In today’s briefing:
- Tassal: Cooke Increases Its Stake to 10.49%
- Beneunder Pre-IPO – The Positives – Basking in the Sun
- Cocoaland’s Court Meeting on 18 August, IA’s Opinion
- Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction
- Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan
- Faraday Future’s Proxy Fight Intensifies: $100M Financing Offer Ignored
- CENTEL : Expect CENTEL to Make Profit in 2Q22
- Beneunder Pre-IPO – The Negatives – Doubts Remain, Including Related Party Dealings
- Philip Morris/Swedish Match: Trading Tight to Terms
- Sirius XM Holdings Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks & ESG Assessment (07/2022)
Tassal: Cooke Increases Its Stake to 10.49%
- On 19 July, Cooke, the spurned suitor, increased its stake in Tassal (TGR AU) to 10.49%. The average price to build the 10.49% stake is A$4.14 per share.
- Cooke also hired Phil Wiese, the former CEO of Huon Aquaculture (HUO AU), as a MD in Canada. Mr Wiese is well qualified to run Tassal should Cooke acquire it.
- With shareholders happy to sell to Cooke despite the Board’s assertions that the previous bid undervalued Tassal, a new offer will force the Board to engage.
Beneunder Pre-IPO – The Positives – Basking in the Sun
- Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
- According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare.
- In this note, we will talk about the positive aspects of the deal.
Cocoaland’s Court Meeting on 18 August, IA’s Opinion
- The independent advisor considers Fraser & Neave Holdings (FNH MK)‘s RM1.50 offer for Cocoaland Holdings (COLA MK) fair as it falls within its valuation range of RM1.21-1.66 per share.
- The key conditions are the headcount test and <10% rejection from all disinterested shareholders. The shareholder with a blocking stake has provided an irrevocable.
- We continue to think that offer is attractive. At the last close and for the end of October payment date, the gross and annualised spread is 1.4% and 4.8%, respectively.
Netflix 2Q22: Low Growth, Low FCF, Low (Management) Conviction
- Netflix’s quarter was modestly better than reset bearish expectations…but not by much. 1M subscriber gains projected for 3Q below consensus 1.7M.
- Timeline for reaccelerating subscriber growth from advertising and password sharing still seems shockingly long.
- Netflix remains a top funding short for the forseeable future, we think $210 is the high end of the range, $170 the low end, but could justify $150.
Uni President Enterprises: Positive Catalyst from Additional Stake Purchase of Carrefour Taiwan
- Uni President Enterprises and President Chain Store Corp (an affiliate of Uni-President Group) have agreed to acquire a controlling 60% stake ownership of Carrefour Taiwan from Carrefour SA (CA FP).
- We believe the acquisition of the additional 49.5% stake in Carrefour Taiwan is likely to have a positive impact on Uni President Enterprises (1216 TT).
- Uni President Enterprises is trading at P/S multiple of 0.77x so the acquisition multiple of 0.6x would be slightly lower than Uni President Enterprises’ current valuation multiple.
Faraday Future’s Proxy Fight Intensifies: $100M Financing Offer Ignored
- The proxy fight between Faraday’s founder and its Board has heated up further, with the founder making two 13D filings to the Board in just 3 days.
- The founder wants to replace a certain Board member with a candidate of his choice and said he has third party investors willing to inject $100M+ if the Board agrees.
- The Board never replied and this shows how tight the cash crunch at Faraday has become. Q2 cash should come to only $60M, or roughly 1 month of operations.
CENTEL : Expect CENTEL to Make Profit in 2Q22
- Maintain BUY recommendation for CENTEL with a target price of Bt49.0. We expect the company performance to turn a profit at Bt57m in 2Q22 from Bt44m loss in 1Q22
- Strong recovery in hospitality business. We expect hotel revenue to hit nine quarter high at Bt1.4bn thanks to impressive performance for Thai hotels as RevPar for Bangkok and Upcountry hotels
- Food revenue is expected to hit 11 quarter high at Bt2.9bn (+24%YoY+11%QoQ) as we anticipate continuing SSSG at 6.1% compared with 0% and 10% in 2Q21 and 1Q22 respectively.
Beneunder Pre-IPO – The Negatives – Doubts Remain, Including Related Party Dealings
- Beneunder Limited (BL) aims to raise around US$500m in its Hong Kong IPO.
- According to CIC, it was the largest sunprotection apparel brand in China in terms of both total retail sales value and online retail sales value with 5.0% and 12.9% marketshare.
- In this note, we will talk about the not-so-positive aspects of the deal.
Philip Morris/Swedish Match: Trading Tight to Terms
- Since Bloomberg reported that Elliot is amassing a stake, the shares have traded tight to terms, even rebasing the offer price. Uncertainty is growing around the deal.
- The squeeze-out threshold is 90%, and reaching it seems increasingly difficult, in spite of a generous premium. Philip Morris could lower the acceptance threshold and/or extend the offer period.
- My DCF valuation is SEK 113.17, potentially a 13% upside, although it would be difficult to twist Philip Morris’s arm. I’d still be long just under the offer price.
Sirius XM Holdings Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks & ESG Assessment (07/2022)
- Sirius XM Holdings is one of the largest subscription-based satellite radio broadcasting companies in the U.S.
- The company also has a music streaming service called as Pandora which competes with the likes of Apple Music and Spotify.
- Sirius XM Holdings has been performing well since the start of 2022 with growth in subscription and advertising revenue, as well as strong cash flow generation to use for investments in the company.
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