Daily Brief Consumer: Seven & I Holdings, Midea Group, Mercari , Hyundai Motor India , Swiggy, Bukalapak.com PT Tbk, Oisix ra daichi, Sanathan Textiles, Playtika Holding Corp and more

• This AM, partway through the morning session, Bloomberg carried an article saying Alimentation Couche-Tard (ATD CN) had upped its bid for Seven & I Holdings (3382 JP) to US$18.19/share.
• The stock popped, then faded sharply. Near and after the close we got more headlines. Some of these preview tomorrow’s earnings report. Some preview the restructuring announcements.
• The Nikkei comment regarding an earnings shortfall vs Plan suggests weaker US convenience store sales and consumer footfall are to blame. Details will matter. But I’d buy dips.

• In response to media reports, Seven & I Holdings (3382 JP) confirmed receiving a revised non-binding proposal from Alimentation Couche-Tard (ATD CN). 
• The rumoured revised offer is US$18.19, a 22.4% premium to the initial US$14.86 offer. The revised terms are attractive vs precedent transactions and analyst price targets.
• The Board would cite regulatory concerns and the revised offer’s implied discount compared to peer multiples. At tomorrow’s results, the Board must present a credible alternative value generation path.

• There were only 13 new listings on the Main Board of the HKEX (388 HK) in the third quarter of the year.
• Of those stocks, we only see Midea Group (300 HK) having a chance of being added to the HSCI in December.
• Midea Group (300 HK) should be added to Southbound Stock Connect next week after the price stabilisation period has ended.

• Mercari is a Japanese e-commerce company known for operating the leading online used goods marketplace in Japan with over 23 million monthly active users and significant annual GMV.
• The company’s strong network effects moat and growth prospects in Japan’s second-hand goods market suggest substantial potential value, despite investor frustration with loss-making initiatives like Mercari US and its Fintech segment.
• Analysts believe that Mercari Japan alone is worth nearly double the company’s current market cap, highlighting potential for significant upside.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• After 3 years of strong revenue and profits growth, Hyundai Motor India is likely to face a challenging year ahead based on the analysis of 1QFY2025 financials provided in RHP.
• Hyundai Motor India (1342Z IN)‘s  strong exports growth in FY2025 will not offset the weakness in domestic sales. This could result in low single-digit revenue growth for the year.
• Increased royalty costs starting in FY2025, coupled with impact of lower cash reserves after special dividend paid out to parent will likely compress profit margins compared to the previous year.

• Swiggy Limited is planning to raise around US$1.25bn through its upcoming India IPO.
• Swiggy Limited (Swiggy) is a business to commerce (B2C) marketplace company offering users a platform for ordering grocery and household items (Instamart) and food delivery, through its on-demand delivery network.
• In this note, we talk about the positive aspects of the deal.

• Bukalapak (BUKA IJ) has seen a sharp share price rebound recently with speculation over a tie up with Temu, which appears ill-founded, with the only newsflow being a Director resigning.
• The company swung back into a slight negative adjusted EBITDA in 2Q2024, mainly due to the seasonal impact of Lebaran on its O2O business and increased competition in virtual products.
• Bukalapak remains a differentiated player in Indonesian e-commerce with a focus on serving MSMEs through its marketplace, with increasing take rates ahead. Dealing with excess cash is a potential catalyst. 

• Oisix is planning to double its sales by 2030 and looks set to reach this targets early through both organic expansion and M&A.
• The recent acquisition of several B2B and other companies will help sales grow 72% this year alone.
• But the longer-term consumer-facing business continues to look positive thanks to continued demand for convenience meal kits and home delivery of quality foods. Profit though remains anaemic.

• Sanathan Textiles (0907479D IN) plans to re-appear for its IPO. The company is into yarn manufacturing and has a presence in all three, Polyester, Cotton and Technical Textiles segments. 
• Revenue growth did light up in FY22, however topline growth has pretty much been stale since then. Moreover, margins have also been on a sliding trajectory.
• Key forensic takeaways include capitalising of expenses on the back of falling margins, acquisition of a non-operating subsidiary from promoters, secondary income sources driving profits, etc.

• Playtika Holding Corp. conducted its Q2 2024 earnings call outlining both advancements and some challenges faced during the quarter.
• With Robert Antokol, Co-Founder and CEO, and Craig Abrahams, CFO, leading the discussion, the company detailed various aspects of its operational and strategic performance which will be crucial for stakeholders evaluating Playtika’s investment potential.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.