In today’s briefing:
- Tsuruha (3391) And Welcia (3141) To Move UP Merger to End-2025; Makes It TWO Trades in 18mos?
- Vesync (2148 HK): 33.3% Premium For An Illiquid Arb – Yep, This Is Done.
- Vesync (2148 HK): Proposed Privatisation at HK$5.60 Fair and Reasonable
- Sumber Alfaria Trijaya (AMRT IJ) – Primed for Profitable Growth in 2025
- Pre-IPO Bloks Group (PHIP Updates) – Some Points Worth the Attention
Tsuruha (3391) And Welcia (3141) To Move UP Merger to End-2025; Makes It TWO Trades in 18mos?
- In Feb-24, Aeon (8267) agreed with Oasis Management to buy its stake in Tsuruha Holdings (3391) and Tsuruha and Welcia Holdings (3141) would discuss a merger, details decided by end-2027.
- On Saturday 27 December, a Jiji article said the two would look to integrate by end-2025, now that they no longer need SEC approval. That reason sounds wrong.
- The language of the articles is odd but we have to take it at face value. That means we look to what might happen between here and there.
Vesync (2148 HK): 33.3% Premium For An Illiquid Arb – Yep, This Is Done.
- When Vesync (2148 HK), a manufacturer of small home appliances, was suspended pursuant to the Takeovers Code, an Offer from the Yang family, led by chairman/CEO, controlling ~69.04%, was expected.
- And on cue, that is what unfolded. HK$5.60/share, a premium of 33.33%, by way of a Scheme. The price is final. A scrip option afforded. No dividends.
- The blocking stake is 1.675%. Expect around fourth months to complete. This is done.
Vesync (2148 HK): Proposed Privatisation at HK$5.60 Fair and Reasonable
- Vesync (2148 HK)‘s major shareholders proposed to privatise at HK$5.60, a 33.3% premium to the pre-suspension price. This is the same as we calculated using the 3-year average P/B.
- At such a price, it will sit at 7.6x PER for FY25F, a level that it only touched briefly 3 times in the last two years.
- This PER is at a 25-30% discount to the sector and justified by its smaller size and lesser diversification. All in all, the proposed price looks fair and reasonable.
Sumber Alfaria Trijaya (AMRT IJ) – Primed for Profitable Growth in 2025
- Sumber Alfaria Trijaya (Alfamart) looks well set for a strong finish to the year boosted by seasonal factors and a higher quarter for supplier rebates making it the peak quarter.
- The company should be able to surpass its guidance for new store build-out in 2024, emphasising Alfamart and Alfamidi outlets, as it consolidates its Lawson rollout.
- Alfamart saw strong growth from online sales through Alfagift at +45% YoY, with Alfamart members reaching 20m, with 65% shopping every week. Valuations remain attractive with strong growth in 2025.
Pre-IPO Bloks Group (PHIP Updates) – Some Points Worth the Attention
- The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.
- Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.
- Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.
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