IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, <a href="https://www.bloomberg.com/news/articles/2023-07-25/l-occitane-owner-said-to-mull-buyout-of-4-billion-beauty-firm" target="_blank" rel="noopener">according to Bloomberg</a>. Mr Geiger has been exploring financing options for the potential deal.</li>
<li>The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.</li>
<li>L’Occitane released a solid <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0725/2023072500263.pdf" target="_blank" rel="noopener">1QFY2024 update</a> today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. </li>
</ul>



L'Occitane (973 HK) is drawing takeover interest from Reinold Geiger, the Chairman and the largest shareholder, according to Bloomberg. Mr Geiger has been exploring financing options for the potential deal.
The presence of a significant disinterested shareholder, Acatis KVG, necessitates an attractive takeover premium. Acatis KVG trimmed its stake in July 2021 at HK$30.01 per share.
L’Occitane released a solid 1QFY2024 update today with constant currency growth of 24.5% YoY. Irrespective of a bid materialising, the valuation is undemanding compared to peer multiples. 


L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mandom-corp" target="_blank" data-smartkarma-citation="entities:8353:1" rel="noopener">Mandom Corp (4917 JP)</a> has disclosed that the CVC-sponsored MBO price has increased by 28.6% from JPY1,960 to JPY2,520.</li>
<li>The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its proceeds into the offeror's parent entity.</li>
<li>The revised terms are attractive, and this is a done deal. The offer closes on 18 December, with payment from 25 December.</li>
</ul>



Mandom Corp (4917 JP) has disclosed that the CVC-sponsored MBO price has increased by 28.6% from JPY1,960 to JPY2,520.
The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its proceeds into the offeror's parent entity.
The revised terms are attractive, and this is a done deal. The offer closes on 18 December, with payment from 25 December.


Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mandom-corp" target="_blank" data-smartkarma-citation="entities:8353:1" rel="noopener">Mandom Corp (4917 JP)</a> has proposed countermeasures in response to Murakami’s 18.87% voting stake and to ostensibly secure time for an alternative, viable (higher) offer.</li>
<li>The read-across from the proposal is that CVC’s offer at current terms will fail, CVC is unwilling to match Murakami/Hibiki’s expectations, and there could be genuine interest from third-party bidders. </li>
<li>Nevertheless, countermeasures are unnecessary as the share price and presence of activists provide the time needed for the Board’s purported aim to secure a higher offer.       </li>
</ul>



Mandom Corp (4917 JP) has proposed countermeasures in response to Murakami’s 18.87% voting stake and to ostensibly secure time for an alternative, viable (higher) offer.
The read-across from the proposal is that CVC’s offer at current terms will fail, CVC is unwilling to match Murakami/Hibiki’s expectations, and there could be genuine interest from third-party bidders. 
Nevertheless, countermeasures are unnecessary as the share price and presence of activists provide the time needed for the Board’s purported aim to secure a higher offer.       


Mandom (4917 JP): Countermeasures Ostensibly to Buy Time for a Higher Offer

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Reports that Apple is set to release a touchscreen MacBook should help Nitto Denko.</li>
<li>China AI play Cambricon sees revs and OP surge, pointing to more upside for JP FA plays with Sino-semi exposure.</li>
<li>Luxury back in the spotlight may help Shiseido and Kose rebound off multi-month lows.</li>
</ul>


Reports that Apple is set to release a touchscreen MacBook should help Nitto Denko.
China AI play Cambricon sees revs and OP surge, pointing to more upside for JP FA plays with Sino-semi exposure.
Luxury back in the spotlight may help Shiseido and Kose rebound off multi-month lows.


Japan Morning Connection: LDP and Ishin May Sign a Pact to Pave the Way for Japan's First Female PM

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Equity Bottom-Up

<ul>
<li>Shiseido’s share price dropped 70% over the past six years, compared to a 110% gain by Topix, but the stock just crossed its 200-day MAV. Time for another look?  </li>
<li>In our view, the stock lacks most of the required criteria for a successful turnaround, and reeks of all the important criteria for failure. </li>
<li>Shiseido’s stock already prices in a 50% earnings recovery. To be compelling, the forecast needs to be 4 standard deviations above the mean, or the price needs to decline 30%.  </li>
</ul>


Shiseido’s share price dropped 70% over the past six years, compared to a 110% gain by Topix, but the stock just crossed its 200-day MAV. Time for another look?  
In our view, the stock lacks most of the required criteria for a successful turnaround, and reeks of all the important criteria for failure. 
Shiseido’s stock already prices in a 50% earnings recovery. To be compelling, the forecast needs to be 4 standard deviations above the mean, or the price needs to decline 30%.  


Why Shiseido (4911) Never Worked as a Turnaround Stock

Japan

KOSE Corporation manufactures, retails, and exports cosmetics including make up, skin care, and hair care products.  The Company sells its products in Hong Kong, China, Singapore, and Malaysia.

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Kose Corp (4922 JP)

L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

The presence of a significant disinterested shareholder necessitates an attractive takeover premium. Irrespective of a bid materialising, the...

Arun George

Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520

The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its...

Arun George

Mandom (4917 JP): Countermeasures Ostensibly to Buy Time for a Higher Offer

The method is regrettable, but the purported intention to secure time for a higher offer is acceptable. The current offer terms are untenable, and...

Arun George

Japan Morning Connection: LDP and Ishin May Sign a Pact to Pave the Way for Japan's First Female PM

Tech and AI lower in the US including Oracle despite releasing positive long term guidance. May see further upside for Shiseido and Kose if...

Andrew Jackson

Why Shiseido (4911) Never Worked as a Turnaround Stock

Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.

Michael Allen

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

L’Occitane (973 HK): Controlling Shareholder Mulling a Bid?

The presence of a significant disinterested shareholder necessitates an attractive takeover premium. Irrespective of a bid materialising, the...

Arun George

Mandom (4917 JP): A Big Win for Activists as CVC-Sponsored MBO Price Raised to JPY2,520

The revised terms mark a big win for activists, Murakami and Hibiki. Both activists will tender, with Hibiki reinvesting around 40% of its...

Arun George

Mandom (4917 JP): Countermeasures Ostensibly to Buy Time for a Higher Offer

The method is regrettable, but the purported intention to secure time for a higher offer is acceptable. The current offer terms are untenable, and...

Arun George

Japan Morning Connection: LDP and Ishin May Sign a Pact to Pave the Way for Japan's First Female PM

Tech and AI lower in the US including Oracle despite releasing positive long term guidance. May see further upside for Shiseido and Kose if...

Andrew Jackson

Why Shiseido (4911) Never Worked as a Turnaround Stock

​Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.

Michael Allen

Shiseido's stock may have crossed its 200-day MAV, but it lacks the criteria for a successful turnaround and may still be overpriced.