In today’s briefing:
- Tohokushinsha (2329 JP) – 3D Investment Partners Proposes Take-Private
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (July 24)
- Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo
- Amer Sports IPO Lock-Up Expiry – PE Investor Might Look to Trim US$750m Stake
- GES: Snapping the Store: Summer Begins to Sizzle; Reiterate Buy, $37 PT
- Yeo Hiap Seng (YHS SP): Healthy Drinks, Thirsty Shareholders
- JAKK: 2Q Preview: Setting up for Success; Reiterate Buy Rating, $24 PT
- Canon Marketing (8060) – Finally Using Its Cash, But It Is Walking The Walk With No Talk Behind
Tohokushinsha (2329 JP) – 3D Investment Partners Proposes Take-Private
- 3D Investment Partners, known to be activist-ish-y, purchased 18% of Tohokushinsha Film (2329 JP) in the 12 months to March 2024. They started a public activism campaign in February.
- The company has started down a better governance track, but now 3D has made a takeover proposal to Tohokushinsha, which will consider it under Special Committee.
- There are a couple of possible outcomes here which are interesting to consider. There are no other spoilers possible except those friendly to founders and management.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (July 24)
- BYD (1211 HK) shares had a breakout relative to the MSCI China index and showing good momentum during the low volume days of summer.
- POWER ASSETS HOLDINGS (6 HK) has shown a breakout relative to MSCI Hong Kong with a defensive business and 5%+ dividend yield.
- WH GROUP (288 HK) has also shown a breakout relative to the MSCI Hong Kong after its announcement of the spinoff of Smithfield Foods in the US.
Shinsung Tongsang: Tender Offer Fails and How to Take Away Customers From Uniqlo
- Shinsung Tongsang shares rose 10% to 2,510 won today after it was announced that the tender offer failed. Basically, the tender offer failed because the tender offer price was too low.
- Only 26% of the 31.664 million shares responded to the tender offer. Accordingly, the shareholding ratio of Chairman Yeom and his related parties increased from 77.98% to 83.88%.
- Top Ten has benefited from executing its strategy well (such as employing Lee Na-Young in advertisements to grab customers from Uniqlo). Overall, we remain positive on Shinsung Tongsang.
Amer Sports IPO Lock-Up Expiry – PE Investor Might Look to Trim US$750m Stake
- Amer Sports (AS US) raised around US$1.3bn in its US IPO in Feb 2024, after pricing its IPO below its initial range.
- Amer Sports is a sports and outdoor brands company making clothing and other sporting equipment for use in snow sports, running, climbing, baseball, american football, tennis and other sports.
- In this note, we talk about the upcoming lock-up expiry and deal dynamics.
GES: Snapping the Store: Summer Begins to Sizzle; Reiterate Buy, $37 PT
- We are reiterating our Buy rating, $37 price target and projections for Guess?
- after visiting stores in Long Island and the Metropolitan New York City area.
- With the return of hot and humid weather, we believe Guess?
Yeo Hiap Seng (YHS SP): Healthy Drinks, Thirsty Shareholders
- Yeo Hiap Seng(YHS SP) , known for its Yeo’s brand of Asian/health drinks, trades near its 52-week low at SGD 0.55, despite having financial assets and cash worth SGD 0.44/share.
- With limited guidance on reinvestment/growth opportunities and management’s stance against returning cash to shareholders, the stock trades around dividend yield, now at 3.6%.
- Over the past decade, the stock has lost 75% of its value, and management must take decisive actions to enhance long-term shareholder value.
JAKK: 2Q Preview: Setting up for Success; Reiterate Buy Rating, $24 PT
- We are reiterating our Buy rating, projections and $24 price target for JAKKS Pacific with the company announcing 2Q24 (June) results after the close on Wednesday.
- While we do not expect, nor have we projected, a strong 2Q, we do believe management will be upbeat on a number of key fronts, including: 1) Cleaning up inventory levels in anticipation of Holiday strength and new launches; 2) gearing up for more normalized Halloween costume demand; 3) initial launches for The Simpsons lines to key domestic and international retailers; 4) progress on the international expansion front; 5) the initial shipments for the Authentic Brands partnership and 6) potential demand for Moana 2 and Sonic the Hedgehog 3 Holiday movies.
- Further, we expect the balance sheet has remained debt free, cash rich and management will provide an update on potential return to shareholders.
Canon Marketing (8060) – Finally Using Its Cash, But It Is Walking The Walk With No Talk Behind
- Today after the close, Canon Marketing Japan (8060 JP) announced a large Tender Offer Buyback from its parent company Canon Inc (7751 JP). Canon will tender 20mm shares (15.42%).
- This is a very capital efficient way to conduct a buyback from a parent, and an even better way for a parent to sell shares of a sub.
- This corporate action will reduce equity by 20%, and partially clean up the messy inter-company transactions which should not exist.
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