In today’s briefing:
- Li Ning (2331 HK): Buying A HKD2.2bn Office Building – Now A Corporate Governance Discount?
- Yamazen Secondary Offer (8150 JP) – 5 Banks Sell To Make This a Future Activism Target
- GoTo (GOTO IJ) – TikTok Taking Tokopedia
- 2Q Follow-Up – Torex Semiconductor (6616 JP)
- Closing HOLI, PBR-A and 1669
- 4Q Follow-Up – Japan Business Systems (5036 JP)
- Pharmaron Beijing (3759.HK/300759.CH) – Share Price Would Continue to Underperform
- Beiersdorf: Success Based On Strong Portfolio Of Internationally Leading Brands
- [Week 13] Namaste India 🙏 | Whirlpool’s Tax Woes
- Beyond ASP Declines, Additional Dynamic Undermines Yunda | We Explain Roles of STO, BABA, CaiNiao
Li Ning (2331 HK): Buying A HKD2.2bn Office Building – Now A Corporate Governance Discount?
- Li Ning (2331 HK) announced yesterday that the company has acquired a HK office project, the Harbour East, from Henderson Land, for a total consideration of HKD2.2bn.
- The acquisition is quite unexpected given that Li Ning has had a clean corporate governance track record.
- The company now trades at 11x foward PE, assuming no growth in 2023 and 2024 earnings. It is now a value stock, though the visibility is very low.
Yamazen Secondary Offer (8150 JP) – 5 Banks Sell To Make This a Future Activism Target
- On Monday after the close, trading house Yamazen Corp (8051 JP) announced a secondary offering where five bank shareholders would sell ~6.7mm shares (including greenshoe).
- It appears as if most of the banks are selling everything, making it about US$50mm, 50 days of ADV, and about 7% of shares out.
- But this should get swallowed pretty easily. The stock is DIRT CHEAP. The caveat? Crossholders and insiders will still own 45-48% post-offer.
GoTo (GOTO IJ) – TikTok Taking Tokopedia
- GoTo Gojek Tokopedia (GOTO IJ) has announced that it will sell a controlling 75.01% stake in Tokopedia to TikTok in order to create Indonesia’s leading e-commerce platform.
- There had been earlier indications that a deal was in the offing but the size of TikTok’s stake was surprising plus it has committed to invest US$1.5bn in Tokopedia.
- GoTo will retain a 24.99% non-dilutive stake and will receive an ongoing revenue stream from Tokopedia in line with its scale and growth contributing directly to its EBITDA.
2Q Follow-Up – Torex Semiconductor (6616 JP)
- Multiple signs are flashing that the reset phase of the silicon cycle is beginning to rebound.
- On November 28, WSTS (World Semiconductor Trade Statistics) announced its Fall forecast for 2023 and 2024, marking the first upward revision in the current down cycle, revising up both 2023 to a single-digit decline, and revising up 2024 growth to +13.1%, due to better-than-expected demand in Apr-Jun and Jul-Sep.
- Quarterly worldwide billings data shows the YoY percentage decline marked the bottom in Jan- Mar at -21.3% YoY, shrinking to only -4.5% in the Jul-Sep quarter.
Closing HOLI, PBR-A and 1669
- News came out today that Hollysys (HOLI) is being acquired by Ascendant for $26.5/share . So I sold my shares for $24.74 today.
- And closing this at $24.88. Only a 7% spread, and there could be some delays before this closes.
- Was a nice trade and a 43% gain since dedicating a full write-up to it in July this year.
4Q Follow-Up – Japan Business Systems (5036 JP)
- Among priority measures for FY24/9, JBS management is particularly focused on rolling out global licensing business for major enterprise customers, as well as strengthening cloud AI proposal capabilities.
- The strategic business alliance concluded with Crayon Group at the end of August enables JBS to offer global support services to customers outside the coverage of JBS overseas offices.
- The two partners will also collaborate on developing AI and security solutions mainly for Microsoft Products.
Pharmaron Beijing (3759.HK/300759.CH) – Share Price Would Continue to Underperform
- Pharmaron’s performance has shown a clear downward trend this year, and the growth in 23Q4 may be even lower. That means this year’s results could fall short of management’s expectations.
- The essence of unsatisfactory profit margin is due to low capacity utilization/management efficiency.The underlying reason is the sharp decline in drug R&D demand due to the deterioration of financing environment.
- Pharmaron seems ill-prepared in peptide CDMO, and its performance would further lag behind Wuxi AppTec in the future. Pharmaron may not be able to contribute alpha during industry downturns.
Beiersdorf: Success Based On Strong Portfolio Of Internationally Leading Brands
- The investment case revolves around the Company’s strong long-term fundamentals
- An attractive and complementary skincare-focused brand portfolio centred on flagship Nivea brand in the mass segment, Eucerin in the growing dermocosmetics category and La Prairie in the higher-margin luxury segment.
- Less expensive option than L’Oréal to gain exposure to an attractive skincare portfolio. The Company’s business model should prove resilient in a more challenging marker environment
[Week 13] Namaste India 🙏 | Whirlpool’s Tax Woes
- The broader sentiment remains positive, with markets primarily driven by participation from foreign investors, wise to increase the trailing stop at 20,600 for any possible change in trend.
- We have already highlighted the weak operational performance of Whirlpool of India (WHIRL IN) , the company’s tax woes continue.
- Names covered in this insight include Whirlpool of India (WHIRL IN) , Thyrocare Technologies (THYROCAR IN), Paytm (PAYTM IN) and Flywire Corp (FLYW US)
Beyond ASP Declines, Additional Dynamic Undermines Yunda | We Explain Roles of STO, BABA, CaiNiao
- Recently, Yunda Holding has lost volume share to rival STO Express
- One reason could be Alibaba’s transfer of its 25% stake in STO to CaiNiao
- For Yunda, this dynamic adds to intense near-term pressure on margins
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