Smartkarma Daily Briefs

Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.

FXI ETF: Potential Changes in the Year of the Snake

There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.

Merger Arb Mondays (03 Feb) – ESR, LifeStyle China, Vesync, Giga Prize, Sanyo, Ascot, Seven & I

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Chuoh Pack Industry (3952 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Ascot Corp (3264 JP), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP).
Lowest spreads: Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Macromill, Inc (3978 JP), Millennium & Copthorne Hotels Nz (MCK NZ).

Chuoh Pack Industry (3952 JP): NIKKON (9072 JP) Offer’s 273% Premium Results from an Auction

Chuoh Pack Industry (3952 JP) has recommended Nikkon Holdings (9072 JP)’s tender offer at JPY5,034, a 273.2% premium to the last close.
The extraordinary premium resulted from a competitive auction, enabling Toyota Motor (7203 JP), the largest shareholder, to sell most of its stake.
The offer is well above the target IFA’s DCF valuation range and more than double the all-time high. Stating the obvious, this is a done deal.

Weekly Deals Digest (02 Feb) – NTT UD REIT, Sanyo, Ascot, Giga Prize, Lifestyle China, Dada, LG CNS

By Research as a Service (RaaS)

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million, and Guming Holdings (GUM HK) seeks to raise US$300 million.
Event-Driven developments: NTT UD REIT Investment Corporation (8956 JP), Ascot Corp (3264 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Lifestyle China (2136 HK), Dada Nexus (DADA US).

Fosun Tourism (1992 HK): No Love For The Scrip Alternative

By David Blennerhassett

Back on the 10th December 2024, Fosun Tourism (1992 HK) announced a rare Scheme buyback, with a Cancellation Price of $7.80/share (not declared final), a punchy 95% premium to undisturbed.
A successful Scheme would result in Fosun International (656 HK) and concert parties holding 100% in Fosun Tourism – without having to outlay a cent.
A scrip alternative was afforded IF expressions of interests from 1% of shares out occurred. That didn’t happen. Still a clean deal. Scheme Doc dispatch is the 14th Feb.

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Feb 03

Daily Brief Equity Bottom-Up: Unloved Japan Round-Up: Some Massive Results Surprises and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

Unloved Japan Round-Up: Some Massive Results Surprises
Fosun Tourism (1992 HK): Affirming Our Support for the Buyback
SCREEN: Moderate ~teens Growth Outlook but the Stock Is Cheap
HONG KONG ALPHA PORTFOLIO (January 2025)
Empire Energy Group Ltd – Beetaloo catalysts coming in a rush
Seria Co Ltd (2782 JP): Q3 FY03/25 flash update
Yellow Hat Ltd (9882 JP): Q3 FY03/25 flash update

Unloved Japan Round-Up: Some Massive Results Surprises

By Michael Allen

Lixil increased operating profit by 15.7% YoY, to ¥20.6bn, compared to consensus estimates for an 18% decline. The stock trades at 80% of book value.
TEPCO earned ¥112bn compared to a consensus forecast of a ¥3bn loss. It trades at 35% of book value.
Lasertec increased EBIT by 122% to ¥47.7bn compared to consensus estimates for ¥27bn, and the stock trading at the lowest multiples relative to Topix in seven years.

Fosun Tourism (1992 HK): Affirming Our Support for the Buyback

By Osbert Tang, CFA

Fosun Tourism (1992 HK)‘s profit warning suggested a significant deterioration in profitability in 2H24, fading any near-term recovery hope.
With losses enlarged 89-126% YoY in 2H24, it is more difficult to return to its peak and IPO share prices. This makes the buyback proposal even more attractive.
We take the inability to introduce the Potential Share Alternative Option as a lack of confidence by the existing shareholders in Fosun Tourism’s medium-term outlook.

SCREEN: Moderate ~teens Growth Outlook but the Stock Is Cheap

By Nicolas Baratte

Big Dec-24 due to China. Mar-25 will be weaker. FY26 growth will come only from TSMC and HBM. After a strong FY25 (~30% growth), FY26 should see growth at 10-15%.
Accounting concerns should be over after the publication of the audit report on Jan 14 2025. The stock has started appreciating since early Jan 2025.
Valuations are low. The stock is trading at ~11x FY26 EPS. A muted Mar-25 could limit the upside short-term, let’s wait.

HONG KONG ALPHA PORTFOLIO (January 2025)

By David Mudd

HK Alpha Portfolio returned -1.29% in December and outperformed the benchmark by 0.34%. The portfolio has outperformed Hong Kong indexes by 7.93% to 9.64% since its inception on 10/01/24.
About 75% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy or Materials.
At month-end we sold China Cinda Asset Management (1359 HK) , Citic Ltd (267 HK) , China Galaxy Securities (H) (6881 HK) and GDS Holdings (9698 HK) .

Empire Energy Group Ltd – Beetaloo catalysts coming in a rush

RaaS has published an update report on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following its recent quarterly report and operational update.
The company is poised to commence the last phases of activity on the path to project startup.
Having successfully cased and cemented the Carpentaria-5H (C-5H) well above expectation on time and horizontal section, securing debt financing and NT environmental approvals, we await the commencement of testing post the wet season and the granting of the ‘Beneficial Use of Test Gas’ agreement, with the traditional owners, which formally approves commercial gas sales.

Seria Co Ltd (2782 JP): Q3 FY03/25 flash update

Sales reached JPY178.0bn, a 7.0% YoY increase, with directly managed stores contributing 98.9% of total sales.
Operating profit rose 16.9% YoY to JPY13.2bn, while net income increased 18.3% YoY to JPY8.9bn.
The company opened 84 directly managed stores and closed 49, totaling 2,056 stores by end-Q3 FY03/25.

Yellow Hat Ltd (9882 JP): Q3 FY03/25 flash update

By Research as a Service (RaaS)

Yellow Hat’s cumulative Q3 FY03/25 sales increased 4.9% YoY to JPY119.1bn, with operating profit up 9.6% YoY.
The medium-term plan targets FY03/28 revenue of JPY180.0bn, operating profit of JPY16.8bn, and net income of JPY11.8bn.
Planned investment of JPY33.0bn from FY03/26 to FY03/28 includes JPY28.0bn in capex and JPY5.0bn for M&A.

Before it’s here, it’s on Smartkarma

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

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Feb 03

Daily Brief Macro: India: A Budget to Revive PCE and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

India: A Budget to Revive PCE, Labour-Intensive Exports & Urban Governance
US Exceptionalism Not Totally Attributable to Information Technology
Can the Stock Market Vigilantes Save the Bull?
A Long-Term Sell Signal?
Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production
Strong Consumer Spending Lead to Modest U.S. Q4 GDP
Brazil Risk Premia
India Needs a Better Debt Reduction Plan

India: A Budget to Revive PCE, Labour-Intensive Exports & Urban Governance

By Prasenjit K. Basu

Substantial reduction of tax rates for all income-tax payers will provide a robust boost to private consumption (PCE) in FY26, while reduction/rationalisation of customs duties boosts FDI and exports, medium-term.
Commitment to reduce public debt to 47% of GDP by FY31, and taking FY26 fiscal deficit to 4.4% of GDP, likely to be met comfortably, as nominal GDP outperforms assumptions.
Major support to labour-intensive exports (including tourism), and incentives for states to improve urban governance and power distribution, are forward-looking measures, as are bolsters for battery manufacturing.

US Exceptionalism Not Totally Attributable to Information Technology

By Said Desaque

DeepSeek’s recent launch of a free-to-air artificial intelligence app without the need for high computer processing power has raised concerns about American technological superiority in the realm of AI.
While technology made significant contributions to US equity outperformance due to very high operating margins, other sectors have contributed via shifting investor preferences towards entities that deploy capital more efficiently.
Fiscal prudence rules in the Eurozone could undermine the region’s economic outlook. Cautious private sector activity in Germany undermines potential growth, boosting the attraction of US investment by German companies.

Can the Stock Market Vigilantes Save the Bull?

By Cam Hui

The current environment suggests that traders should adopt a strategy of “buy the dip and sell the rips”.
The combination of negative surprises during earnings season and potential bearish policy announcements when the market is overbought will put downward pressure on stock prices.
On the other hand, investors should trust the stock market vigilantes to activate the Trump Put in the event of a market downdraft.

A Long-Term Sell Signal?

By Cam Hui

Breadth indicators are flashing early cautionary signals for U.S. equities, but these signals can often be early in calling a major market top.
A review of other indicators on different investing dimensions are either benign or cautious.
We interpret this as the warning of a possible major market top in Q1 or Q2. Investors should monitor risk appetite indicators for tactical signs to turn cautious.

Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production

By Sameer Taneja

Fenix Resources (FEX AU) delivered impressive results for Q2 2025. Sales increased by 71% QoQ and 68% YoY, driven by the ramp-up of the Shine iron ore mine.
The Beebyn-W11 mine, projected to ramp up production to 4 million tonnes from the current 2.5 million tonnes, is anticipated to receive final mining approval in the current quarter.
Trading at 5.9x FY25e PE with 57 mn AUD in net cash, which accounts for 27% of its market capitalization, the stock is worth a look.

Strong Consumer Spending Lead to Modest U.S. Q4 GDP

By Alex Ng

The 2.3% increase in Q4 GDP is little weaker than consensus expectations surveyed. But the data was supported by a significantly stronger than expected 4.2% rise in consumer spending
Consumption keeps the pace of growth solid. Core PCE prices at 2.5% are on consensus, showing inflationary pressures moderately above target.
Final sales rose by 3.2%, meaning a negative of 0.9% from inventories, and weak inventory growth in Q4 provides potential for a bounce in Q1 2025.

Brazil Risk Premia

By Alex Ng

Brazil debt market has two domestic crises including inflation and fiscal policy, rather than a spillover from the U.S.
Restrictive BCB policy helps produce some disinflation, which allows some rate cuts in H2. Brazil risk premium will likely be reduced latter in the year if a narrower bond spread.
However, Brazil crisis over fiscal policy would not be fixed, which is the 2 precondition for a more dramatic narrowing of bond spreads versus the U.S.

India Needs a Better Debt Reduction Plan

By Priyanka Kishore

Despite the income tax cut, the FY26 budget is likely to be contractionary.
Continued fiscal consolidation could require some costly trade-offs, if the recent budgets are any indication.
To achieve the planned fiscal consolidation without significantly impacting growth, the government needs to re-assess the expenditure mix.

Before it’s here, it’s on Smartkarma

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

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Feb 03

Daily Brief Australia: Iron Ore, Empire Energy and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production
Empire Energy Group Ltd – Beetaloo catalysts coming in a rush

Fenix Resources (FEX AU) Q2 FY25 Update: Close to Tripling Production

By Sameer Taneja

Fenix Resources (FEX AU) delivered impressive results for Q2 2025. Sales increased by 71% QoQ and 68% YoY, driven by the ramp-up of the Shine iron ore mine.
The Beebyn-W11 mine, projected to ramp up production to 4 million tonnes from the current 2.5 million tonnes, is anticipated to receive final mining approval in the current quarter.
Trading at 5.9x FY25e PE with 57 mn AUD in net cash, which accounts for 27% of its market capitalization, the stock is worth a look.

Empire Energy Group Ltd – Beetaloo catalysts coming in a rush

RaaS has published an update report on NT-focused gas explorer/producer Empire Energy Group (ASX:EEG) following its recent quarterly report and operational update.
The company is poised to commence the last phases of activity on the path to project startup.
Having successfully cased and cemented the Carpentaria-5H (C-5H) well above expectation on time and horizontal section, securing debt financing and NT environmental approvals, we await the commencement of testing post the wet season and the granting of the ‘Beneficial Use of Test Gas’ agreement, with the traditional owners, which formally approves commercial gas sales.

Before it’s here, it’s on Smartkarma

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

Feb 03

Daily Brief South Korea: Legochem Biosciences, LG CNS and more

By Smartkarma Daily Briefs | Daily Briefs, South Korea

In today’s briefing:

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual
ECM Weekly (3rd Feb 2025) – Seoul Guarantee, Dr Agarwal’s, Ather Energy, Hexaware, Visen Pharma

KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual

The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.

ECM Weekly (3rd Feb 2025) – Seoul Guarantee, Dr Agarwal’s, Ather Energy, Hexaware, Visen Pharma

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, we had a look at the valuations for Dr. Agarwal’s Eye Hospital and Seoul Guarantee Insurance (031210 KS).
On the placements front, given the holiday shortened week, there were no placements this week.

Before it’s here, it’s on Smartkarma

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

Feb 03

Daily Brief China: iShares China Large-Cap (FXI), ESR Group , Fosun Tourism, Sunny Optical Technology Group, Bama Tea, PegBio and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

FXI ETF: Potential Changes in the Year of the Snake
Merger Arb Mondays (03 Feb) – ESR, LifeStyle China, Vesync, Giga Prize, Sanyo, Ascot, Seven & I
Fosun Tourism (1992 HK): Affirming Our Support for the Buyback
Fosun Tourism (1992 HK): No Love For The Scrip Alternative
HONG KONG ALPHA PORTFOLIO (January 2025)
Bama Tea Pre-IPO Tearsheet
Pre-IPO PegBio Co., Ltd. (PHIP Updates) – Some Points Worth the Attention

FXI ETF: Potential Changes in the Year of the Snake

There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.

Merger Arb Mondays (03 Feb) – ESR, LifeStyle China, Vesync, Giga Prize, Sanyo, Ascot, Seven & I

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Chuoh Pack Industry (3952 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Ascot Corp (3264 JP), Lifestyle China (2136 HK), Seven & I Holdings (3382 JP).
Lowest spreads: Makino Milling Machine Co (6135 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Macromill, Inc (3978 JP), Millennium & Copthorne Hotels Nz (MCK NZ).

Fosun Tourism (1992 HK): Affirming Our Support for the Buyback

By Osbert Tang, CFA

Fosun Tourism (1992 HK)‘s profit warning suggested a significant deterioration in profitability in 2H24, fading any near-term recovery hope.
With losses enlarged 89-126% YoY in 2H24, it is more difficult to return to its peak and IPO share prices. This makes the buyback proposal even more attractive.
We take the inability to introduce the Potential Share Alternative Option as a lack of confidence by the existing shareholders in Fosun Tourism’s medium-term outlook.

Fosun Tourism (1992 HK): No Love For The Scrip Alternative

By David Blennerhassett

Back on the 10th December 2024, Fosun Tourism (1992 HK) announced a rare Scheme buyback, with a Cancellation Price of $7.80/share (not declared final), a punchy 95% premium to undisturbed.
A successful Scheme would result in Fosun International (656 HK) and concert parties holding 100% in Fosun Tourism – without having to outlay a cent.
A scrip alternative was afforded IF expressions of interests from 1% of shares out occurred. That didn’t happen. Still a clean deal. Scheme Doc dispatch is the 14th Feb.

HONG KONG ALPHA PORTFOLIO (January 2025)

By David Mudd

HK Alpha Portfolio returned -1.29% in December and outperformed the benchmark by 0.34%. The portfolio has outperformed Hong Kong indexes by 7.93% to 9.64% since its inception on 10/01/24.
About 75% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy or Materials.
At month-end we sold China Cinda Asset Management (1359 HK) , Citic Ltd (267 HK) , China Galaxy Securities (H) (6881 HK) and GDS Holdings (9698 HK) .

Bama Tea Pre-IPO Tearsheet

By Nicholas Tan

Bama Tea (BAMA HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by Huatai, ABC and TF International.
Bama Tea, as per the firm, is the most recognized tea brand in China and the leading provider of premium tea leaves in China.
It sells through its nationwide offline store network and comprehensive online sales platforms, and sells every major tea leaf category

Pre-IPO PegBio Co., Ltd. (PHIP Updates) – Some Points Worth the Attention

By Xinyao (Criss) Wang

The market’s expectations for GLP-1 have changed, and the sales growth of GLP-1 may enter a turning point, which would cast a shadow over the prospects of PegBio’s GLP-1 pipelines.
PB-119 would be the first commercialized product for PegBio. However, this market is highly crowded. It’s highly uncertain whether PB-119 can stand out from fierce market competition after its launch.
The post investment valuation has reached RMB4 billion, which is already expensive in our view. Due to poor valuation performance of peers, we are not optimistic about PegBio after IPO.

Before it’s here, it’s on Smartkarma

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

Feb 03

Daily Brief India: Indusind Bank and more

By Smartkarma Daily Briefs | Daily Briefs, India

In today’s briefing:

India: Potential Free Float Changes & Passive Flows in February

India: Potential Free Float Changes & Passive Flows in February

Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.

Before it’s here, it’s on Smartkarma

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

Feb 03

Daily Brief Japan: Osaka Steel, Lasertec Corp, Chuoh Pack Industry, NTT UD REIT Investment Corporation, SCREEN Holdings, TSE Tokyo Price Index TOPIX, Seria Co Ltd, Yellow Hat Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Japan

In today’s briefing:

Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists
Unloved Japan Round-Up: Some Massive Results Surprises
Chuoh Pack Industry (3952 JP): NIKKON (9072 JP) Offer’s 273% Premium Results from an Auction
Weekly Deals Digest (02 Feb) – NTT UD REIT, Sanyo, Ascot, Giga Prize, Lifestyle China, Dada, LG CNS
SCREEN: Moderate ~teens Growth Outlook but the Stock Is Cheap
Easier to Raise Listing Criteria, but More Difficult to Encourage Growth of Companies Already Listed
Seria Co Ltd (2782 JP): Q3 FY03/25 flash update
Yellow Hat Ltd (9882 JP): Q3 FY03/25 flash update

Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists

By Travis Lundy

Osaka Steel (5449 JP) is 65% owned by Nippon Steel Corporation (5401 JP). They make a relatively simple set of steel products used by shipbuilders, construction companies, and warehouse builders.
Activist Effissimo Capital went over 5% in October 2016 and is still a top holder. Activist Strategic Capital went over 5% in December 2023 and now owns 10+% of votes.
The “hope” had been that Nippon Steel buy out minorities and Osaka Steel would be rescued from mediocre capital returns. That was not to be. Activists are disappointed.

Unloved Japan Round-Up: Some Massive Results Surprises

By Michael Allen

Lixil increased operating profit by 15.7% YoY, to ¥20.6bn, compared to consensus estimates for an 18% decline. The stock trades at 80% of book value.
TEPCO earned ¥112bn compared to a consensus forecast of a ¥3bn loss. It trades at 35% of book value.
Lasertec increased EBIT by 122% to ¥47.7bn compared to consensus estimates for ¥27bn, and the stock trading at the lowest multiples relative to Topix in seven years.

Chuoh Pack Industry (3952 JP): NIKKON (9072 JP) Offer’s 273% Premium Results from an Auction

Chuoh Pack Industry (3952 JP) has recommended Nikkon Holdings (9072 JP)’s tender offer at JPY5,034, a 273.2% premium to the last close.
The extraordinary premium resulted from a competitive auction, enabling Toyota Motor (7203 JP), the largest shareholder, to sell most of its stake.
The offer is well above the target IFA’s DCF valuation range and more than double the all-time high. Stating the obvious, this is a done deal.

Weekly Deals Digest (02 Feb) – NTT UD REIT, Sanyo, Ascot, Giga Prize, Lifestyle China, Dada, LG CNS

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: LG CNS (LGCNSZ KS) seeks to raise up to US$837 million, and Guming Holdings (GUM HK) seeks to raise US$300 million.
Event-Driven developments: NTT UD REIT Investment Corporation (8956 JP), Ascot Corp (3264 JP), Giga Prize (3830 JP), Sanyo Special Steel (5481 JP), Lifestyle China (2136 HK), Dada Nexus (DADA US).

SCREEN: Moderate ~teens Growth Outlook but the Stock Is Cheap

By Nicolas Baratte

Big Dec-24 due to China. Mar-25 will be weaker. FY26 growth will come only from TSMC and HBM. After a strong FY25 (~30% growth), FY26 should see growth at 10-15%.
Accounting concerns should be over after the publication of the audit report on Jan 14 2025. The stock has started appreciating since early Jan 2025.
Valuations are low. The stock is trading at ~11x FY26 EPS. A muted Mar-25 could limit the upside short-term, let’s wait.

Easier to Raise Listing Criteria, but More Difficult to Encourage Growth of Companies Already Listed

By Aki Matsumoto

There is a need to change the mindset of company managers who consider IPO as a goal and not a way to grow after the listing.
The listing criteria for TSE Growth Market will be raised as early as April 2026. It’s clear that the current listing criteria are far from liquid enough to invest in.
For companies that are already listed, some rule should be established to either de-list them because they cannot bear the listing cost or to increase their market capitalization through M&As.

Seria Co Ltd (2782 JP): Q3 FY03/25 flash update

Sales reached JPY178.0bn, a 7.0% YoY increase, with directly managed stores contributing 98.9% of total sales.
Operating profit rose 16.9% YoY to JPY13.2bn, while net income increased 18.3% YoY to JPY8.9bn.
The company opened 84 directly managed stores and closed 49, totaling 2,056 stores by end-Q3 FY03/25.

Yellow Hat Ltd (9882 JP): Q3 FY03/25 flash update