In today’s briefing:
- Aeon (8267) Wants To Buy a Bigger Stake in Tsuruha (3391); What Does Tsuruha Want?
- Benesse (9783) – Tender Offer To Launch; No Change in Terms (¥2,600/Share)
- Timing of Double Dividends Opportunities in Korea
- Astra International (ASII IJ) – Opportunity Knocks
- Quiddity Leaderboard T50/100 Mar 24: Bizlink TDIV Deletion in the Money!
- Korea: Stocks with Near-Term Potential Passive Flows
- Benesse Holdings (9783 JP): EQT-Backed MBO Offer Unchanged at JPY2,600
- Mixue Pre-IPO: Reliable Price Advantage – An On-The-Ground Viewpoint
- Emart: Double Catalysts Of “Open on Sundays” + Focus on Low P/B Stocks
- Ola Electric Pre-IPO – The Positives – India’s Answer to Tesla?
Aeon (8267) Wants To Buy a Bigger Stake in Tsuruha (3391); What Does Tsuruha Want?
- Aeon Co Ltd (8267 JP) owns 13% of Tsuruha Holdings (3391 JP). Oasis owns 13% too. Oasis ran a governance campaign but lost last summer’s AGM. Aeon supported Tsuruha.
- Tsuruha shares popped in November when Tsuruha said it was looking at its strategic options. BBG reported PE firms were circling. Now Aeon wants to buy Oasis’ stake.
- That would put Aeon in a near-blocking position without consolidating. And it would mean minorities stayed minorities. The real question is whether this is what Tsuruha wants.
Benesse (9783) – Tender Offer To Launch; No Change in Terms (¥2,600/Share)
- The “MBO” for Benesse traded through terms from the 6th day post-announcement onwards. 37% total traded since announcement, 20% since that 6th day.
- The deal as announced 10 November was entirely too cheap. It was somewhat egregious if you look through the balance sheet. Plus there was a free museum on top.
- But to no avail. There is no bump. There have been no activists peeping above the parapet (yet). It isn’t impossible to block, but if nobody shows their face…
Timing of Double Dividends Opportunities in Korea
- The change in the dividend payment system in Korea in 2024 is likely to result in some attractive “double dividends” opportunities.
- According to the Korea Exchange, there are seven stocks that have changed their dividend record dates policy last year and also that pay quarterly dividends.
- Hyundai Motor (005380 KS) (common) provides a dividend yield of 5.8% and Hyundai Motor (005385 KS) (pref) provides a dividend yield of 9.6% at current prices.
Astra International (ASII IJ) – Opportunity Knocks
- Astra International has seen an aggressive sell-off on fears of increasing competition from the EV space as more operators enter the Indonesian auto market, with the most recent being BYD.
- The company has successfully held its market share at 56% in FY2023 and has launched several EV models, mostly hybrids, as adoption levels for BEVs remain low.
- Management remains confident that FY2024 will be a stable year for both 2W and 4W, with overall EPS only set to decline slightly but valuations are now compelling.
Quiddity Leaderboard T50/100 Mar 24: Bizlink TDIV Deletion in the Money!
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 index rebal event.
- I expect one change for the T50 index and two other changes for the T100 index.
- One of the T100 changes also has implications for the TDIV index flows in March 2024.
Korea: Stocks with Near-Term Potential Passive Flows
- There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
- There could be buying in EcoPro Materials and Hanjin KAL while Hotel Shilla, Pearl Abyss, F&F, Hyundai Mipo Dockyard, Hanon Systems and Jyp Entertainment could be sold.
- There will be a lot of flow on the stocks and passive trackers will need to trade over 7 days of ADV in most stocks.
Benesse Holdings (9783 JP): EQT-Backed MBO Offer Unchanged at JPY2,600
- Benesse Holdings (9783 JP) notes that the pre-condition for EQT-backed MBO has been satisfied. The offer price remains unchanged at JPY2,600 per share, a 45.1% premium to the undisturbed price.
- EQT has noted a possibility of extending the tender offer close from 4 to 13 March, which suggests a limited appetite to bump the offer.
- The shares are trading 1.3% above terms. A 51% minority acceptance rate and no competing bidder indicate an unfavourable risk/reward profile – a 27% downside on deal break.
Mixue Pre-IPO: Reliable Price Advantage – An On-The-Ground Viewpoint
- We believe Mixue’s low prices are fit for the current weak economy.
- Any “freshly made” price lower than Mixue’s will compete with bottled drinks.
- We also believe low rental is the key for Mixue’s low prices.
Emart: Double Catalysts Of “Open on Sundays” + Focus on Low P/B Stocks
- E Mart Inc (139480 KS) has been a strong outperformer this year (up 5.6% YTD) versus KOSPI which is down 5.8% in the same period.
- We expect E Mart to outperform the market in the rest of 2024 driven by two major factors including “open on Sundays” policy and focus on low P/B stocks.
- E Mart is trading at P/B of 0.2x versus Coupang which is trading at P/B of 8.3x. E Mart is more attractive than Coupang, especially considering the recent catalysts.
Ola Electric Pre-IPO – The Positives – India’s Answer to Tesla?
- Ola Electric is looking to raise about US$1bn in its upcoming India IPO.
- Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
- In this note, we talk about the positive aspects of the deal.
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