Consumer

• Discounts likely set for a re-rating as market continues to overreact to appointment of CEO amid good set of results.
• The discounts of both Naspers and Prosus have continued to widen since the appointment of Fabricio Bloisi to Group CEO was announced in May (effective 10 July).
• At the end of June, the group released its strongest set of results in years, delivering on consolidated ecommerce profitability ahead of target.

• A group of shareholders aims to raise around US$1.3bn via selling around 11% of ASICS Corp (7936 JP).
• In our earlier note, we talked about the placement and ran the deal through our ECM framework.
• In this note, we talk about the updates and share price performance since then.

• 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, the coming week  to see two more listing, with both likely to do well.
• On the placement front, Japan continued to dominate the ECM flows, with India, Taiwan and Australia joining in.

• Blue Moon started with a kitchen spray cleanser in 1994, but now focuses on liquid detergents in China
• While they have strong marketing and scale, their competitive advantages are weak compared to domestic competitor Liby
• Intensifying competition and various factors have led to a decline in Blue Moon’s market share, raising uncertainty about their future in the industry

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• Alimentation Couche-Tard is a global leader in convenience stores and gas stations, with a stable and recession-resistant business model.
• The company has a strong management team focused on consolidating the fragmented c-store industry and generating solid free cash flow.
• ATD stock is trading at a reasonable multiple with potential for mid-teens FCF per share growth, making it an attractive long-term investment opportunity.

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• The fact that institutional investors consider whether a company has zero female board members when voting has led to decrease in the number of companies with zero female board members.
• Since fewer companies have zero female board members but a minority of companies have at least two female board members, achieving 30% female board members seems somewhat of a hurdle.
• While tenure and concurrent service of female board members are problematic, the starting point is to ensure that women have  a 30% voice on the board and to promote diversity.

• News show that European car makers such as BMW is moving out of China, leaving the Auto market to the local players
• Stocks like Brilliance China will suffer losses as they lose some of the most famous co-brand.
• Foreign firm exits may give relief to local auto makers as it resolves part of the over-capacity problems

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• Thai Beverage (THBEV SP)‘s proposed swap deal with promoter company raises several questions for shareholders. Start with the back story about how Fraser And Neave (FNN SP) joined the group.
• Bigger weddings could become a trend in India – Read why we like Kalyan Jewellers(KALYANKJ IN) . Also, household debt in Thailand as % of GDP is highest in ASEAN.

• I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals discussed this week on Smartkarma: Samson Holding (531 HK)‘s Scheme, and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
• Key updates took place on Capitol Health (CAJ AU), Alumina (AWC AU), Ansarada (AND AU), TCM (570 HK), CPMC  (906 HK), Fancl (4921 JP),and Hollysys Automation Technologies (HOLI US).

• Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. 
• Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  
• Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. 

• Share price under pressure due to industry challenges and transition of new product line-ups.  
• 2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth. 
• LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow. 

• Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.  
• There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward. 
• Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY. 

• Thai Beverage(THBEVSP)‘s  proposed swap deal involves acquiring a 41.3% stake in F&N from promoters, seemingly at book value than fair market value, expected in case of an arms length transaction.
• Fraser And Neave (FNN SP)  holds a 20.3% stake in Vietnam Dairy(VNM VN), Vietnam’s leading dairy player, which is now trading at nearly a 40% discount to the investment value.
• Understanding TCC Assets’ ownership history of F&N may help clarify the deal’s valuation rationale.

• We spoke with multiple channels covering 3Ws, 2Ws, and 4Ws to understand the current dynamics of the Electric Vehicle (EV) scene in India.
• Adoption of E-3 and E-4 Wheelers is hindered by high prices, range issues, inadequate charging infrastructure, and platform stability concerns.
• E-2 Wheelers show resilience with stable sales led by aggressive pricing from Ola Electric (1700674D IN). 

• Early 6/18 pulled June sales into May, leading to disappointing June NBS data. Combined, online retail grew 5.1% yoy in May/June, and 6.4% yoy in 2Q24. 
• PDD remained the top shelf-ecommerce platform with GMV growing ~20%, followed by Taobao/Tmall (TTG) at ~6-7%, and JD and VIPS at ~2-3% yoy. 
• We expect JD and BABA to report slight earnings beats and guide upbeat on continued profitability improvement in 2H24. 

• High ratio of female non-regular workers and low ratio of women in management positions are factors behind the gender wage gap. Government expects to correct the gap in individual companies.
• Companies should improve making it easier for employees returning jobs after temporary leave for childcare/childbirth, and treating them in the same position they were before leaving after temporary leave.
• In order for women to have access to higher education and for women to work without leaving the workforce temporarily, the values that endorse gender inequality must be removed.

• The ¥500bn Offering of Honda shares is now priced (¥1,664.5/share) making it ¥497.46bn. Bookbuilding for retail – 80% of the book – is now. The price today closed at ¥1,665/share. 
• The Offering has follow-on “non-discretionary” demand which is non-negligible. It is worth understanding the amounts and timing.
• The lockups and non-discretionary demand, along with Honda’s relative cheapness as a large cap OEM and likely upcoming offerings on competitors means it has support.

• Thai Beverage(THBEV SP)  has proposed a share swap-deal with a promoter company to acquire additional stake in FraserAnd Neave(FNN SP)  in exchange for Frasers Property at negotiated valuations, not market prices.
• Post-Completion of the swap deal with the promoter-owned entity, which requires shareholder approval, Thai Bev will hold a 69.6% stake in F&N and no stake in Fraser Property (FPL).
• If the stake swap were valued at yesterday’s closing share prices, it would imply a drop in the total stake value for Thai Bev after the proposed deal.

• S&P revised MELI’s credit rating outlook to positive from stable and affirmed its BB+ issuer credit rating.
• MELI’s credit metrics are considerably stronger than its peers in the high-yield rating category
• MELI’s bonds have arguably already been trading at the investment grade level, supported by the company’s solid credit metrics for the rating category.

• We are reiterating our Buy rating and projections and raising our price target to $20 (from $17) after meeting with Lands’ End management at their headquarters in Dodgeville, Wisconsin.
• We believe management is laser focused on continuing to drive higher overall returns to the company, from shifting the product mix, lowering inventories, realizing higher pricing, focusing on features and stories to drive deeper customer interaction and loyalty, deepening licensing penetration on non-core categories, expanding internationally and driving stronger results at the Outfitters segment.
• The emphasis on leveraging the highly trusted Lands’ End moniker to maximize brand equity, drive higher returns and create an even more compelling lifestyle story is still in the early stages and, we believe, will drive multi-period growth.

• Author may buy or sell securities related to discussed issuer without informing readers
• Information presented is believed to be accurate but not guaranteed in terms of accuracy or completeness
• Author’s views are opinion-based and subject to change at any time; readers advised to do their own research and not base investment decisions on the note

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• We are reiterating our Buy rating, $22.50 price targe and projections for Betterware de Mexico with the company reporting 2Q24 (June) results after the close on Thursday.
• We believe, while the Betterware division may be a drag (due primarily to foreign exchange), JAFRA continued to shine and the expansion into the United States has slowly begun to gain momentum at both Betterware and JAFRA.
• Further, we expect management to remain positive over key trends and for the company to once again reiterate overall guidance for 2024.

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.

• Anton Oilfield
• Health And Happiness (H&H)
• Vedanta Resources

• We analyze the audited annual report of Perfect Medical Health (1830 HK) released on the 16th of July. We also analyzed the company’s FY24 presentation. 
• The key takeaway is that the company will endeavor to improve its efficiency by cross-selling more services through Beauty Supermarket and expanding the sleep therapy business with Goku.
• Trading at a 12.5% dividend yield with 17% of its market cap in cash and >50% ROEs, the business is solid and worth exploring as an investment. 

• Hyundai Motor (005380 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
• HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
• In our previous note, we looked at the company’s past performance. In this note, we undertake a peer comparison.

• An interview in the Nikkei of Koito Manufacturing (7276 JP) CFO Takahito OTAKE offered the comment that Koito Mfg expected a shareholder return of 130% a year through March 2029.
• The stock popped 19% after lunch on that comment, then fell back to end up 5.0%.
• This is the same pop as we saw end-March. Then it was +24.6% and it stayed up the next day. Same reason for the pop. This was an echo.

• Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  
• The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  
• Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. 

• Furniture trader Samson Holding (531 HK) has announced a Scheme from Shan Huei Kuo, Samson’s Chairman. 
• The Cancellation price is $0.48, a 50% to last close. The premium is more pronounced if going back a month. The price is final.
• This looks done. But Samson is an illiquid micro cap.

• Isetan Shinjuku expects to post sales in excess of ¥400 billion this year, a record for a single retail store, although most of the growth is from inbound tourists. 
• But Isetan-Mitsukoshi is working to ensure longer term stability through more sophisticated databases and personalised marketing.
• At the same time, it will make better use of real estate assets, investing ¥500 billion around Isetan Shinjuku alone.

• We are initiating coverage on MercadoLibre with a preference for MELI 2.375% 2026 bonds.  We are optimistic about MELI’s overall financial and business risks.
• For EM investors, we prefer MELI 2.375% 2026 notes with a 10-30 bps compression potential. These bonds are trading wide compared to the Brazilian Sovereign and the benchmarks. 
• For US investors, MELI’s risk-reward symmetry is especially compelling, given that 2031 bonds are trading wide by around 75 bps compared to global e-commerce and fintech peers. 

• Since Japan’s gender gap index ranks 118th out of 146 countries, stagnating in the lower group, it will take a considerable amount of time to resolve the issue.
• A shortcut to the improvement of women’s status is to greatly improve the gender ratio in the legislature in order to change the current framework for improving women’s status.
• Behind the lagging 103rd place in the ratio of female managers is the lack of progress in higher education for women.

• •It has been the summer of renewals at ADEA leading to a directionless stock since ADEA reported Q1 results. ADEA has announced several renewals, LBTYA, since the beginning of May
• We are now more than two weeks into the third quarter lending credibility to why the shares have yet to react positively
• We were already forecasting the probability of a new license occurring later in the year and are keeping our earnings estimates unchanged heading into ADEA reporting second quarter results.

• GameStop, once the epicenter of the retail investor revolution led by the enigmatic Roaring Kitty (Keith Gill), has seen a dramatic resurgence in attention.
• Gill, who became famous for his substantial stake in GameStop during the 2021 meme stock frenzy, recently reappeared with jaw-dropping claims of substantial holdings in GameStop and Chewy.
• However, the recent results and financial disclosures reveal a company that, despite superficial improvements, is fundamentally unstable.

• D.R. Horton, America’s Builder, reported financial outcomes for the second quarter of fiscal 2024 indicating a positive trajectory in both revenue and profit generation.
• Despite challenges related to elevated inflation and mortgage interest rates, the company has demonstrated solid performance with an earnings increase to $3.52 per diluted share, from $2.73 in the prior-year quarter.
• Consolidated revenue increased by 14%, reaching $9.1 billion; and home sales revenue surged by 14% to approximately $8.5 billion on 22,548 home closings.

• At the beginning of this month, we got a scoop from Reuters about a US$3bn selldown of Honda Motor (7267 JP) by P&C insurers and others. 
• We knew this was coming at some point. The FSA had pushed the insurers to unwind cross-holdings, and it is otherwise of the zeitgeist. 
• It came out as heavily retail-oriented, and the supply/demand details are otherwise interesting. To boot, there is an EPS boost to come.

• Since the US$3.3 billion secondary placement announcement, Honda Motor (7267 JP)’s shares are down 5% from the undisturbed price of JPY1,791 per share (4 July).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Honda’s shares have followed the pattern of previous large placements.
• The offering will likely be priced on 17 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• Samson Holding (531 HK) disclosed a Cayman scheme privatisation offer from Mr Samuel Kuo (Chairman) at HK$0.48 per share, a 77.8% and 50.0% premium to undisturbed and last close price, respectively. 
• The key condition will be approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). The offer price is final.
• The attractive takeover premium, lack of shareholders holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small cap illiquid stock.

• Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.0 billion at a valuation of US$17 billion.
• In Hyundai Motor India IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on market share losses in the key SUV sub-segment, bottom-quartile revenue growth, higher royalty rates and dividends to Hyundai ahead of the IPO.

• Kalyan Jewellers (KALYANKJ IN) , a leading jeweller with a pan-India presence, is expected to deliver strong sales growth, and improving returns with its asset-light expansion plans.
• Indian weddings have transformed from simple rituals to elaborate celebrations requiring heavy spending on jewellery and specialty apparel, reflecting rising affluence and media influence.
• Wedding related jewellery demand constitutes 60% of India’s total gold jewellery demand and remains resilient regardless of price changes.

• Limoneira is an agribusiness with underutilized land and water assets, resulting in poor returns for shareholders
• Peter Nolan, a successful asset manager from Leonard Green, has joined the board along with Global Alpha, indicating a potential turnaround in capital allocation and strategy
• Nolan’s leadership is expected to unlock the potential of Limoneira’s assets, leading to significant returns for shareholders

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• Grocery Outlet reported fiscal Q1 2024 results that reflected mixed performance, illustrating both operational challenges and promising growth prospects.
• During the quarter, the company recorded a 7.4% increase in sales, achieving $1.04 billion, spurred on by a 3.9% rise in comparable store sales and reinforced by robust transaction count growth of 7%.
• This reflects Grocery Outlet’s continued customer appeal and effective store expansion strategy, having opened six new stores during this period.

• Strong American harvest driving downward pressure on Wheat, likely to offset reductions in EU and Russia.
• Corn saw modest recovery, driven by muted ending stocks, below trade estimate, but the harvest is going to be the third largest ever.
• US soybean production remains muted, in line with the Acreage report, and led to moderate recovery in early trading on Friday, but bearish sentiment persists.

• The key for high growth in 2023/24Q1 lies in its assembly character toys with renowned IPs,which may not be sustainable or even collapse if Bloks fails to renew license agreements.
• The advantages of Bloks in development prospects, self-developed IPs, brand stickiness are not obvious. The latest valuation reached RMB7.2 billion, but the founder has already cashed out before IPO. 
• Hong Kong stock market has been “lukewarm” to toy companies. Except Pop Mart, valuation/share price of peers are quite weak.How to gain investor/market’s recognition for Bloks is a question mark.

• Our estimations for FY 2024 annual revenue range at around $10,827 million and for 2025 at around $12,090 million.
• The company’s annual revenue reached $9,995 million in 2023 compared to $10,276 million in 2022, posting a decrease of 2.73%.
• Toll Brothers gross profit for FY 2023 was $2,634 million increased by 5.95% com- pared to $2,486 million for the corresponding period of 2022.

• 15 shareholders are looking to sell between 73.9-85m shares (US$1.2bn-US$1.38bn) of ASICS Corp (7936 JP) in a secondary offering that will likely be priced on 23 July.
• ASICS Corp (7936 JP) has also announced a huge upward revision to its sales and profit forecasts with EPS expected to increase 61% from earlier estimates.
• Passive buying will be extremely limited in the short-term with the downward pressure offset to a large extent by the sales and earnings revisions.

• Hong Kong market still trades at a substantial discount to Analyst year end price targets.
• Budweiser APAC is dependent on China’s consumer to lift sales while Anta Sports is targeting increased sales from the upcoming Paris Olympics.
• Sunny Optical is seeing substantial growth from it EV segment and Haitian continues to grow its international sales.  Shineway RX is a rare value play in the pharmaceutical sector.

• A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP).
• The possibility of such a selldown was flagged by Reuters prior to the deal launch.
• In our earlier note, we spoke about the deal dynamics. In this note, we talk about the updates since then.

• First, we offer a recent history of Didi going back to its June 2021 IPO 
• Next, we review the company’s annual results from 2020-23 plus Q124
• Finally, we try to answer the question, “Does Didi need to raise cash soon?”

• This is the final installment in our series on the APAC Luxury Industry, where we highlighted that luxury travel might offer more appealing opportunities than traditional luxury goods.
• While travel has surpassed pre-pandemic levels, traditional luxury goods have shown very low demand in recent months.
• Below, we analyze recent trends in luxury travel for Mandarin Oriental International (MAND SP), Minor International (MINT TB), and Shiseido Company (4911 JP).

• The dissolution of cross-shareholdings and changing environment in which foreign ownership has risen to 30% have changed the view of activist investors. TSE is one such example of big change.
• It’s convenient that activist investors can use “TSE requested” language that is both easily understood and undeniable by the company when communicating with the portfolio company to improve its issues.
• We must determine whether this is a temporary return to shareholders until the activist investors are removed from the shareholder list, or a shift to value-creating management.

• It was hard to imagine a worse first quarter for Burberry.
• At a time when investors were desperate for some positive news following a torrentially bad fiscal 2024, Burberry’s Q1 trading update emphasised a “luxury market that is proving more challenging than expected” with the weakness highlighted coming into FY25 having “deepened” .
• Retail revenue for the quarter of £458 million came in 22% below the prior year.

• We are initiating coverage of JAKKS Pacific, Inc. (“JAKKS” or the company), a leading designer, producer, marketer, seller and distributor of multi-brand licensed toys and related products, with a Buy rating and a $24 price target, or 7.5X our 2025 EPS projection of $3.20.
• We believe, after a rough start to 2024, driven by weak content-led movie driven results, JAKKS is nearing a stabilization of the business and, with new licensing relationships (The Simpsons and Authentic Brands) and content-led movies (Moana 2, Sonic the Hedgehog 3) coming to the fore, is positioned for upside.
• Further, as of 1Q24, JAKKS is debt free for the first time in recent history, with cash per share of over $3.40 and tangible book value of over $14.75 per share.

• Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.
• Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.
• It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.

• Yifeng is a leading pharmacy chain in China with 13,000 stores nationwide, primarily in East and Southcentral regions
• Revenue is mostly derived from prescription and over-the-counter drugs, with Traditional Chinese Medicine and non-medicine products also contributing
• Despite already being a top pharmacy chain in China, Yifeng still has room to grow and capture more market share in the industry

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND inflow continues, albeit smaller. SOE Banks/Energy/Telecoms remain a big net buy. Percentage of volume is large. NORTHBOUND saw finance buying. Possible short-covering ahead of new short-selling restrictions/access.
• AH Premia were up small on average, down small on the liquid pairs. But HSI/HSCEI vs CSI300/500 performance spreads were higher. Third Plenum this week may drive “sentiment.”

• A group of shareholders aims to raise around US$1.3bn via selling around 11% of ASICS Corp (7936 JP).
• For the two large banks, this will be a cleanup of their cross-shareholding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Thai Beverage (THBEV SP) majority-owned SABECO, a leading beer company in Vietnam, may face volume declines if the proposed beer tax hike is implemented.
• The tougher market outlook makes the earlier proposed BeerCo listing unlikely anytime soon.  
• With no meaningful stock catalyst, weak sector outlook and a stretched balance sheet, the stock could slip down after index inclusion related passive stock buying ends.

• Guangzhou Automobile sales volume of new energy vehicle decreased by 38% YoY in June and by 31% YoY in 1H24.
• BYD plans to invest US$1 billion to build a factory in Turkey.
• AliPay announced that foreigners’ consumption amount in China in 1H24 was eight times of last year.

• Zozo continues to post solid gains in sales but a slight dip in new customers has led some to suggest that the online fashion mall is reaching its peak. 
• Meanwhile, The Japanese fashion retail sector has seen improved performance from retail stores at the expense of e-commerce, with stores actually outperforming online last year.
• While further growth may be harder to achieve, Zozo has several strategies in place that should help it reach its target of ¥800 billion.

• Charles & Colvard operates in the lab-created diamond industry and plans to transition to lab-grown diamonds and direct distribution
• The company experienced a challenging second quarter but has a solid foundation and potential for improved financial performance in the future
• Despite current setbacks, Charles & Colvard could present a value investment opportunity for patient investors awaiting a turnaround

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Hyundai Motor India (1342Z IN), a subsidiary of Hyundai Motor (005385 KS), aims to raise up to US$3.0 billion at a valuation of US$17 billion. 
• HMIL is India’s second largest passenger vehicle manufacturer, as measured by domestic passenger vehicle sales. It serves as Hyundai’s production and export hub for emerging markets.
• The bull case rests on a strong market position, premiumisation-led growth, top-quartile operating and FCF margin profile. 

• I-Scream Media is getting ready to complete its IPO on KOSDAQ exchange in August. The IPO price range is from 32,000 won to 40,200 won. 
• I-Scream Media is one of the the leading digital education platform companies in Korea. Its I-Scream S platform is used by more than 93% of elementary school classrooms in Korea.
• Post IPO, Sigong Tech will have a 23.7% stake in I-Scream Media. Sigong Tech’s stake in I-Scream media (at high end of IPO value) is 157% of its market cap.

• Gentex Corporation reported its financial results for the first quarter of 2024, revealing a mixed outlook tempered by challenges in the global auto industry yet bolstered by strategic advancements and product development.
• Net sales saw a 7% increase to $590.2 million compared to the same period last year, a performance that came notwithstanding a 3% drop in light vehicle production in the company’s primary markets.
• This discrepancy highlights Gentex’s ability to outperform the broader market, largely attributable to increased take rates of advanced features like Full Display Mirrors and growth in the auto-dimming mirror sector.

• Competition little work because the portfolio company had advantage over competitors in business. This distorted competitive environment may have prevented the beneficiaries from receiving the benefits they should have received.
• If the business was advanced by competitive advantage through the ownership of shares in the portfolio company, the beneficiaries may not have received the benefits that they should have received.
• The question is whether the life insurers are exercising their voting rights properly for the benefit of the beneficiaries in the shares of client companies they hold.

• Hilton Grand Vacations reported results for the first quarter of 2024 with several positive financial and operational highlights that reflect strengths in its strategy and company growth, along with some remaining challenges related to customer behavior and macroeconomic conditions.
• Starting with the positive elements, Hilton Grand Vacations exhibited robust adjusted EBITDA figures, although specific numbers were not provided, it was evident the company’s margins remained solid.
• Notably, reported contract sales for the quarter stood at $631 million, attributed partly to the recent Bluegreen acquisition which concluded in January.

• Frontdoor, Inc. has reported a promising first quarter of 2024, revealing solid financial performance and operational improvements despite external market challenges.
• The company recorded a 3% increase in revenue reaching $378 million.
• This growth was accompanied by a substantial increase in gross margin, which rose by 510 basis points to 51%, and a 33% rise in adjusted EBITDA, setting a new record for the first quarter at $71 million.

• Nexstar Media Group’s first quarter performance for 2024 displays a mixed outlook, with distinct strengths in certain areas counterbalanced by challenges in others.
• The company reported record first-quarter net revenue of $1.28 billion, driven largely by a robust increase in distribution revenue, which reached an all-time high of $761 million.
• This reflects ongoing strength in Nexstar’s ability to monetize its extensive broadcast and digital network.

• Daidoh Ltd (3205 JP) saw an activist “win” at its AGM, another activist bought, the stock popped. I wrote about it. 2hrs later, the Board set a new Div Policy.
• ¥100/Yr for 3 years in a row. That was 11% of then-current price. Big activist win for Strategic Capital which owned 25% and Murakami-san who had gone substantial 1wk earlier.
• Today post-close, Strategic Capital reported it sold everything on 5 July, the next day. WOW. That was half of Maximum Real World Float. Oops. Murakami-san sold too. 

• Today after the close, ASICS Corp (7936 JP) announced a very large secondary offering. It points out that as a global brand, it needs global-standard corporate governance. 
• As such, it says they’ve been discussing sales with crossholders. But we knew the cross-holders were going to sell. This offering is 85mm shares, ¥210bn at last. That’s big. 
• The stock has doubled year-to-date. Today they raised FY guidance BIGLY (+60% OP and NP). Now a huge offering. This seems like a “feed the ducks when they’re quacking” situation.

• ASICS Corp (7936 JP) has announced a secondary offering of up to 85.0 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY218 billion (US$1.4 billion).
• Asics’ goal with the secondary offering is to eliminate cross-shareholdings. Asics also announced a material upgrade to full-year forecasts to offset the impact of the offering.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 23 and 26 July (likely 23 July).

• Kobe Bussan continues to hit new lows relative to the median Japanese retailer, as cheaper alternatives continue to rebound.
• Kobe was one of the greatest beneficiaries in Japan of the Pandemic, but it is stuck at 10% growth which is no longer unusual. 
• Kobe’s wholesale model makes it difficult to benefit from food price inflation like other food retailers. Kobe Bussan could drop another 50% before reaching fair value.

• Delfi Ltd (DELFI SP) is Asia’s largest confectioner, with circa 50% market share of chocolate in its largest market Indonesia, despite competition from global confectionary players over many years. 
• The company produces products that are engrained in local tastes but it also produces products in different categories that compete directly with foreign competitors with a local twist. 
• The negative headwinds from higher cocoa prices have started to stabilise and Delfi has deployed various strategies to offset the impact on packaging and ingredients. 

• The company’ share bucked China catering sector’s down trend and rallied 30% in last few weeks.
• Its 2Q operating data suggest that its store opening is well on track with healthy SSSG, underpinning strong margin expansion.
• We believe that market still underestimates its growth and earnings potential which could beat consensus by wide margin. Interim results to be announced in August will be key catalyst.

• ASICS is revising up its full year forecasts, now expecting sales to reach a record ¥660 billion , up 15.7% year-over-year. There is a strong currency tail wind. 
• Still “you gotta be in it to win it..”  ASICS is currently crushing it, while Nike flounders
• A large secondary offering will likely hit the share price in the short term; there are two key risks…but it could be a good opportunity to buy. 

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Rino Mastrotto’s ESG as “Adequate”, in line with its Environmental and Governance scores, while the Social score is “Strong”. Controversies are “Immaterial” and Disclosure is “Adequate”. 

• Choice Hotels International Inc. showed a largely positive outcome in its first quarter of 2024 financial results, demonstrating solid growth trajectories in various aspects of its business.
• The company reported an impressive 17% increase in adjusted EBITDA and a 14% increase in adjusted EPS on a year-over-year basis, achieving record levels for the first quarter.
• This growth was partly fueled by the successful integration of the Radisson Americas, which has substantially broadened the company’s scale and diversified its earnings streams through new non-RevPAR-related avenues.

• US markets suffered a bearish reversal on CPI data. Time look to elsewhere?
• China looks to be bottoming. Could the region begin to show relative strength?
• Emerging markets look particularly attractive especially if the dollar trades lower.