In today’s briefing:
- ENM (128 HK): Chinachem Takeover
- Nikkei 225 Sep 2023 Review – Still Fastie, Nitori, Zozo, and Lasertec as Interesting Names
- ADEA: Undiscovered AI
- Companies with High Frequency of Share Retirements Tend to Have a High Awareness of Cash Allocation
- Hyatt Hotels Corporation: The New Extended Stay Offering Could Be A Game Changer? – Key Drivers
- Royal Caribbean Cruises Ltd.: Poised For An Improved 2023? – Key Drivers
ENM (128 HK): Chinachem Takeover
- Fashion wear retailer ENM Holdings (128 HK) has received a delisting Offer from major shareholder, Chinachem.
- The Scheme consideration of HK$0.58 is a 24.7% premium to last close, although shares popped 24% prior to suspension.
- The Offer price is final. There is probably enough here for the Offer to get up. But there is potentially significant value to be unlocked from recent land rezoning.
Nikkei 225 Sep 2023 Review – Still Fastie, Nitori, Zozo, and Lasertec as Interesting Names
- The Nikkei 225 Sep 2023 review has 2 months left of data collection. That means the rankings are quasi-fixed. So then the question is what to do with them.
- There is a consultation in progress. You still have one week to respond, but that doesn’t change the names.
- The top inclusion is the big one in dollar terms but low in liquidity. The next two are likely to be consumer names, and much more impactful.
ADEA: Undiscovered AI
- ADEA could be the most under the radar artificial intelligence (“AI”) beneficiary through its patent portfolio related to hybrid bonding
- Hybrid bonding is expected to help usher the next generation of semiconductors to handle the growing need for speed and bandwidth with lower power consumption
- ADEA’s stock has been mainly valued on the free cash flow it is able to generate from its media patent portfolio with little value given to ADEA’s semiconductor patent portfolio
Companies with High Frequency of Share Retirements Tend to Have a High Awareness of Cash Allocation
- With increasing pressure to buy back treasury stock to raise ROE, more companies with few tradable shares are expected to promptly retire treasury stock in the future.
- Companies that have retired treasury stock three or more times show not only higher stock price valuations, but also superior growth policy scores, cash holding scores, and dividend policy scores.
- Rather than simply focusing on the share repurchase, the focus should be on the overall cash allocation that led to it, including investment in growth and shareholder returns.
Hyatt Hotels Corporation: The New Extended Stay Offering Could Be A Game Changer? – Key Drivers
- Hyatt Hotels delivered a mixed set of results in its most recent quarter with revenues above Wall Street expectations but below-par earnings.
- Hyatt achieved significant net room expansions, with more than 5000 rooms added on a gross in the quarter.
- In the quarter, Hyatt completes its Dream Hotel Group acquisition.
Royal Caribbean Cruises Ltd.: Poised For An Improved 2023? – Key Drivers
- Royal Caribbean delivered a solid result managed an all-around beat in the last quarter.
- For both ticket and onboard, solid demand for Caribbean itineraries is translated into advanced load factors at quite a better-than-expected pricing.
- Moreover, secular tailwinds continued benefitting Royal Caribbean, with consumers shifting spending and preferences from goods to experiences, resulting in strong travel and entertainment spend.
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