In today’s briefing:
- Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes
- Aeon: Making Omnichannel a Reality
- Chipotle Mexican Grill: Major Drivers
- XXXLutz Consortium/Home24: Rescue Takeover
- China Internet Weekly (31Oct2022): Alibaba, Tencent, Meituan, Kuaishou, S.F.
- Ford Motors: Major Drivers
- General Motors: Upgraded Ecosystem For EVs & Other Drivers
- Kimberly-Clark Corporation: New Facility For Feminine Care & Other Drivers
Fengxiang (9977 HK): PAG’s Unconditional MGO And Proposed Delisting
- PAG Capital has won the judicial auction to acquire 70.92% of Shandong Fengxiang (9977 HK).
- The acquisition remains subject to regulatory clearance (including SAMR). Once greenlit, PAG will be required to make an unconditional Offer for the H-shares at HK$1.5132/share.
- Separately, it is PAG’s intention to delist Fengxiang which involves Scheme-like delisting resolutions.
MSCI Korea IR: Market Cap Cutoff, NOC, & Constituent Changes
- The NOC of MSCI Korea Standard is 111, and the market cap of the 111th-ranked company is ₩2.44T on Day 1 and ₩2.40T on Day 2.
- In addition to Hyundai Mipo, Ecopro passed the screening. On the other hand, only Meritz Securities and CJ ENM managed to stay inside the safe zone among the deletion candidates.
- The recently increased price fluctuations likely resulted in delaying the entry timing of flow trading. So, we should set the expected return of our basket trade a bit more aggressively.
Aeon: Making Omnichannel a Reality
- In search of ¥1 trillion in ‘digital-related’ sales by 2026, Aeon opened its first, built-from-scratch online-offline marketing store in Yokohama this month.
- The new Aeon SC introduces a range of features and processes to make e-commerce a natural supplement to the store and the shopping experience.
- Aeon has a way to go to reach its targets for e-commerce but is moving in the right direction and has a clearer direction than rival, Seven & I.
Chipotle Mexican Grill: Major Drivers
- Chipotle Mexican Grill delivered a mixed set of results.
- In the quarter, Chipotle continues to view broadening trends by the income levels with the consumers with lower income reducing frequency.
- We provide the stock of Chipotle Mexican Grill with a ‘Hold’ rating and a revision in the target price.
XXXLutz Consortium/Home24: Rescue Takeover
- An XXXLutz-led consortium offers €7.50/share in cash, 124% premium, c. 29.6x EV/Fwd NTM EBITDA and 1.4x P/NTM BV. With already 68.7% irrevocable undertakings secured, this looks a done deal.
- FY2021 ROIC was -12%, home24 destroyed value as it grew; some willing buyers attended the call to steady the ship. Considering prospects, the offer looks fair (my TP is €7.85).
- Gross spread is 0.54%, and the estimated annual return is 3.01% assuming settlement by 5 January. I would accept offer/set up a position in case of share price weakness.
China Internet Weekly (31Oct2022): Alibaba, Tencent, Meituan, Kuaishou, S.F.
- In 3Q22, S. F. Holdings’s revenue grew by 45% YoY and net profit increased by 89% YoY.
- Alibaba resumed its link on Kuaishou’s live streaming sales before Singles’ Day.
- Tencent denied the rumor that it would be acquired by China Mobile.
Ford Motors: Major Drivers
- Ford’s stock has seen some recovery off-late despite a mixed result for the third quarter.
- The company surpassed the revenue expectations of Wall Street but missed out on earnings and ended up with nearly $50 billion in liquidity.
- The only silver lining in the quarter was Ford Credit which delivered another healthy quarter with an EBT of $600 million.
General Motors: Upgraded Ecosystem For EVs & Other Drivers
- General Motors has seen a sharp recovery in its stock price after the company demonstrated its ability to deliver robust results while managing multiple headwinds and executing its growth strategies.
- GM delivered an all-around beat in its latest result as it translated improved supply chain performance into a solid full-size SUV sales leadership with a strong pricing mix.
- We provide the stock of General Motors with a ‘Hold’ rating and a revision in the target price.
Kimberly-Clark Corporation: New Facility For Feminine Care & Other Drivers
- Kimberly-Clark had a mediocre performance in its recent results.
- The company surpassed the revenue expectations of Wall Street but missed out on earnings given the ongoing volatility in operating environment that continues to pressure the operating margin and the overall bottom-line.
- We provide the stock of Kimberly-Clark with a ‘Hold’ rating and a revision in the target price.
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