In today’s briefing:
- USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50%
- MDL Wholesale Pre-IPO – IPO Redux
- Nikon (7731) | Eyeing the Future? Nikon and Essilor’s Partnership in AR
- HK-Listed Apparel & Footwear Screener: Attractive Yield & Rapid Expansion Outside China – Oct 2024
- WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade
- Cash Converters International – Growth and value
- Portfolio Update: September 2024
- Ola Electric: Price-Cut Gamble, Social Media Blunders, Slipping Sales – Is the Spark Fading?
- Hyundai Motor India Pre-IPO – Index Inclusion Won’t Have Near-Term Impact
- USS Placement – Buyback and Decent Momentum Will Aid Dynamics
USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50%
- Ubiquitous used car auction house USS Co Ltd (4732 JP) today announced MUFJ Bank’s Retirement Benefit Trust account would sell its 3.5% stake in an offering.
- Given how much cash the company has and how little cross-holding there is, this seems a bit odd, but they are doing a buyback for half the offer.
- Small offer. Low ADV count. Well-liked by numerous foreign active holders. This should get taken easily.
MDL Wholesale Pre-IPO – IPO Redux
- MDL Wholesale Limited is looking to raise about US$100m in its upcoming Hong Kong IPO.
- MDL is a leading food and FMCG distribution solution provider in China.
- In this note, we look at the firm’s past performance.
Nikon (7731) | Eyeing the Future? Nikon and Essilor’s Partnership in AR
- Essilor’s investment underscores Nikon’s undervalued potential, spotlighting its advanced optical technologies as strategic growth drivers in emerging high-tech sectors like AR.
- Nikon’s established expertise in precision optics is highly adaptable for AR applications, positioning the company to capitalize on rising demand for wearable and immersive technology.
- Increased collaboration with EssilorLuxottica may enhance Nikon’s R&D capabilities, promising new innovations and potential revenue streams, which could strengthen Nikon’s profitability and share value long-term.
HK-Listed Apparel & Footwear Screener: Attractive Yield & Rapid Expansion Outside China – Oct 2024
- The HK market is moving, and the share prices of high-yield companies are increasing. Despite the average YTD returns of 36%, stocks are trading at 5-18% dividend yields.
- We await the November results of Pacific Textiles (1382 HK), which we will soon initiate coverage on.
- We note that Yue Yuen Industrial Holdings (551 HK) continues with its buybacks, having repurchased 3.2 million shares (0.2% of outstanding shares) since August 28th, 2024.
WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade
- The WisdomTree Emerging Markets ex-State-Owned Enterprises Index measures the performance of emerging markets stocks that are not state-owned enterprises.
- The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
- There are 154 adds and 80 deletes for the index with an estimated round-trip trade of US$300m.
Cash Converters International – Growth and value
- RaaS has published an update report on consumer finance group Cash Converters International (ASX:CCV) following the release of its FY24 results which saw 26% growth in revenue on the pcp and EBITDA growth of 21% in line with our forecasts.
- The gross loan book grew 6% to $288m, which we find impressive as the business transitions away from SACC products due to regulatory change.
- This was more than offset by growth in other products, domestically and internationally.
Portfolio Update: September 2024
- This month, I had the privilege of attending an investment conference, where I engaged with many successful value investors and independent thinkers.
- During one conversation, an investor jokingly remarked that everyone seems to have shifted toward “quality growth investing,” while he and Mr. Robotti appear to be among the few who still favor cyclical stocks, such as Tidewater Inc.
- Although I don’t generally shy away from cyclical stocks, I recognize the immense challenge of navigating the capital cycle by investing in companies that seem on the brink of failure.
Ola Electric: Price-Cut Gamble, Social Media Blunders, Slipping Sales – Is the Spark Fading?
- Ola Electric (OLAELEC IN)‘s aggressive price cuts on its S1 scooter aim to fend off competition and boost sales but risk alienating existing customers and damaging brand perception.
- Ola Electric’s mishandling of online criticism—capped by its CEO’s heated spat with a well-known comedian—has tarnished the brand’s image.
- With market share and stock prices dropping, concerns loom over how the company will fare after lock-up expiry in November/February and whether it will qualify for global index inclusion.
Hyundai Motor India Pre-IPO – Index Inclusion Won’t Have Near-Term Impact
- Hyundai Motor (005385 KS) is looking to raise around US$3.3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
- HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
- In our previous notes, we have looked at the company’s past performance and provided our thoughts on valuations. In this note, we talk about index inclusion.
USS Placement – Buyback and Decent Momentum Will Aid Dynamics
- Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in USS Co Ltd (4732 JP).
- While the deal appears somewhat well flagged, given that its part of the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
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