In today’s briefing:
- Yashili (1230 HK): Pre-Condition Finally to Be Satisfied?
- Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.
- Hong Kong CEO & Director Dealings (13 Feb): Koolearn, China Gas, MOG, Hua Yin, China Environmental
- Shiseido: Conservative Guidance Is Not a Cause for Concern as Shiseido Almost Always Overdelivers
- [Li Auto (LI US, BUY, TP US$40) Earnings Preview]: Riding Intact Model Cycle in 2023
- ABC Mart Rebounds in Weakened Sector but Watch Out for Workman
- Manchester United: Further Upside Potential On This Arbitrage Trade
- The Electric Dream
- Earlier Timing of Disclosure in English May Create Another Mismatch with Investor Demand
- How Attractive Is Coca-Cola’s Dividend As The Company Reports Full Year Results?
Yashili (1230 HK): Pre-Condition Finally to Be Satisfied?
- Yashili International Holdings (1230 HK) latest monthly update notes that Dumex Key Condition 2 is satisfied paving the way towards completing the Dumex China Disposal.
- The completion of the remaining pre-condition, the 25% Yashili acquisition, depends on the completion of the Dumex China Disposal, which now looks imminent.
- We think the pre-condition will be satisfied by the end of February and the scheme document will be despatched by early April. At the last close, the spread is 6.2%.
Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.
- Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November.
- The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn.
- Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play.
Hong Kong CEO & Director Dealings (13 Feb): Koolearn, China Gas, MOG, Hua Yin, China Environmental
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
- Stocks mentioned include Koolearn (1797 HK), China Gas Holdings (384 HK), MOG Holdings (1942 HK), Hua Yin International Holdings (989 HK), China Environmental Technology (646 HK).
Shiseido: Conservative Guidance Is Not a Cause for Concern as Shiseido Almost Always Overdelivers
- Shiseido Company (4911 JP)’s share price is down more than 4% today following a mixed 4Q22 with revenue missing consensus by 2.1% but OP beating by 31.7%.
- A lot of optimism was baked in the medium-term plan, but 2023 OP guidance (¥60.0bn) was ¥17.5bn below consensus expectations.
- Nevertheless, we think this shouldn’t worry investors too much as Shiseido has outperformed initial guidance by an average of ¥17.0bn over the past 3 years.
[Li Auto (LI US, BUY, TP US$40) Earnings Preview]: Riding Intact Model Cycle in 2023
- We expect Li Auto to report 4Q22 top line of RMB 17.5bn, in line with consensus, and recovered GPM of 21.8%, vs 12.7% in Q3.
- We reiterate Li Auto as our top pick, because of 1) positive growth outlook in 2023 driven by strong model cycle (L9/L8/L7);
- 2) margin upside in 2023 driven by improved product mix, sharing of auto parts among its product line up, and expanded scale economy; 3) less impacted by Tesla’s price war.
ABC Mart Rebounds in Weakened Sector but Watch Out for Workman
- Footwear sales plummeted during Covid, except for sports and hiking shoes, with a deleterious impact on all the big three retailers.
- While ABC Mart has recovered, Chiyoda and G-Foot continue to struggle, leaving the market wide open.
- Disruption is coming in the form of Workman but others might also see the opportunity.
Manchester United: Further Upside Potential On This Arbitrage Trade
- Manchester United saw takeover rumors and options activity. The bids have started arriving for this soccer club.
- The club has an easy 80%, but where is the top for bids? Click here for all the latest Manchester United transfer news.
- Click here to read Manchester United’s transfer news for the latest transfer news.
The Electric Dream
- Over a dozen companies focused on building out Electric Vehicles have gone public through a SPAC merger in the past two years, albeit with mixed results.
- Legendary Motorcycle Maker Harley Davidson shocked the public markets in 2021 when it announced that it was spinning off its EV segment LiveWire through a $1.8 billion SPAC merger.
- The move came as the legacy bike maker has faced a period of slowing sales, losing market share to competitors, and failing to reach younger first-time riders.
Earlier Timing of Disclosure in English May Create Another Mismatch with Investor Demand
- Regarding the three most in-demand documents, only 30-50% of companies with over 30% foreign ownership disclose them in English. The mismatch between overseas investors’ demand and companies’ disclosure continues.
- If TSE requires faster timing of disclosure in English, companies may limit the materials they disclose in English due to increased burden. Disclosing necessary materials is more important than timing.
- In order to encourage companies to disclose in English in their annual securities reports, the Corporate Governance Code should clearly state the disclosure in English in the annual securities report.
How Attractive Is Coca-Cola’s Dividend As The Company Reports Full Year Results?
- Coca-Cola delivered nearly 36% total return in a matter of only two and a half years.
- There are a number of positive signs leading to a high probability of a dividend increase during 2023, according to the company’s full-year 2022 results.
- Coca-Cola (NYSE:KO) has been one of the best-performing large-cap consumer staple companies in recent years.
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