In today’s briefing:
- TSI Holdings (3608) – New Year, New Buyback, Still Good, Still Cheap
- OASIS IPO Pricing Is Not Even Worth Reviewing: Strongly Recommend Avoiding It
- Kingston Financial’s (1031 HK) Vote on 9 February
- Fu Shou Yuan (1448 HK): Latest Mortality Rate Supports Long-Term Outlook
- Fast Retailing: Growth Markets Look Weak & Uniqlo Japan Profitability Affected By Rising Wages
- Kingston Financial (1031 HK): 9th Feb Scheme Vote. IFA Says Fair
- Oasis Corporation IPO – Sole Profitable Player but Maybe Not for Long
TSI Holdings (3608) – New Year, New Buyback, Still Good, Still Cheap
- Last April I wrote about Tsi Holdings (3608 JP) which was trading at 0.5x EV/EBITDA and where I suggested it could double in 2-3yrs.
- The day after I wrote, the stock closed at ¥312/share, briefly touched ¥480 before ending the year at ¥444. On Friday they announced Q3 earnings, now TTM EV/EBITDA is 2.5x.
- They also announced a buyback, and the stock is up further. It is worth looking into the details both near-term and what they mean longer-term.
OASIS IPO Pricing Is Not Even Worth Reviewing: Strongly Recommend Avoiding It
- Of the four peers, only Coupang adopts the gross method. Since the others adopt the net method, it is impossible to compare PSR with OASIS, which uses the gross method.
- If they really want to use PSR, it should only be compared with Coupang. Even if we apply CPNG’s current EV/Sales multiple (1.36x), it would only slightly exceed ₩0.5T.
- A more logical way would be to use EV/GMV. Even in this case, it wouldn’t be easy to expect a valuation higher than ₩0.5T.
Kingston Financial’s (1031 HK) Vote on 9 February
- The Kingston Financial (1031 HK) scheme document is out with the scheme meeting scheduled for 9 February. The IFA considers the offer to be fair and reasonable.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and the headcount test. No shareholder holds a blocking stake.
- Peer re-rating increases the headcount test risk. At the last close and for the 10 March payment, the gross and annualised spread is 5.3% and 42.2%, respectively.
Fu Shou Yuan (1448 HK): Latest Mortality Rate Supports Long-Term Outlook
- China recorded 270,000 increases in deaths in 2022 to 10.41m (+2.7% YoY, vs. flat in 2020). This is a sad demographic trend but favourable to Fu Shou Yuan (1448 HK).
- Death rate of 0.74% has returned to the 1974 level. With termination of “zero COVID” policy, this is poised to increase. This will also stimulate demand for its pre-need services.
- Despite a 73% rebound in share price from trough, valuation is still undemanding at 14.4x FY23F PER. This implies a 35% discount to the average of 22x since 2013.
Fast Retailing: Growth Markets Look Weak & Uniqlo Japan Profitability Affected By Rising Wages
- Fast Retailing (9983 JP)’s 1QFY23 results were below consensus estimates with OP missing consensus by 13.2%.
- The outlook for the rest of the year doesn’t seem too well either with Domestic profitability held back by rising wages and growth markets affected by slowing demand for apparel.
- Even though China could emerge from COVID to boost Uniqlo’s profits, we see significant downside risk to Fast Retailing’s FY23 guidance.
Kingston Financial (1031 HK): 9th Feb Scheme Vote. IFA Says Fair
- The Scheme Booklet is now out and Kingston Financial (1031 HK)‘s shareholders can vote on Chu Yuet Wah’s Offer on the 9 February.
- The Cancellation price of HK$0.30/share was a 47.78% premium to the undisturbed prices. It will not be increased.
- Currently trading at a gross/annualised spread of 5.3%/44.4%, assuming payment on the 10 March.
Oasis Corporation IPO – Sole Profitable Player but Maybe Not for Long
- OASIS Corp (1799513D KS) is looking to raise up to US$166m in its upcoming Korea IPO.
- Oasis Corporation is an early morning delivery service business that delivers fresh food to consumers. It runs an e-commerce platform named ‘Oasis Market’ as well as offline stores.
- Oasis Corporation aims to boost its sales and presence by further improving on its omnichannel strategy. However, its explosive growth appears likely to have been driven by COVID-induced lockdown measures.
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