In today’s briefing:
- Oisix-Shida Stoush with SHiDAX Suggests Strong but Subtle Strategy
- Toridoll – Bull Run Can Stretch Much Longer
- Honda Sets Up New Venture to Procure Batteries From CATL
- East Ventures Leads $26m Round of Indonesian Agritech Firm
- Vietnamese D2C Apparel E-Commerce Startup Coolmate Banks US$2.3M, Plans IPO in 2025
- Tarjay: Legendary Retailer on Markdown
- LULU: Revisiting Lululemon
- Lululemon Athletica: Expansion In Spain & Other Drivers
- Ross Stores: New Store Additions & Other Drivers
- Gap Inc: New Experience Centre & Other Updates
Oisix-Shida Stoush with SHiDAX Suggests Strong but Subtle Strategy
- Shidax Corp (4837 JP) is a food service business in the midst of a so-far reasonably successful restructuring. The family had a partner in Unison and hoped to extend.
- The founding family and Unison now have ~60% together, and they vote together. Unison wants out. The family wants Oisix ra daichi (3182 JP) in. So Oisix has tendered.
- But SHiDAX sees the conflict and minorities getting hosed. So they object. The “easy” solution is a full MBO with Oisix support.
Toridoll – Bull Run Can Stretch Much Longer
- TORIDOLL Holdings Corporation (3397 JP) is trading near the historical peak of ¥3,000 per share which translates to a consensus FY+2 EV/OP of 30.9x.
- We think the stock has more room to run as its OP margin is expected to reach double digits for the first time since FY13.
- Meanwhile, there could be an upside to FY23 guidance as it is currently based on an exchange rate of ¥116 per $1.0.
Honda Sets Up New Venture to Procure Batteries From CATL
- Honda Motor Co. Ltd.’s Chinese unit will set up a new joint venture with two Chinese partners to procure electric vehicle batteries from battery giant Contemporary Amperex Technology Co. Ltd. (CATL)
- The joint venture will be 50% owned by Honda Motor (China) Investment Co. Ltd. and 25% each by Dongfeng Motor Corp. Ltd. and Guangzhou Automobile Group Co. Ltd. (GAC)
- Honda’s joint ventures with Dongfeng and Guangzhou Automobile already use CATL batteries in electric cars made in China
East Ventures Leads $26m Round of Indonesian Agritech Firm
- Gokomodo, an Indonesia-based agriculture supply chain platform, said it earned US$26 million in a series A round led by East Ventures.
- Gokomodo is a B2B startup that offers digital procurement, digital commerce, and distribution services.
- Its clients also have the option of buying competitive products through the company’s ecommerce storefront.
Vietnamese D2C Apparel E-Commerce Startup Coolmate Banks US$2.3M, Plans IPO in 2025
- Coolmate says it has tripled its revenue over the past year and is on track to hit the US$19 million revenue milestone in 2022.
- As Vietnam’s e-commerce is expanding quickly and the country’s robust textile and garment industries are transforming through more consolidated value chains, Coolmate will utilise the new capital to achieve its 2022 sales target and plan for an IPO in 2025.
- Founded in early 2019, Coolmate employs the D2C e-commerce model (providing products directly through online channels) to cut the distribution costs in traditional retail.
Tarjay: Legendary Retailer on Markdown
- Summary: Resilience and Growth Through Turmoil, Asymmetric Opportunity Today
- Target TGT 4.54%↑ has been a highly controversial retailer for years.
- Recall that in 2007, Bill Ackman’s Pershing Square invested in the business, ultimately building a 10% stake and launching an activist campaign to get on the board and force a sale-leaseback of Target’s extraordinarily valuable real estate.
LULU: Revisiting Lululemon
- The last time I penned my thoughts about Lululemon was December 2021 during a period when the core business shined and Lulu’s Mirror acquisition began to show the early signs of wilting in the face of declining demand.
- I was grateful that management’s commentary implied they would avoid throwing everything at an attempt to make Mirror, a business which comprised <3% of Lulu’s revenue at the time, work.
- They have since repurposed the business into a two-tiered subscription offering, branded under the parent’s more reputable name.
Lululemon Athletica: Expansion In Spain & Other Drivers
- Throughout the second quarter, Lululemon’s momentum remained strong.
- The company’s total revenue accelerated by 29% compared to last year and 28% on a 3-year CAGR basis, helping the company surpass Wall Street expectations.
- It has been benefitting heavily from this launch as hiking has become increasingly popular among visitors since the pandemic.
Ross Stores: New Store Additions & Other Drivers
- Ross Stores had quite a disappointing quarter where its revenues were well below Wall Street expectations.
- Comparable store sales were low in comparison to a strong increase in the second quarter of the last year.
- We provide the stock of Ross Stores with a ‘Hold’ rating with a revision in the market price.
Gap Inc: New Experience Centre & Other Updates
- Gap saw a decline in its overall revenues in the past quarter but its results were still above analyst expectations.
- The company’s overall revenues of $3.86 billion were down 8% from the prior year or 7% when measured in constant currency but it did deliver an earnings beat.
- Further, they anticipate the near-term downturn in demand at Gap outlets, which they attribute to the persistent backlash from lower-income consumers.
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