In today’s briefing:
- Yamaha (7951): Making Waves Again
- An Overlooked Passive Flow Potential for the Korea Index: Foreign Listing Materiality
- China Resources Beverage (Holdings) Pre-IPO Tearsheet
- High Conviction 2024 – CyberAgent: Strong Recovery in Gaming While Media Biz Reports Profits
- Challenges in Using Cash, Even in Companies with 30%+ Female Board Members, with Excellent Practices
- LVMH Remains Committed to China Even Amid Sluggish Sales
Yamaha (7951): Making Waves Again
- Yamaha releases new guidance on May 8 for its fiscal year ending March 2025. The previous Mid-term plan for OP was ¥68bn, while the consensus is looking for just ¥40.9bn.
- We expect ¥50bn, and think the shares are as much as 30% undervalued.
- Analysts have responded to multiple downward revisions to current year guidance, driven by collapsing Piano sales to China, but haven’t responded to cost cutting or growth in other product lines.
An Overlooked Passive Flow Potential for the Korea Index: Foreign Listing Materiality
- With the rise in Coupang’s market cap, it’s imperative to evaluate if the Korea Index can attain eligibility to include foreign-listed companies.
- Coupang’s 45% YTD surge nears a $41B market cap, with a 65% free-float rate equating to $27B. Yet, to meet Korea Index eligibility, an additional $23B is needed.
- Aside from Coupang, more companies are preparing for overseas listings. Also, potential stock price increases for Coupang should be considered. The combined market cap approaches the US$50B threshold.
China Resources Beverage (Holdings) Pre-IPO Tearsheet
- China Resources Beverage (Holdings) Company Limited is looking to raise US$1bn in its upcoming Hong Kong IPO. The bookrunners on the deal are BofA, BOCI, Citic, and UBS.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
- According CIC, it was the second largest company in the packaged drinking water market in China and the largest company in the purified drinking water market in 2023.
High Conviction 2024 – CyberAgent: Strong Recovery in Gaming While Media Biz Reports Profits
- CyberAgent Inc (4751 JP) reported 2QFY09/2024 results yesterday which shows further improvement across all three segments. Both 2Q revenue and OP beat consensus estimates, with OP by a huge margin.
- Newly released game titles have helped further recovery in Gaming business while Media segment reported its first-ever OP since the company began investing on AbemaTV.
- As we continue to reiterate, the worst is over for CyberAgent (CA) and we remain positive over the company’s growth prospects.
Challenges in Using Cash, Even in Companies with 30%+ Female Board Members, with Excellent Practices
- The two groups with the highest percentages of female board members (companies with over 30% and 20%-30%) are consistent with the characteristics of companies in which overseas investors primarily invest.
- Companies with over 30% female board members show superior values in many of Board Practices and Key Actions evaluation items. This may be due to improved engagement by overseas investors.
- Companies with no female board members have the lowest values in most Corporate Governance Practices items. Therefore, percentage of female board members indicates the seriousness of improving corporate governance practices.
LVMH Remains Committed to China Even Amid Sluggish Sales
- LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall, according to Chief Financial Officer Jean-Jacques Guiony.
- The world’s largest luxury goods group is looking to attract more Chinese shoppers amid a broader slowdown in demand for expensive bags, jewelry, and perfume.
- Many consumers have been making their purchases outside of China, especially in Japan, where the yen is weak, the French conglomerate disclosed in its 2024 first-quarter earnings released last week.
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