In today’s briefing:
- Razer Inc (1337 HK): Storm In A Tea Cup
- Razer’s Scheme: And that Is a Pass
- AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment
- India Channel Insight #33 | Shopee, Flipkart, Meesho, Swiggy
- Koei Tecmo – Potential For a Breakdown
- S&P BSE Indices (SENSEX Family): Quiddity Leaderboard for June 2022 Rebalance (Final)
- Cloud Chronicles: Chindata Attracting Bytes
- Omron – Better IAS Results Conceal Healthcare Segment Underperformance
- Chindata: Plenty of Upside Left
- Giverny Capital Asset Management Q1 2022 Letter
Razer Inc (1337 HK): Storm In A Tea Cup
- Razer Inc (1337 HK)‘s Scheme was comfortably voted through by shareholders.
- The overarching risk to the transaction, that it may fail the headcount test, largely turned out to be a storm in a tea cup.
- Tomorrow is the last day of trading with payment under the Scheme on or before the 20 May. Index sell flows come at the close.
Razer’s Scheme: And that Is a Pass
- Razer Inc (1337 HK)’s scheme was approved at today’s court meeting. The value test passed with 94.74% of the total disinterested shareholders voting in favour of the scheme.
- Despite our reservations about the headcount test, the scheme comfortably passed the headcount test with 465 for and just 16 against the scheme.
- At the last close and for the 20 May payment date, the gross and annualised spread to the offer is 3.7% and 56.1%, respectively.
AKM (1639 HK): Pre-Cons Fulfilled; Possible Early August Payment
- Flexible printed board player AKM Industrial (1639 HK) has announced the pre-conditions attached to the Scheme have now been fulfilled.
- The despatch of the Scheme Document has been delayed until the 10 June.
- Trading at a gross/annualised spread of 2.5/9.6%, including the FY21 final dividend, and payment in early August.
India Channel Insight #33 | Shopee, Flipkart, Meesho, Swiggy
- This insight focuses on private unicorns backed by Sea Ltd (SE US) , Walmart (WMT US) , Softbank Group (9984 JP) & Prosus NV (PROSY US)
- Growth would require new and even larger investments across the Internet Sector.
- Reliance and Tata’s retail plans are likely to challenge even giants like Amazon and Flipkart.
Koei Tecmo – Potential For a Breakdown
- Koei Tecmo’s earnings yesterday were on the strong side with 4Q OP beating by 28.7% despite a 1.79% miss at the top line.
- Thus, the typical pattern of heavy expensing of development costs in 4Q was missing and combined with some one offs could make hurdles for next year high.
- With the stock struggling to gain positive momentum and few clear positive catalysts on the horizon we remain negative.
S&P BSE Indices (SENSEX Family): Quiddity Leaderboard for June 2022 Rebalance (Final)
- The S&P BSE family of indices represents the performance of stocks listed on the Bombay Stock Exchange (BSE) across various sizes, themes, industries, and strategies.
- This series will mainly focus on the following indices of the S&P BSE family: S&P BSE 500, S&P BSE 200, S&P BSE 100, and S&P BSE SENSEX.
- In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Semi-annual Rebalance.
Cloud Chronicles: Chindata Attracting Bytes
- According to Bloomberg, Bain Capital-backed Chindata Group (CD US) is being scoped out by industry players.
- GDS Holdings (ADR) (GDS US) is rumoured to be interested in merging with Chindata. PE outfit PAG and EQT AB (EQT SS)-backed EdgeConneX are also, reportedly, in the mix.
- Chindata’s shares popped but are still 64% below its IPO price. This rumour follows data center provider 21Vianet (VNET US)‘s recent proposal from Hina Group and Shanghai’s Industrial Bank.
Omron – Better IAS Results Conceal Healthcare Segment Underperformance
- Omron’s 4Q results continued the trend of weakness in the FA sector and guidance was tepid unlike Yaskawa.
- In particular, the Healthcare Segment’s margins appear to be normalising and poses a downside risk along with typical cyclicality.
- At 14x EV/OP on guidance vs. a 10x multiple that we would consider fair, there is downside risk here.
Chindata: Plenty of Upside Left
- Chindata Group (CD US) is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.
- Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.
- CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.
Giverny Capital Asset Management Q1 2022 Letter
- Giverny Capital Asset Management, LLC is a partnership between GivernyCapital of Montreal and David Poppe, the former president and chief executive officer of Ruane, Cunniff & Goldfarb, LLC.
- The best companies tend to weather crises better than average ones, Poppe says.
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