In today’s briefing:
- Recruit (6098 JP) – BIG Headline Buyback But Disappointing if That Is Best Use Of Cash
- Insiders Buying and Selling Prior To Mandatory Block Deal Pre-Announcement Requirement in Korea
- Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Shenzhen Yuejiang Technology IPO: What’s The IPO Valuation? Long-Term Growth Prospects
- Aeon Delight (9787 JP): Q1 FY02/25 flash update
- FedEx Corporation: Can The Potential Sale of FedEx Freight Enable Some Kind Of Strategic Growth? – Major Drivers
- MillerKnoll, Inc. – Updating FY25 and FY26 EPS and Revenue Estimates
Recruit (6098 JP) – BIG Headline Buyback But Disappointing if That Is Best Use Of Cash
- Last December, Recruit Holdings (6098 JP) announced a ¥200bn buyback which sounded big but with lots of cross-holders, wasn’t huge. The stock is up 80% in 6+ months since.
- Today, the company announced a new buyback of ¥600bn. This is very aggressive, and at 25x EBITDA and 40x PER, is probably due to demand to sell.
- Crossholders now hold ¥2trln which is three-plus times this buyback. And if the price were to rise 10% a year for 3yrs, it would be four times.
Insiders Buying and Selling Prior To Mandatory Block Deal Pre-Announcement Requirement in Korea
- In this insight, we discuss recent, active insiders buying and selling their shares prior to the mandatory block deal pre-announcement requirement starting 24 July in Korea.
- The three companies that announced insiders selling (July) are down on average 3% YTD. However, the three companies that announced insiders buying (July) are up on average 74% YTD.
- LS Cable has been consistently increasing its ownership of LS Marine Solution, up from 46% stake as of 27 May 2024 to 56.14% as of 8 July 2024.
Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Sanil Electric (062040 KS) is looking to raise up to US$165m in its Korean IPO.
- Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
- In our previous notes, we talked about the company’s historical performance. In this note, we undertake a quick peer comparison and share our thoughts on valuation.
Shenzhen Yuejiang Technology IPO: What’s The IPO Valuation? Long-Term Growth Prospects
- Shenzhen Yuejiang Technology (Dobot), a Shenzhen-based cobot company with a diversified customer base globally, filed publicly for Hong Kong IPO.
- The terms of the IPO were not disclosed. The robotics company plans to increase production capacity due to high demand in the coming years.
- Dobot may be trading above the last round valuation of ~RMB3.5b, but I believe investors should focus on the company’s long-term growth prospects and rapidly growing TAM.
Aeon Delight (9787 JP): Q1 FY02/25 flash update
- Sales increased by 2.5% YoY to JPY81.1bn, operating profit decreased by 5.2% YoY to JPY3.3bn.
- Sales growth in Facilities Management, Security Services, Cleaning Services, and Materials and Supplies Sourcing Services contributed to overall revenue increase.
- Operating profit fell YoY due to higher SG&A expenses despite segment profit growth in several divisions.
FedEx Corporation: Can The Potential Sale of FedEx Freight Enable Some Kind Of Strategic Growth? – Major Drivers
- FedEx Corporation delivered a robust finish to its fiscal year 2024, showcasing a mixture of challenges and triumphs that reflect the intricate dynamics of the current global logistics and transportation landscape.
- In its fourth quarter, FedEx managed to inflect positive revenue growth amid an environment characterized by continuous demand volatilities and transitioning market conditions, all while advancing significant structural reforms aimed at improving efficiency and profitability.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
MillerKnoll, Inc. – Updating FY25 and FY26 EPS and Revenue Estimates
- Herein, we refresh our estimates and economic model for MillerKnoll after its release and conference call for 4QFY24, which ended May 2024.
- As noted in our earlier earnings analysis note dated June 27, 2024, management delivered strong margins, enabling it to beat estimates with the report.
- The margin performance benefited from cost discipline and sustained pricing benefits.
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