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Smartkarma Daily Briefs

Aug 08
0

Daily Brief Crypto: Decentraland and more

By | Crypto, Daily Briefs

In today’s briefing:

  • Decentraland
  • DeFi Options Protocols Series (#2): The Story of David and Goliath?

Decentraland

By Etherbridge

  • At the beginning of last year, we wrote about the idea of a Metaverse and what it may look like.
  • Little did we know there would be such excitement and adoption within 2021 alone, with even huge companies like Facebook changing their name to Meta.
  • This brought the idea of a Metaverse into the mainstream as nothing had before; it also catapulted two of the largest blockchain-based Metaverses, Decentraland and The Sandbox, into the limelight and significantly increased user adoption of the networks.

DeFi Options Protocols Series (#2): The Story of David and Goliath?

By Alec Tseung

  • DeFi options protocol’s TVL dropped significantly over the past three months since the collapse of Terra/Luna and amid a series of crypto platforms’ liquidations and withdrawal freezes.
  • Albeit this, the three protocols we highlighted in our first note have shown no signs of slowing down in terms of launching new updates and products.
  • DeFi options protocols are still at the beginning of their development and need to see to some of their own issues before being able to challenge CeFi/Deribit.

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Aug 08
0

Daily Brief Event-Driven: Lifestyle International’s HK$5.00 Privatisation Bid and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Lifestyle International’s HK$5.00 Privatisation Bid
  • Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation
  • Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai
  • SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO
  • Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True
  • OZ Minerals (OZL): BHP Offer Swiftly Rejected
  • Lifestyle (1212 HK): Thomas Yau’s Scheme
  • Kinetic&Globalvia/Go-Ahead: Increased Offer

Lifestyle International’s HK$5.00 Privatisation Bid

By Arun George

  • Lifestyle International Holdings (1212 HK) announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.
  • The offer price is final. Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). No shareholder holds a blocking stake.
  • The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.

Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation

By Arun George

Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai

By Travis Lundy

  • Marui Group (8252 JP) was a long-suffering Japanese retailer with generally sub-standard locations and “different” customer base, and much of its income came from consumer credit. 
  • Since a decade ago, helped by the rise of foreign tourism income, Marui has been redeveloping itself. Michael Causton‘s insights are a great help to understanding the background. 
  • They are aiming at non-stuff retailing. Friday saw earnings, cancellation of the yutai program, a slight div hike, and an increase in the already large buyback program. It’s interesting!

SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO

By Arun George

  • SAIC Motor (600104 CH) completed the auction procedures for acquiring a 71.04% stake in Dongzheng Automotive Finance (2718 HK). This will trigger an unconditional MGO at HK$1.2430 per H Share.
  • The offeror and Dongzheng are required to issue the composite document on or before 11 August jointly. However, an application has been made to the Executive to extend the deadline. 
  • At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.

Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True

By Arun George

OZ Minerals (OZL): BHP Offer Swiftly Rejected

By Brian Freitas

  • BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
  • We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
  • 3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We’d wait for a price around A$25/share to enter.

Lifestyle (1212 HK): Thomas Yau’s Scheme

By David Blennerhassett

  • Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.  
  • Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out. 
  • The Offer price is final. No dividends will be paid during the Offer period.

Kinetic&Globalvia/Go-Ahead: Increased Offer

By Jesus Rodriguez Aguilar

  • On 4 August, the consortium sweetened the offer by 50p, 3.3%, to 1,550p/share, comprising 1,450p+100p special dividend (conditional upon Scheme becoming Effective); 13.3x Fwd P/E and 7.9x EV/Fwd EBIT.
  • Still below below the 8.6x EV/Fwd EBIT offered by DWS for Stagecoach, but the market believes that the deal will complete. Irrevocable undertakings plus letters of intent represent 26.86%.
  • Gross spread is 1.04%, 8.66% estimated annual return (assuming settlement and paying of the special dividend on 22 September). Reiterate long GOG LN.

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Aug 08
0

Daily Brief Equity Bottom-Up: PayPal: Elliott Sees Opportunity and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • PayPal: Elliott Sees Opportunity, So Do We
  • Disco (6146 JP): YoY Growth Headed Toward Zero
  • Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance
  • Komatsu (6301) | Back Test Suggests 56% Upside from Here
  • Mesoblast (MSB AU): Trading Halt; Decreased Net Cash Usage in Q4; Positive Clinical Trial Results
  • Shandong Weigao Orthopaedic – 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable
  • COSCO Shipping Energy (1138 HK): Stay Away at the Moment
  • Back From the Grave

PayPal: Elliott Sees Opportunity, So Do We

By Aaron Gabin

  • Elliott Management has bought a $2B stake in PayPal and seeks cost cutting measures.
  • PayPal has started to take action through cost cutting, a new buyback, new organizational measures, and increased focus on revenue strategy.
  • The wild card that would get us more bullish is Elliott forcing a merger with Pinterest, which would yield a readymade Dan Schulman replacement in Bill Ready.

Disco (6146 JP): YoY Growth Headed Toward Zero

By Scott Foster

  • After beating guidance every quarter last fiscal year, Disco fell short in the three months to June.
  • Management is guiding for the usual seasonal rebound in 2Q, but year-on-year growth rates are forecast to drop sharply – most likely on their way to negative territory in 2H.
  • Disco has stopped disclosing orders data, reducing visibility for investors. 2Q results are likely to be the next catalyst. We see no reason to jump in now.

Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance

By Sameer Taneja

  • Since our first bullish note on  GrafTech International Ltd (EAF US) the stock is down -31% due to softer ASP’s and cost inflation. We believe these headwinds will persist.
  • Deleveraging continues with net debt declining from 1.1 bn to 865 mn USD YoY, but the pace has slowed due to negative working capital changes resulting in lower OCF. 
  • Factoring in a 12% drop in ASP YoY, the stock trades at 6.3x FY23 and 4.7x EV-EBITDA, pushing our thesis of debt deleveraging/capital return further out.

Komatsu (6301) | Back Test Suggests 56% Upside from Here

By Mark Chadwick

  • At 1.1x PB, Komatsu’s stock price has already discounted a severe recession 
  • Our back test suggests a 56% return over 12-months from this level (100% hit rate) 
  • We see little risk of balance sheet impairment and believe the stock is trading at attractive valuations for long-term investors  

Mesoblast (MSB AU): Trading Halt; Decreased Net Cash Usage in Q4; Positive Clinical Trial Results

By Tina Banerjee

  • Mesoblast Ltd (MSB AU) shares have been put on trading halt on August 4 due to pending announcement on private placement. The company undertook last private placement in March 2021.
  • Net operating cash usage has been declining over the last six quarters. In Q4FY22, net cash usage for operating activities decreased 33% y/y to $13.9 million.
  • Last month, Mesoblast announced promising results from rexlemestrocel-L trial in chronic heart failure patients. Rexlemestrocel-L delivered an improvement in left ventricular ejection fraction at 12 months.

Shandong Weigao Orthopaedic – 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable

By Xinyao (Criss) Wang

  • Although Weigao achieved solid growth in 2021 after pandemic was under control,the real test will come in 2022. The implementation of centralized procurement will have a significant impact on performance.
  • After spinal implants are included in centralized procurement this year, all of Weigao’s three major businesses (spinal implants/trauma implants/joint implants) are within the scope. Short-term performance pressure is inevitable.
  • As a result of the pandemic/lockdown in 2022H1, we lowered our performance forecast on Weigao.   

COSCO Shipping Energy (1138 HK): Stay Away at the Moment

By Osbert Tang, CFA

  • At 0.71x 12-month forward P/B multiple, Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) has overly discounted the earnings recovery for FY22 and FY23.
  • VLCC rate has rebounded since end-Jun but are still at unexciting US$10,000/day level only. This is below an estimated cash breakeven level of US$25,000/day for its fleet.
  • Tanker demand-supply balance looks to be at equilibrium over the next 12 months, leaving limited potential for significant surge in rate. This opens room for earnings disappointment, in our view. 

Back From the Grave

By subSPAC

  • Things have gone from bad to worse at Nikola over the past year.
  • The Commercial Battery and Hydrogen Truck maker, once considered the SPAC poster child, has been shrouded in controversy after defrauding investors and delaying production on several occasions.
  • After seeing its stock crushed, Nikola has strung together a succession of wins to stage a comeback in recent months. Can the company maintain its momentum and deliver on its original vision?

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Aug 08
0

Daily Brief Industrials: DISCO Corp, GrafTech International Ltd, Komatsu Ltd, Cosco Shipping Energy Transportation Co. Ltd. (H), Go-Ahead, Nikola Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Disco (6146 JP): YoY Growth Headed Toward Zero
  • Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance
  • Komatsu (6301) | Back Test Suggests 56% Upside from Here
  • COSCO Shipping Energy (1138 HK): Stay Away at the Moment
  • Kinetic&Globalvia/Go-Ahead: Increased Offer
  • Back From the Grave

Disco (6146 JP): YoY Growth Headed Toward Zero

By Scott Foster

  • After beating guidance every quarter last fiscal year, Disco fell short in the three months to June.
  • Management is guiding for the usual seasonal rebound in 2Q, but year-on-year growth rates are forecast to drop sharply – most likely on their way to negative territory in 2H.
  • Disco has stopped disclosing orders data, reducing visibility for investors. 2Q results are likely to be the next catalyst. We see no reason to jump in now.

Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance

By Sameer Taneja

  • Since our first bullish note on  GrafTech International Ltd (EAF US) the stock is down -31% due to softer ASP’s and cost inflation. We believe these headwinds will persist.
  • Deleveraging continues with net debt declining from 1.1 bn to 865 mn USD YoY, but the pace has slowed due to negative working capital changes resulting in lower OCF. 
  • Factoring in a 12% drop in ASP YoY, the stock trades at 6.3x FY23 and 4.7x EV-EBITDA, pushing our thesis of debt deleveraging/capital return further out.

Komatsu (6301) | Back Test Suggests 56% Upside from Here

By Mark Chadwick

  • At 1.1x PB, Komatsu’s stock price has already discounted a severe recession 
  • Our back test suggests a 56% return over 12-months from this level (100% hit rate) 
  • We see little risk of balance sheet impairment and believe the stock is trading at attractive valuations for long-term investors  

COSCO Shipping Energy (1138 HK): Stay Away at the Moment

By Osbert Tang, CFA

  • At 0.71x 12-month forward P/B multiple, Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) has overly discounted the earnings recovery for FY22 and FY23.
  • VLCC rate has rebounded since end-Jun but are still at unexciting US$10,000/day level only. This is below an estimated cash breakeven level of US$25,000/day for its fleet.
  • Tanker demand-supply balance looks to be at equilibrium over the next 12 months, leaving limited potential for significant surge in rate. This opens room for earnings disappointment, in our view. 

Kinetic&Globalvia/Go-Ahead: Increased Offer

By Jesus Rodriguez Aguilar

  • On 4 August, the consortium sweetened the offer by 50p, 3.3%, to 1,550p/share, comprising 1,450p+100p special dividend (conditional upon Scheme becoming Effective); 13.3x Fwd P/E and 7.9x EV/Fwd EBIT.
  • Still below below the 8.6x EV/Fwd EBIT offered by DWS for Stagecoach, but the market believes that the deal will complete. Irrevocable undertakings plus letters of intent represent 26.86%.
  • Gross spread is 1.04%, 8.66% estimated annual return (assuming settlement and paying of the special dividend on 22 September). Reiterate long GOG LN.

Back From the Grave

By subSPAC

  • Things have gone from bad to worse at Nikola over the past year.
  • The Commercial Battery and Hydrogen Truck maker, once considered the SPAC poster child, has been shrouded in controversy after defrauding investors and delaying production on several occasions.
  • After seeing its stock crushed, Nikola has strung together a succession of wins to stage a comeback in recent months. Can the company maintain its momentum and deliver on its original vision?

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free
Aug 08
0

Daily Brief Industrials: DISCO Corp, GrafTech International Ltd, Komatsu Ltd, Cosco Shipping Energy Transportation Co. Ltd. (H), Go-Ahead, Nikola Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Disco (6146 JP): YoY Growth Headed Toward Zero
  • Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance
  • Komatsu (6301) | Back Test Suggests 56% Upside from Here
  • COSCO Shipping Energy (1138 HK): Stay Away at the Moment
  • Kinetic&Globalvia/Go-Ahead: Increased Offer
  • Back From the Grave

Disco (6146 JP): YoY Growth Headed Toward Zero

By Scott Foster

  • After beating guidance every quarter last fiscal year, Disco fell short in the three months to June.
  • Management is guiding for the usual seasonal rebound in 2Q, but year-on-year growth rates are forecast to drop sharply – most likely on their way to negative territory in 2H.
  • Disco has stopped disclosing orders data, reducing visibility for investors. 2Q results are likely to be the next catalyst. We see no reason to jump in now.

Graftech: Headwinds Persist from Cost Inflation and Soft Pricing Guidance

By Sameer Taneja

  • Since our first bullish note on  GrafTech International Ltd (EAF US) the stock is down -31% due to softer ASP’s and cost inflation. We believe these headwinds will persist.
  • Deleveraging continues with net debt declining from 1.1 bn to 865 mn USD YoY, but the pace has slowed due to negative working capital changes resulting in lower OCF. 
  • Factoring in a 12% drop in ASP YoY, the stock trades at 6.3x FY23 and 4.7x EV-EBITDA, pushing our thesis of debt deleveraging/capital return further out.

Komatsu (6301) | Back Test Suggests 56% Upside from Here

By Mark Chadwick

  • At 1.1x PB, Komatsu’s stock price has already discounted a severe recession 
  • Our back test suggests a 56% return over 12-months from this level (100% hit rate) 
  • We see little risk of balance sheet impairment and believe the stock is trading at attractive valuations for long-term investors  

COSCO Shipping Energy (1138 HK): Stay Away at the Moment

By Osbert Tang, CFA

  • At 0.71x 12-month forward P/B multiple, Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) has overly discounted the earnings recovery for FY22 and FY23.
  • VLCC rate has rebounded since end-Jun but are still at unexciting US$10,000/day level only. This is below an estimated cash breakeven level of US$25,000/day for its fleet.
  • Tanker demand-supply balance looks to be at equilibrium over the next 12 months, leaving limited potential for significant surge in rate. This opens room for earnings disappointment, in our view. 

Kinetic&Globalvia/Go-Ahead: Increased Offer

By Jesus Rodriguez Aguilar

  • On 4 August, the consortium sweetened the offer by 50p, 3.3%, to 1,550p/share, comprising 1,450p+100p special dividend (conditional upon Scheme becoming Effective); 13.3x Fwd P/E and 7.9x EV/Fwd EBIT.
  • Still below below the 8.6x EV/Fwd EBIT offered by DWS for Stagecoach, but the market believes that the deal will complete. Irrevocable undertakings plus letters of intent represent 26.86%.
  • Gross spread is 1.04%, 8.66% estimated annual return (assuming settlement and paying of the special dividend on 22 September). Reiterate long GOG LN.

Back From the Grave

By subSPAC

  • Things have gone from bad to worse at Nikola over the past year.
  • The Commercial Battery and Hydrogen Truck maker, once considered the SPAC poster child, has been shrouded in controversy after defrauding investors and delaying production on several occasions.
  • After seeing its stock crushed, Nikola has strung together a succession of wins to stage a comeback in recent months. Can the company maintain its momentum and deliver on its original vision?

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free
Aug 08
0

Daily Brief TMT/Internet: Total Access Communication, Opyn Squeeth and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True
  • DeFi Options Protocols Series (#2): The Story of David and Goliath?

Weekly Deals Digest (07 Aug) – Hongjiu Fruit, Link, Infomedia, Atlas Arteria, ResApp, DTAC/True

By Arun George

DeFi Options Protocols Series (#2): The Story of David and Goliath?

By Alec Tseung

  • DeFi options protocol’s TVL dropped significantly over the past three months since the collapse of Terra/Luna and amid a series of crypto platforms’ liquidations and withdrawal freezes.
  • Albeit this, the three protocols we highlighted in our first note have shown no signs of slowing down in terms of launching new updates and products.
  • DeFi options protocols are still at the beginning of their development and need to see to some of their own issues before being able to challenge CeFi/Deribit.

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Aug 08
0

Daily Brief Energy/Materials: Crude Oil, OZ Minerals Ltd and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • WTI 85 Rally Pivot Will Shift the Inflation Narrative
  • OZ Minerals (OZL): BHP Offer Swiftly Rejected

WTI 85 Rally Pivot Will Shift the Inflation Narrative

By Thomas Schroeder

  • WTI bear call from 116 is meeting our 89/85 low zone with a key turn target near 85 that will spur a rally and shift inflation expectations.
  • The touted break down from triangulation is setting up a key low. We did reduce our short at 89 with a plan to close the remaining tranche on weakness.
  • RSI is not confirming new price lows for a case of bull divergence. A macro low is setting up if the 85 support holds and induces a bull turn.

OZ Minerals (OZL): BHP Offer Swiftly Rejected

By Brian Freitas

  • BHP Group Ltd (BHP AU) made a non-binding indicative proposal to acquire all shares in OZ Minerals Ltd (OZL AU) at A$25/share and was swiftly rejected.
  • We feel an offer around the A$28.5-A$29/share range would get the OZ Minerals Ltd (OZL AU) Board to open up its books for due diligence.
  • 3.25% of the outstanding shares have been shorted and the stock could trade higher than the BHP offer price. We’d wait for a price around A$25/share to enter.

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Aug 08
0

Daily Brief Health Care: Mesoblast Ltd, Eisai Co Ltd, Shandong Weigao Orthopaedic and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Mesoblast (MSB AU): Trading Halt; Decreased Net Cash Usage in Q4; Positive Clinical Trial Results
  • Make Us Consider the Issues on Anti-Takeover in a Company with Reduced Stake of Founding Family
  • Shandong Weigao Orthopaedic – 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable

Mesoblast (MSB AU): Trading Halt; Decreased Net Cash Usage in Q4; Positive Clinical Trial Results

By Tina Banerjee

  • Mesoblast Ltd (MSB AU) shares have been put on trading halt on August 4 due to pending announcement on private placement. The company undertook last private placement in March 2021.
  • Net operating cash usage has been declining over the last six quarters. In Q4FY22, net cash usage for operating activities decreased 33% y/y to $13.9 million.
  • Last month, Mesoblast announced promising results from rexlemestrocel-L trial in chronic heart failure patients. Rexlemestrocel-L delivered an improvement in left ventricular ejection fraction at 12 months.

Make Us Consider the Issues on Anti-Takeover in a Company with Reduced Stake of Founding Family

By Aki Matsumoto

  • Eisai, which had more than 30% of foreign shareholdings, had retained anti-takeover measures while incorporating the opinions of foreign shareholders, and has background of seeking reconciliation through enhancing its governance.
  • While foreign shareholders had voted against Mr. Naito, president who retained anti-takeover provision, most Japanese shareholders had voted in favor, showing “support” him at the shareholders’ meeting.
  • It’s likely that Eisai will retain “contingency” anti-takeover, but if the founding family will use it to retain its position, this isn’t consistent with the goal of maximizing corporate value.

Shandong Weigao Orthopaedic – 2022 Is the Real Test. Short-Term Performance Pressure Is Inevitable

By Xinyao (Criss) Wang

  • Although Weigao achieved solid growth in 2021 after pandemic was under control,the real test will come in 2022. The implementation of centralized procurement will have a significant impact on performance.
  • After spinal implants are included in centralized procurement this year, all of Weigao’s three major businesses (spinal implants/trauma implants/joint implants) are within the scope. Short-term performance pressure is inevitable.
  • As a result of the pandemic/lockdown in 2022H1, we lowered our performance forecast on Weigao.   

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Aug 08
0

Daily Brief Consumer: Lifestyle International Holdings, Yashili International Holdings, Marui Group and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Lifestyle International’s HK$5.00 Privatisation Bid
  • Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation
  • Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai
  • Lifestyle (1212 HK): Thomas Yau’s Scheme

Lifestyle International’s HK$5.00 Privatisation Bid

By Arun George

  • Lifestyle International Holdings (1212 HK) announced a privatisation offer from Mr Lau, the controlling shareholder and Chairman, at HK$5.00 per scheme share, a 62.3% premium to the undisturbed price.
  • The offer price is final. Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). No shareholder holds a blocking stake.
  • The offer price is unattractive for long-term shareholders and below average sell-side price targets. Nevertheless, this deal likely goes through as the headcount test is not applicable.

Merger Arb Mondays (08 Aug) – Yashili, Lifestyle, Link, Infomedia, Ramsay, ResApp, Alliance Aviation

By Arun George

Marui (8252 JP) – Increases Size of Delayed-Start Buyback, Cuts Yutai

By Travis Lundy

  • Marui Group (8252 JP) was a long-suffering Japanese retailer with generally sub-standard locations and “different” customer base, and much of its income came from consumer credit. 
  • Since a decade ago, helped by the rise of foreign tourism income, Marui has been redeveloping itself. Michael Causton‘s insights are a great help to understanding the background. 
  • They are aiming at non-stuff retailing. Friday saw earnings, cancellation of the yutai program, a slight div hike, and an increase in the already large buyback program. It’s interesting!

Lifestyle (1212 HK): Thomas Yau’s Scheme

By David Blennerhassett

  • Thomas Yau, Lifestyle International Holdings (1212 HK)‘s controlling shareholder, is offering to take the company private by way of a Scheme at HK$5/share, a 62.3% premium to last close.  
  • Independent shareholders comprise 23.51% of shares out, therefore the blocking stake at the forthcoming Court Meeting is 2.351% of shares out. 
  • The Offer price is final. No dividends will be paid during the Offer period.

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  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Aug 08
0

Daily Brief Financials: Paypal Holdings, Dongzheng Automotive Finance, Decentraland, Shui On Land and more

By | Daily Briefs, Financials

In today’s briefing:

  • PayPal: Elliott Sees Opportunity, So Do We
  • SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO
  • Decentraland
  • Morning Views Asia: ENN Natural Gas, Lifestyle International Holdings, Road King Infrastructure

PayPal: Elliott Sees Opportunity, So Do We

By Aaron Gabin

  • Elliott Management has bought a $2B stake in PayPal and seeks cost cutting measures.
  • PayPal has started to take action through cost cutting, a new buyback, new organizational measures, and increased focus on revenue strategy.
  • The wild card that would get us more bullish is Elliott forcing a merger with Pinterest, which would yield a readymade Dan Schulman replacement in Bill Ready.

SAIC Completes Dongzheng Stake Acquisition, Unconditional MGO

By Arun George

  • SAIC Motor (600104 CH) completed the auction procedures for acquiring a 71.04% stake in Dongzheng Automotive Finance (2718 HK). This will trigger an unconditional MGO at HK$1.2430 per H Share.
  • The offeror and Dongzheng are required to issue the composite document on or before 11 August jointly. However, an application has been made to the Executive to extend the deadline. 
  • At last close and for an end of September completion, the gross and annualised spread to the MGO price is 3.6% and 20.9%, respectively.

Decentraland

By Etherbridge

  • At the beginning of last year, we wrote about the idea of a Metaverse and what it may look like.
  • Little did we know there would be such excitement and adoption within 2021 alone, with even huge companies like Facebook changing their name to Meta.
  • This brought the idea of a Metaverse into the mainstream as nothing had before; it also catapulted two of the largest blockchain-based Metaverses, Decentraland and The Sandbox, into the limelight and significantly increased user adoption of the networks.

Morning Views Asia: ENN Natural Gas, Lifestyle International Holdings, Road King Infrastructure

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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