In today’s briefing:
- Takashimaya and H2O Cancel Tie-Up
- Sumber Alfaria Trijaya (AMRT IJ) – Lawson Taking Up the Reins of Convenience
- Green Lawson: More Eco and Avatars
- An Update to the Long-Short Pair Trade on Hyundai Motor & Tesla
- Royal Caribbean Cruises Ltd.: Initiation of Coverage – Business Recovery & Key Developments
- Royal Caribbean Cruises Ltd.: Detailed Credit Analysis & Financial Strength Evaluation Report
- XXXLutz Consortium/Home24: Additional Acceptance Period
- The Mosaic Company: Detailed Credit Analysis & Financial Strength Evaluation Report
Takashimaya and H2O Cancel Tie-Up
- Takashimaya and H2O Retailing entered what felt like a forced engagement of convenience in 2008 when all their other competitors were busy merging.
- Although discussions for a full merger were held, in truth, thea agreement was more about practical collaboration to create more efficiencies.
- With both firms now more secure and cross-shareholdings more problematic, they will sell off their equity in each other but continue to work on joint projects.
Sumber Alfaria Trijaya (AMRT IJ) – Lawson Taking Up the Reins of Convenience
- Sumber Alfaria Trijaya through its Alfamart and Alfamidi formats is one of the largest mini-market operators in Indonesia but is now expanding aggressively into the convenience store space through Lawson.
- The company should have a strong finish to the year with an additional 1,200-1,300 new stores being added over the period plus margins improving as Alfamart adds new services.
- Sumber Alfaria Trijaya is a core proxy to the winning mini-market format in Indonesia plus it is looking to replicate its success in the Philippines in Collaboration with SM Investments.
Green Lawson: More Eco and Avatars
- Lawson introduced a new store format in Tokyo last month called Green Lawson, touting new ways to save energy and reduce waste.
- The new store also features an early version of a retail advertising system that emulates Familymart Vision.
- The latest updates emphasise the continued investment by the big three convenience stores to remain relevant and improve sales efficiency while also countering the labour shortage.
An Update to the Long-Short Pair Trade on Hyundai Motor & Tesla
- In this insight, we provide an update to our long-short pair trade of Hyundai Motor (long) and Tesla Motors (short), which we presented back in June 2022.
- Since 9 June 2022, Hyundai Motor’s share price is down 13.4% and Tesla’s share price is down 48.6% in the same period, resulting in net gains of 35.2%.
- We discuss five major factors impacting Tesla’s share price this year including market share losses, Musk’s acquisition of Twitter, valuation multiples decline, China operations, and global recessionary fears in 2023.
Royal Caribbean Cruises Ltd.: Initiation of Coverage – Business Recovery & Key Developments
- This is our first report on Royal Caribbean Cruises, a well-known player operating three cruise vacation brands, including Royal Caribbean International, Celebrity Cruises and Silversea Cruises.
- Royal Caribbean Cruises has seen strong demand, fighting off inflation, and continues to focus on its value proposition of providing the best-quality vacations in the world.
- We initiate coverage on the stock of Royal Caribbean Cruises with a ‘Hold’ rating.
Royal Caribbean Cruises Ltd.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Royal Caribbean Cruises is a renowned cruise player operating three cruise vacation brands, namely Royal Caribbean International, Celebrity Cruises and Silversea Cruises.
- The company has seen a strong recovery post the pandemic and its recent results have been strong.
- The good news is that Royal Caribbean Cruises has seen strong demand, fighting off inflation, and continues to focus on its value proposition of providing the best-quality vacations in the world.
XXXLutz Consortium/Home24: Additional Acceptance Period
- XXXLutz consortium secures 80.94% of home24 shares. The Additional Acceptance Period runs until 28 December. More shares will be tendered and delisting will eventually take place in 2023, in my view.
- My updated fair value estimate is €7.44/share (average of DCF and comparables, as per the tables below), just 0.8% below the offer price, hence my TP remains unchanged at €7.50.
- Gross spread is 0.93%. The risk of being stranded with a delisted stock encourages tendering at €7.50.
The Mosaic Company: Detailed Credit Analysis & Financial Strength Evaluation Report
- The Mosaic Company is one of the major producers and marketers of concentrated phosphate and potash crop nutrients.
- The company’s business has been impacted by the ongoing inflation and supply chain issues and has been reducing its production off-late.
- Besides, the weather in the U.S. prevented spring planting, and the short planting window limited nutrient treatments.
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