In today’s briefing:
- The New FEFTA List (With 7&I (3382) As “Core”) Is Not a Big Hurdle for Couche-Tard
- Midea Group: Offer Upsized at Top Tier. Updated Valuation Analysis
- Pre-IPO Midea Group H Share – Here Are the Risks Behind
- ECM Weekly (16th Sep 2024) – Midea, Bajaj Housing, 99 Speed, P N Gadgil, Hozon, Trial, NextDC, Via
- Weekly Consumer Tales: Cross Border Comm Crisis-Midea Upsized-LG Elecs’ Upside-Platform Workers Law
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – September 2024
The New FEFTA List (With 7&I (3382) As “Core”) Is Not a Big Hurdle for Couche-Tard
- On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (Japanese, English) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)
- It appears 72 names were newly upgraded to “Core” (“3”), 21 newly listed companies (since the last list in Nov 2021) were labeled “3”, and six lost their Type3 designation.
- Seven & I Holdings (3382 JP) saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really.
Midea Group: Offer Upsized at Top Tier. Updated Valuation Analysis
- Midea Group(000333 CH) has increased the shares on offer in Hong Kong by 15% to 565.9 million shares, priced at the top end of the range at HKD54.8 per share.
- With strong investor interest, the company may exercise an over allotment option that could take the deal size to USD 4.6 billion.
- Midea’s Hong Kong pricing reflects a nearly 21% discount to its A-share closing price, compared to the average 33% discount for dual-listed companies between Hong Kong and Shanghai or Shenzhen.
Pre-IPO Midea Group H Share – Here Are the Risks Behind
- For the reasons why Midea is eager to IPO in HK, investors shouldn’t just look at the surface of its glory, but delve into the “real motives” behind capital operations.
- The policy of subsidizing the trade-in of home appliances belongs to “early overdraft of demand” and is unsustainable. Valuation logic for the performance increment brought by such policy is P/B.
- If Midea cannot achieve the expected breakthroughs in To B business or internationalization in 2025-2026 to hedge against the weak domestic business, Midea’s performance/valuation in following years would inevitable decline.
ECM Weekly (16th Sep 2024) – Midea, Bajaj Housing, 99 Speed, P N Gadgil, Hozon, Trial, NextDC, Via
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Midea Group Co Ltd A (000333 CH) hogged much of the limelight this week, although Bajaj Housing Finance (BHF IN) created some history as well.
- We covered the Nextdc Ltd (NXT AU) and Terumo Corp (4543 JP) placements and looked at the possible deals in Trial Holdings (5882 JP) and Via Technologies (2388 TT).
Weekly Consumer Tales: Cross Border Comm Crisis-Midea Upsized-LG Elecs’ Upside-Platform Workers Law
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- Temu, (owned by PDD US), and Shein might need to rethink their US strategies if a new rule stops overseas shipments of tariffed products from bypassing US customs duty.
- Singapore passed a groundbreaking law last week to protect gig workers. Other countries may follow suit and this could adversely impact margins. Take note: Meituan (3690 HK) , Zomato (ZOMATO IN)
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – September 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 update recent results for Philippines names and Uchi Technologies (UCHI MK), which recently declared earnings.
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