In today’s briefing:
- Slater & Gordon (SGH AU): Allegro’s Opening Salvo
- Pinduoduo: Entering the Big League
- Carsharing Startup GetGo Bags US$15M to Bring 10K Greener Vehicles into SG by 2030
- Descente Puts on Some Pace
- Chinese Regulators Question Auto Supplier Over Next-Generation Battery Claims
- More Important to Keep Prime Market Quality High, Not to Give to Listed Companies a Grace Period
- Matahari Department Store (LPPF IJ) – Multiple Fashionable Levers for Growth in 2023
- Best & Less Group Holdings Ltd – Growth off the FY23 Base Not Dependent on Sales Growth
Slater & Gordon (SGH AU): Allegro’s Opening Salvo
- Beleaguered law firm Slater & Gordon (SGH AU) has announced an A$0.55/share cash off-market Offer from Aussie PE outfit Allegro.
- The key condition is Allegro acquiring a a 50.1% interest. This condition may be waived.
- The Offer was more than welcome by S&G’s board. “We don’t belong on the stock exchange,” said CEO John Somerville.
Pinduoduo: Entering the Big League
- Investor interest in Pinduoduo (PDD US) has surged, hitting record-high levels of fund ownership this month.
- Over the period from the recent lows in March 2022 to today, Pinduoduo’s +20% increase in the percentage of funds invested was the highest across all stocks in China.
- New positions from JSS All China (+7.49%) and Tamaq China Champions (+4.99%) were complemented by increased weights from China Fund (+5.35%) and GAM China Evolution (+5.26%).
Carsharing Startup GetGo Bags US$15M to Bring 10K Greener Vehicles into SG by 2030
- Singapore-based carsharing platform GetGo Technologies has secured an SGD20 million (US$15 million) investment from Treïs, a family-backed investment group.
- This will enable GetGo to accelerate the growth of its electric fleet with a target of 10,000 greener vehicles by 2030 and to strengthen its technology and operational platform.
- GetGo cars are typically used to take children and the elderly to activities, to go out with family and friends, or to transport bulky items.
Descente Puts on Some Pace
- Descente has improved profitability since being taken over by Itochu three years ago but much of the growth has come from overseas.
- The Descente brand remains weak in Japan but Itochu has plans to rebuild the eponymous label by splitting it into two while creating several new brands.
- The plans should help recover momentum in Japan and drive further expansion in China and even into Europe and the US.
Chinese Regulators Question Auto Supplier Over Next-Generation Battery Claims
- China’s securities regulator is investigating auto component supplier Nanjing Aolian AE&EA Co. Ltd. (300585.SZ -3.76%) after its stock price fell more than 30% this week when questions arose about its expertise in a key solar panel technology.
- The China Securities Regulatory Commission (CSRC) has started scrutinizing the firm on suspicion of providing false information to the public about its new business, according to a note that Nanjing Aolian received Thursday night.
- The investigation added to doubts about the company’s expertise in perovskite batteries at a time when it is defending itself from a separate regulatory inquiry into whether it took advantage of market interest in the technology to inflate its stock price.
More Important to Keep Prime Market Quality High, Not to Give to Listed Companies a Grace Period
- The “transitional measures” were set to expire in 3 years. For companies currently subject to the transitional measures, this will end in March 2025 for companies with March fiscal year-end.
- Many companies applying the transitional measures that are currently allowed to list on the Prime Market are expected to move to the Standard Market.
- Listed companies should take the opportunity to carefully consider these listing costs and benefits, as higher practices in corporate governance and disclosure will be required in the future.
Matahari Department Store (LPPF IJ) – Multiple Fashionable Levers for Growth in 2023
- Matahari Department Store (LPPF IJ) continued to benefit from positive consumer sentiment at year-end after faltering in October, driving a solid finish to the year and decent annual growth.
- The company has resumed its store rollout for FY2023 with 12-15 new stores planned plus a new premium format, and the company’s omnichannel strategy achieving strong results.
- Matahari has rebranded itself and improved its merchandise mix with a push towards millennials and more affluent consumers. Valuations are attractive, with the added support of a 10% dividend yield.
Best & Less Group Holdings Ltd – Growth off the FY23 Base Not Dependent on Sales Growth
- Best & Less (ASX:BST) is a leading ‘value apparel speciality retailer’ with a particular focus in baby and kids wear (~50% of revenue).
- The group has 245 stores under the Best & Less brand in Australia (183 stores) and Postie brand in New Zealand (61 stores).
- As an apparel based omni-channel retailer the cycling of lockdowns and a wet/cold beginning to the FY23 summer period impacted both like store sales and resulting gross margins due to clearance activity.
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