In today’s briefing:
- Best Outright and Pair Trades for an Ishiba-Led LDP
- BUY/SELL/HOLD: Hong Kong Stock Updates (September 28)
- Global Health (MEDANTA IN): Margins Pressure To Continue; Possible Takeover Bid In Future
- Weekly Consumer Tales: Pop Mart’s Unique Appeal-Miniso’s Yonghui Buy-China Stimulus-MTR’s Spicy IPO
- MercadoLibre: Entering the Global Stage
- Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years
- Silergy (6415.TT): Positive Optimistic Future Outlook
- China Consumption Weekly (30 Sep 2024): PDD, Meituan, BYD, Benz, Miniso, Yonghui
- Ricegrowers Ltd – Moving valuation to FY25f consensus
- Takamiya (2445 JP) – 1Q Follow-Up
Best Outright and Pair Trades for an Ishiba-Led LDP
- Expect continued buying in defense related, as well as banks and life insurance, renewable energy, rails, and medical IT plays with Shigeru Ishiba at the helm.
- The Market will be quick to rotate out of names which spiked into Friday’s close on expectation for a Sanae Takaichi win in the LDP election.
- Ishiba has been a vocal critic of Abenomics, and his potential policies aimed at higher taxes for investment incomes and capital gains are set to weigh on the Japanese market.
BUY/SELL/HOLD: Hong Kong Stock Updates (September 28)
- Hong Kong is showing strong market momentum as consumer staples, consumer discretionary, healthcare and tech surge on increased momentum.
- Xtep International (1368 HK) had a good 1H24 and benefited from better consumer sentiment. Analysts are upgrading Tongcheng Travel Holdings (780 HK) on an improved outlook.
- Goldman Sachs upgraded their rating on Bilibili (9626 HK) , Bilibili (BILI US) to a BUY with improving user MAU/DAU measures and the success of its newly launched game.
Global Health (MEDANTA IN): Margins Pressure To Continue; Possible Takeover Bid In Future
- Global Health (Medanta) (MEDANTA IN) reported double-digit growth in revenue in Q1FY25, while sluggish developing hospitals was a drag on the margins.
- The company plans to add 1,000–1,500 beds in next 2–3 years, with most of the planned bed addition being at greenfield projects entailing higher capex per bed.
- Medanta does offer synergy as a possible takeover candidate for a leading hospital operator.
Weekly Consumer Tales: Pop Mart’s Unique Appeal-Miniso’s Yonghui Buy-China Stimulus-MTR’s Spicy IPO
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- Despite weak consumer spending in China, there are a few bright spots—an example is Pop Mart International Group (9992 HK)’s strong sales growth partly driven by the “red lipstick effect.”
- Miniso (MNSO US)’s stock plunged early last week but quickly recovered, reinforcing our view that its deal with Yonghui Superstores Co., (601933 CH) has some promise.
MercadoLibre: Entering the Global Stage
- MercadoLibre continues its climb, hitting new highs in both Average Weight (0.4%) and Funds Invested (23.42%).
- In the last six months, 4.2% of funds have added MercadoLibre to their portfolios, while key EM holdings HDFC Bank and AIA Group have seen declining ownership.
- 20 new positions have been opened over the last 6-months, with Goldman Sachs Global Impact Opportunities and Fidelity Special Situations among the fresh buyers, against only 6 closures.
Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years
- The weak business, social entertainment, become insignificant in recent quarters.
- All operating data in music is promising, including paying user base, ARPPU, and sublicensing revenue.
- We set an upside of 20% and a price target of US$14.80 for the end of 2025.
Silergy (6415.TT): Positive Optimistic Future Outlook
- China’s central bank cuts rates and unveils new measures to combat economic slowdown, creating a more relaxed monetary policy environment to stimulate consumption and investment.
- Silergy’s Automotive segment remains a driving force, especially with the addition of the Electric Vehicle ( EV) market.
- While Silergy faced demand insufficiency previously, it has indicated that the end demand is expected to revive by the end of 2024 from the 4th quarter.
China Consumption Weekly (30 Sep 2024): PDD, Meituan, BYD, Benz, Miniso, Yonghui
- Temu as a subsidiary of PDD becomes the second largest global e-commerce website.
- Meituan merges departments into fewer business units to cut expenses further.
- Mercedes-Benz left the joint venture with BYD, as its high end products are not as popular as Tesla models.
Ricegrowers Ltd – Moving valuation to FY25f consensus
- RaaS has published an update report on agri-FMCG group Ricegrowers, trading as SunRice (ASX:SGLLV), updating our Sum of The Parts (SoTP) valuation as we move from FY24 estimates/consensus data to FY25.
- In moving our consensus valuation year from FY24 to FY25, we look back on selected RaaS peer EPS growth trends over the past four years (FY23a-FY26f inclusive).
- Only four stocks including SGLLV [the others (ASX:TWE), (ASX:RIC) and (SB:EBRO)] have not or are not forecast to have a down year during this period.
Takamiya (2445 JP) – 1Q Follow-Up
- Takamiya (hereafter, the Company) reported its 1Q FY2025/3 sales of ¥9,745 mn (-1.5% YoY), operating profit of ¥262 mn (-35.8% YoY), ordinary profit of ¥344 mn (-44.1% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥195 mn (-53.2% YoY).
- By segment, the Platform Business and Overseas Business saw increases in both sales and profit, while the Rental Business saw sales increase but profit decline, and the Sales Business saw declines in both sales and profit.
1H 2025/3 and the full-year forecast remains unchanged from the initial forecast.
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