’s resilience and market positioning.
Honda Faces Profit Crunch: Rising Costs vs. Ambitious EV Plans! – Major Drivers
- Honda Motor Co., Ltd.’s financial results for the first quarter of the fiscal year 2025 offer a complex picture of both achievements and challenges.
- The company reported its highest-ever quarterly operating profit of JPY 484.7 billion, marking a significant year-on-year increase by JPY 90.2 billion.
- This improvement was largely driven by increased unit sales in the motorcycle business in India and Brazil, as well as robust sales of hybrid automobile models in Japan and the United States.
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