
In today’s briefing:
- Piolax (5988 JP) – Murakami-San Gets BIG Buyback Tender Offer
- Asian Equities: It’s China’s Year – Our “China Twelve” In the Year of the Snake
- StubWorld: Melco Is Trading Too Tight
- Companies with More Cash on Hand Are Expected to Use Cross-Shareholdings to Repurchase Shares
- Digiplus Interactive (PLUS PM): FY24 Earnings Preview, Cheap Despite Quadrupling Since Jan 2024
- Dhampur Bio Organics Limited: Q3 & 9M FY25 Quarterly Update
- Megmilk Snow Brand (2270 JP): Q3 FY03/25 flash update
- Morinaga Milk Industry Co (2264 JP): Q3 FY03/25 flash update
- JP-HOLDINGS, INC. (2749 JP): Q3 FY03/25 flash update
- Globus Spirits Limited Q3 FY25: Navigating Cost Pressures & Charting Future Growth

Piolax (5988 JP) – Murakami-San Gets BIG Buyback Tender Offer
- Piolax Inc (5988 JP) is a small, low ROE, over-capitalised autoparts maker mostly making low-moat parts, but they sell A LOT of them. About a gajillion.
- They started 100% div payout ratios 3yrs ago, and last year started a new MTMP to pay out 100% and then buy back a lot of stock. Murakami bought 10%.
- In November they launched a big buyback. Now they are launching a 23.78% Tender Offer Buyback where Murakami-san will sell. Big accretion on forward expectations downgrades. Hmmm…
Asian Equities: It’s China’s Year – Our “China Twelve” In the Year of the Snake
- We believe in 2025 HK/China shall outperform EM. While the undervalued and under-owned characteristic of the China market is well-known, monetizability of China’s technological capabilities has become apparent only recently.
- Policy stimuli during the upcoming NPC could catalyze consumer sentiment and market performance. China’s structural hurdles, Debt, Demographics and Deflation, remain. But correct stock and sector selection can generate alpha.
- We prefer the internet platforms, consumer discretionary and high dividend yield, the latter largely SOEs. Our “China Twelve” are mostly reasonably valued (low teen PE), with double digit EPS growth.
StubWorld: Melco Is Trading Too Tight
- At an 8% discount to NAV, Melco International Development (200 HK) is trading too tight for what is a simple holding company structure.
- Preceding my comments on Melco are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Companies with More Cash on Hand Are Expected to Use Cross-Shareholdings to Repurchase Shares
- Stock sale allows brokers to pass on to the company the attraction of being able to diversify its shareholders, and the cross-shareholding sales scheme allows them to obtain higher commissions.
- One of the solutions that companies have come up with in the absence of improved return on capital is to reduce their policy shareholdings.
- The use of share repurchases to buy back cross-shareholdings is a very good way to improve return on capital because it also reduces the amount of cash on hand.
Digiplus Interactive (PLUS PM): FY24 Earnings Preview, Cheap Despite Quadrupling Since Jan 2024
- DigiPlus Interactive (PLUS PM) has seen remarkable performance lately, with its share price increasing by 20% this month, 32% YTD, and 300% since January 2024.
- The share price performance is driven by optimism over the company’s shortlisting for a Brazilian operating license and a recent broker upgrade with a bold price target of 55.4 pesos.
- Currently trading at 13.7x and 10.5x FY24/25 PE with an ROCE exceeding 35%, we anticipate the next catalyst will be the company’s strong FY24 earnings report in April.
Dhampur Bio Organics Limited: Q3 & 9M FY25 Quarterly Update
- Dhampur Bio Organics (DBOL IN)’ Q3 FY25 revenue surged 74.33% YoY, fueled by robust sugar and country liquor performance amid increased sales volumes.
- The significant revenue growth indicates strong market demand and positions DBO to transition toward value-added sugar production, mitigating commodity risks.
- Despite operational challenges and declining EBITDA margins, DBO’s strategic focus on premiumization and improved cane development underscores resilient long-term growth potential.
Megmilk Snow Brand (2270 JP): Q3 FY03/25 flash update
- Megmilk Snow Brand’s cumulative Q3 FY03/25 revenue was JPY469.7bn (+2.0% YoY), with operating profit at JPY16.3bn (+0.0% YoY).
- Dairy Products segment revenue reached JPY197.8bn (+1.5% YoY), while operating profit was JPY8.0bn (+0.7% YoY).
- Beverages and Desserts segment revenue totaled JPY203.8bn (+3.8% YoY), with operating profit at JPY5.5bn (+0.4% YoY).
Morinaga Milk Industry Co (2264 JP): Q3 FY03/25 flash update
- Cumulative Q3 FY03/25 sales were JPY430.7bn (+1.8% YoY), with operating profit at JPY2.5bn (-8.9% YoY).
- Net income fell by 76.5% YoY due to reduced operating and recurring profits and absence of prior extraordinary gains.
- Sales increased across all business segments, but operating profits declined due to rising costs and promotional expenses.
JP-HOLDINGS, INC. (2749 JP): Q3 FY03/25 flash update
- Revenue increased by 6.5% YoY, with operating profit and recurring profit growing 25.5% and 28.1% YoY, respectively.
- The company opened 20 new facilities, including nurseries and after-school clubs, expanding its child-rearing support facilities.
- Net income attributable to owners rose 36.6% YoY, driven by increased child enrollment and revised staffing ratios.
Globus Spirits Limited Q3 FY25: Navigating Cost Pressures & Charting Future Growth
- Globus Spirits (GBSL IN)’ Q3 FY25 performance saw a 12.5% YoY revenue decline and significant cost pressures, while its consumer segment, especially luxury posted remarkable double-digit growth.
- After reduction of FCI price, Company anticipate achieving margins of Rs. 5-7 per liter from ethanol, aiming for a long-term average of Rs. 7 per liter.
- From Q4 onwards, manufacturing segment will also perform well along with growth in the consumer segment as well.