Consumer

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
These insights may also flag those companies where shares have been pledged. Stocks mentioned include Luk Fook Holdings Intl (590 HK), Zhongsheng Group (881 HK), and Kowloon Development (34 HK).

ECM Weekly (9th Oct 2022) – CALB, Socionext, Betagro, Country Style, I-Tail, Lionheart, Kakao Pay

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, HK IPOs continued to struggle with CALB (3931 HK) joining Leapmotor (9863 HK) and Onewo (2602 HK) with its tepid performance.
Given the mid-week HK holiday and the ongoing golden week, there weren’t any large placements this week.

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Oct 08

Daily Brief Consumer: Hero Motocorp, Seven & I Holdings, Kweichow Moutai, Country Style Cooking Restaurant Chain and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Hero Motocorp (HMCL IN) | Brace for Disappointment
Seven & I – The US Is About to Hit the Brakes
Shanghai/Shenzhen Northbound Connect: Weekly Moves (7 October 2022)
Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability

Hero Motocorp (HMCL IN) | Brace for Disappointment

By Pranav Bhavsar

Hero Motocorp (HMCL IN) has been outperforming the Nifty 50 over the last 6M
Our flash checks done in the south suggests the outperformance may not last long
Failure of a model, high competitive intensity, and changing preferences can again lead to high inventory levels leading to a possible correction in wholesales post-festive season.

Seven & I – The US Is About to Hit the Brakes

With OP up by 22% YoY to beat the consensus estimate by ¥2.0bn, Seven & I turned in a strong 2QFY23 along with a considerable upgrade to FY23 guidance.
However, the post-earnings price reaction seems to suggest that the market is a bit worried about the short-term performance of Seven & I Holdings (3382 JP)’s US convenience store business.
In addition, the struggling non-core businesses whose future remains undecided could also be weighing in on Seven & I’s price performance.

Shanghai/Shenzhen Northbound Connect: Weekly Moves (7 October 2022)

Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net outflow over the past week was ~US$0.15bn, split between Shanghai (+US$0.05bn) and Shenzhen (-US$0.20bn).
The largest inflows were into Kweichow Moutai (600519 CH) and Zhejiang Huayou Cobalt (603799 CH). The largest outflows were in LONGi Green Energy Technology (601012 CH) and CATL (300750 CH).

Country Style Cooking Restaurant Chain Pre-IPO – The Positives – A Second Attempt at Profitability

By Ethan Aw

Country Style Cooking Restaurant Chain (1985552D HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
Country Style Cooking Restaurant Chain (CSCRC) is a Chinese quick service restaurant (QSR) chain situated in China. It operates two brands, namely: CSC and Rice Space, which are all self-operated.
In this note, we talk about the positive aspects of the deal.

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Oct 07

Daily Brief Consumer: Jardine Cycle & Carriage, Tunas Ridean, BYD Co Ltd, Seven & I Holdings, Betagro, Alibaba Group, Sands China Ltd, Shopback, Sundrug Co Ltd and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

JCNC Is Overstretched Vs. Astra
Tunas Ridean: Sell Or Tender, But Don’t Do Nothing
BYD Sales Hit Record High as China Steers Stimulus to Auto Market
Seven & I (3382) | U.S. Gas Margins Offset Rising Energy Costs at Home
Betagro IPO: Valuation Insights
Betagro Pre-IPO -Refiling Updates- Continued Their Upward Trajectory but Paid Itself Large Dividends
Alibaba, ICBC, Tencent, and Ping An
Sands China Ltd: The Best Value Entry Point in the Sector as EVisa Easing Begins
ShopBack Raises $80m from Temasek-Backed 65 Equity Partners
Buying Japanese Drug Store Names: Welcia (3141-JP) And Sundrug (9989-JP)

JCNC Is Overstretched Vs. Astra

Jardine Cycle & Carriage (JCNC SP) is currently trading at a ~9% discount to NAV, around the narrowest since the post-Covid nadir in April 2020.
JCNC’s recent results highlighted a marked improvement in its unlisted Vietnamese automotive ops.
Weakness in the Indonesian rupiah has taken some of the shine off Astra International (ASII IJ)‘s strong sales growth.

Tunas Ridean: Sell Or Tender, But Don’t Do Nothing

Indonesian auto dealership play Tunas Ridean (TURI IJ)‘s buyback – and subsequent delisting – has been extended to the 12 October.
TURI shareholders who do not tender – or sell in the market – will be left holding listed scrip.
Currently trading a gross spread of ~3% to terms, net of the sales tax levy.

BYD Sales Hit Record High as China Steers Stimulus to Auto Market

By Caixin Global

China’s largest new-energy vehicle (NEV) manufacturer BYD Co. Ltd. reported record sales last month as China stepped up stimulus to shore up sluggish economic growth.
In September, Hong Kong- and Shenzhen-listed BYD sold 201,259 NEVs, a category that includes electric and hybrid vehicles.
The figure was up 183% year-on-year and marked the seventh consecutive month of growth.

Seven & I (3382) | U.S. Gas Margins Offset Rising Energy Costs at Home

By Mark Chadwick

1H results, OP up +26% YoY, were good but in line with the recent Nikkei preview.
The U.S. convenience store operation was the standout performer and the reason for the full year guidance raise
We remain bullish on the stock. It is just too cheap relative to global peers

Betagro IPO: Valuation Insights

Betagro (BTG TB), Thailand’s leading integrated food company, will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
We previously discussed the IPO in Betagro IPO: The Bull Case and Betagro IPO: The Bear Case.
Our valuation analysis suggests that Betagro is fully priced at the IPO price. Give the IPO a pass, awaiting a lower entry point.

Betagro Pre-IPO -Refiling Updates- Continued Their Upward Trajectory but Paid Itself Large Dividends

By Clarence Chu

Betagro (BTG TB) is looking to raise about US$460m in its Thailand IPO.
Betagro is an integrated agro-industrial and food business in Thailand. Sales continued to stage an upward trajectory, and higher ASPs, combined with a changing sales mix led to expanding profitability.
However, the growth in sales hadn’t been uniform across all segments and the bounce in 1H22’s profitability seems to come off a low base as well.

Alibaba, ICBC, Tencent, and Ping An

By Untying The Gordian Knot

The YTD performance of HSI -22%, HSI Tech Index -35%, HSI Properties -18.6%, and continued 23-25% short trading volume are set up for sharp rallies.
Investment banks and brokers forecast economic recovery for buying in Q4 2022 or 2023.
Overall volume continues to fall [something evident from HKEX share price as well].

Sands China Ltd: The Best Value Entry Point in the Sector as EVisa Easing Begins

By Howard J Klein

With five major China mainland markets expected to re-open by November, we see pent up demand sparking daily visitor footfall to Macau.
Golden Week total arrivals could reach an aggregate 170,000 despite Beijing’s warning travelers to stay home. 2019 Golden Week drew 665,000 visitors.
At HK$19.960 a share at writing, market sentiment does not yet appear to recognize the first meaningful easing in China travel bans since the 2020 lockdowns.

ShopBack Raises $80m from Temasek-Backed 65 Equity Partners

By Tech in Asia

ShopBack has entered into a subscription agreement to raise US$80 million in the second tranche of its series F round
The Singapore-based shopping and rewards platform’s latest backer is a Temasek-backed investment firm with US$3.3 billion in assets under management.
Founded by Henry Chan and Joel Leong in 2014, ShopBack allows users to get cashback from their online and offline transactions

Buying Japanese Drug Store Names: Welcia (3141-JP) And Sundrug (9989-JP)

By Joe Jasper

Japan has been a favorite country since late-March, and we have continued to see improvement ever since.
Vermilion’s international Group CS-35 Drug Stores, Japan displays bullish price and RS downtrend reversals, giving us added confidence that outperformance is likely to continue
The two stocks highlighted today display base breakouts over the last couple of days, making them timely buys. Buy: Welcia Holdings (3141-JP) and Sundrug (9989-JP)

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Oct 06

Daily Brief Consumer: Rakuten Inc, CanariaBio, I-Tail, Z Holdings, Ryohin Keikaku, Shidax Corp, Amorepacific Corp, Valora Holding AG and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Rakuten – Sale of Stake in Securities Business Eases Funding Pressure
KOSDAQ 150 Rebalancing: 7 Regular Changes + 2 Special Entries
I-Tail Corporation Pre-IPO – The Positives – For the Pampered Pets
Z Holdings / PayPay – A Focus on Margin Improvement as ZHD Moves to Consolidate
Ryohin Keikaku: A Beat Can Turn Around Price Performance
Shidax Outlook May Change – Better Governance Matters
A Senior Korean Govt Official Provides the Likely Time of the End of Indoor Mask Mandate
FEMSA/Valora Holding: Offer Success and Squeeze-Out
I-Tail Corporation Pre-IPO – The Negatives – Non-Uniform Growth

Rakuten – Sale of Stake in Securities Business Eases Funding Pressure

By Kirk Boodry

Rakuten is reportedly selling a stake in its Securities unit for ¥80bn, which probably means a near-term IPO of that business is off the table
It may also give Rakuten greater flexibility on the timing of a Rakuten Bank IPO should pricing for that be problematic
In terms of surfacing the value of Rakuten’s fintech assets this is good news but it is mobile losses that have held the shares back. We remain at Neutral.

KOSDAQ 150 Rebalancing: 7 Regular Changes + 2 Special Entries

By Sanghyun Park

KOSDAQ 150’s December rebalancing will feature seven regular changes and two special entries.
Among the additions, we should focus on Dear U and ISC, which have a balanced level of liquidity and flow, rather than those theme stocks with high volatility.
As for Nature Holdings, Eoflow, and Nextin, I suggest a more aggressive entry point due to low trading volume. Then, I’d basket-trade the deletions on equal weight.

I-Tail Corporation Pre-IPO – The Positives – For the Pampered Pets

I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group (TU TB).
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In this note, we talk about the positive aspects of the deal.

Z Holdings / PayPay – A Focus on Margin Improvement as ZHD Moves to Consolidate

By Kirk Boodry

The PayPay conversion is complete and management is focused on managing costs, which is reassuring for ZHD financial targets and for an eventual IPO
There was less said about the latter, however, whilst detail on the valuation gain that parent Softbank Corp needs to hit its own operating income target has not been confirmed
Our valuation of ¥500bn for PayPay looks more reasonable as 50-73% YTD declines in public comps have brought trading multiples in line (PayPay at 5x FY22e revenue versus 5-8x)

Ryohin Keikaku: A Beat Can Turn Around Price Performance

Our analysis points to a significant earnings beat for Ryohin Keikaku, whose share price is down more than 50%-YTD and is currently hugging the bottom-end of the long-term trend channel.
With freight and logistics down more than 50% since June 2022, we are expecting Ryohin Keikaku (7453 JP)’s gross margin to return to around 49-50%.
In addition, the company’s monthly sales growth figures indicate that FQ4 revenue should be around ¥114.6bn compared to ¥105.8bn for consensus.

Shidax Outlook May Change – Better Governance Matters

By Travis Lundy

On 8 September, I went over the Oisix ra daichi (3182 JP) bid for the stake in Shidax Corp (4837 JP) held by Unison Capital.
The founding Shida family had a deal whereby when the company raised capital years ago, the family had ROFR to buy or nominate a buyer of the Unison stake.
The problem? Shidax’ independent board said this was unfair to minorities. The back and forth has continued but there may now be hope for a better deal.

A Senior Korean Govt Official Provides the Likely Time of the End of Indoor Mask Mandate

By Douglas Kim

In the past few days, a senior government Korean official announced that the indoor mask mandates will likely be lifted in March 2023.
Although this is not officially finalized, we believe that there is a very high probability of the Korean government finally ending the indoor mask mandate sometime in March 2023.
The end of the indoor mask mandate is likely to have a positive impact on the Korean cosmetics companies. Nonetheless, we are still concerned about the relatively high valuation multiples.

FEMSA/Valora Holding: Offer Success and Squeeze-Out

By Jesus Rodriguez Aguilar

The Additional Acceptance Period ended on 29 September. On 3 October, FEMSA announced the satisfaction of all conditions. On 5 October, FEMSA announced that its participation amounts to 96.87%.
Settlement will occur on 7 October. FEMSA intends to initiate a squeeze-out procedure and delist the Valora shares from trading on SIX Swiss Exchange.
The tender was good news for shareholders. My TP is CHF 252.2/share, therefore I believe the offer is fair and there was no counterbid.

I-Tail Corporation Pre-IPO – The Negatives – Non-Uniform Growth

I-Tail Corporation, an original equipment manufacturer (OEM) in the wet pet food category, aims to list in Thailand in 4Q22. ITC is a subsidiary of Thai Union Group (TU TB).
As per ITC, it was the number two pet food company in Asia and in the top ten pet food companies globally. ITC expertise lies in fish-based wet pet food.
In this note, we talk about the not-so-positive aspects of the deal.

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Oct 04

Daily Brief Consumer: Pola Orbis Holdings, ASICS Corp, Tesla Motors, Betagro Group, Kakao Pay, K Car, Tokyo Stock Exchange Tokyo Price Index Topix, Zegna, Cubic City Service Apartment Group and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Japanese Cosmetics: Trading Around Q3 Earnings
Asics (7936) | Nike Air Pockets
Tesla Q3 Deliveries Trail Even Sharply Reduced Market Consensus—And It’s Own Best Guess
Betagro IPO: The Bull Case
Kakao Pay Placement Lockup Expiry – Alipay Is Soon Going to Be Free to Shed Its US$1.6bn Stake
Noteworthy Lockup Releases for the Next Two Months in Korea
Move to Company with Statutory Committees Is Shortcut to Make the Compensation Committee Functional
Breaking SPAC Convention
Cubic City Service Apartment Group Pre-IPO Tearsheet

Japanese Cosmetics: Trading Around Q3 Earnings

The latest rally in Japanese cosmetics, driven by improving domestic market conditions has strangely avoided two of the big names in the market, Shiseido Company (4911 JP) & Pola Orbis.
Although both of these names seem to offer big upside potential, we think Pola Orbis Holdings (4927 JP) has a significantly better risk-reward profile in the short term.
We would also be inclined to hedge the market risk using Kose Corp (4922 JP) on the short side as the name has the biggest downside potential.

Asics (7936) | Nike Air Pockets

By Mark Chadwick

NIKE reported Q1 results post close on Thursday sending the shares down 9% after hours and hitting the stock price of Asics on Friday (-10.7%).
ASICS is unlikely to face ALL of the same problems that impacted NIKE, but investors should be aware of the rising inventory risk
ASICS is less risky given less exposure to apparel. Even so, we remain bearish for now

Tesla Q3 Deliveries Trail Even Sharply Reduced Market Consensus—And It’s Own Best Guess

By Vicki Bryan

Q3 deliveries were an impressive 343,830, a bit better vs my cautious 331,104 est;
But results trailed plunging market projections & Tesla’s own guidance by 20,000-50,000;
Even worse, the shortfall meant sales trailed production by record 22,100.

Betagro IPO: The Bull Case

Betagro Group (1737144D TB), Thailand’s leading integrated food company, is seeking to raise US$554 million through a SET IPO, according to press reports
Betagro plans to offer 500 million shares or 25% of the total issued shares after IPO. This will be Thailand’s second-largest listing this year after Thai Life Insurance (TLI TB).
The key elements of the bull case rest on top quartile growth rates, a well-functioning core business, rising profitability, cash generation and declining leverage.

Kakao Pay Placement Lockup Expiry – Alipay Is Soon Going to Be Free to Shed Its US$1.6bn Stake

In early Jun 2022, Alipay raised around US$386m via selling 3.3% of outstanding shares of Kakao Pay (377300 KS). That was the first selldown by Alipay (Alibaba (ADR) (BABA US)).
Despite pricing the shares at an enticing 11.8% discount to last close, the stock failed to hold the deal price and hasn’t looked back since.
In this note, we will talk about the previous deal and the upcoming lockup expiry.

Noteworthy Lockup Releases for the Next Two Months in Korea

By Sanghyun Park

K Car’s major shareholder is Hahn & Company, which has already fully recovered the initial investment. So, there is an actual probability that it will make an aggressive exit.
SingEel’s 3-month IPO institutional and VCs will be released, 6.18% of SO. All of them are in a profit zone, there is a possibility that an aggressive overhang will occur.
Kakao’s 47% holdings in Kakao Pay will be released. The possibility of lowering the stake seems quite low. Nevertheless, we must consider the risk that this will affect market sentiment.

Move to Company with Statutory Committees Is Shortcut to Make the Compensation Committee Functional

By Aki Matsumoto

With the revision of Corporate Governance Code in 2021 and its listing criteria on prime market, the groundwork has been laid to some degree to facilitate functioning of compensation committee.
Meanwhile, there are not many companies with voluntary nominating and compensation committees that disclose the authority of their nominating and compensation committees in their annual securities reports.
Many companies, even large companies, do not even have a compensation policy in place, indicating that individual director compensation is a much lower priority to consider.

Breaking SPAC Convention

By subSPAC

Over the last two years, SPACs have emerged as an alternative to the traditional IPO process, especially for those who’ve found it challenging to raise money from the public markets in the past.
In fact, SPACs have been a great investment vehicle for Space Launch firms, Electric Vehicle Upstarts and even Quantum Computing firms.
It is surprising then that Italian Luxury Fashion House Zegna, which has a rich 110-year heritage, has decided to take the SPAC route to make its debut in the US markets rather than list in Europe or in Asia like most of its peers.

Cubic City Service Apartment Group Pre-IPO Tearsheet

By Ethan Aw

Cubic City Service Apartment Group (CCSAG HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and CCB International.
Cubic City Service Apartment Group (CCSAG) is a rental apartment services platform, which pioneered the centralized rental apartment model in China, according to the company.
It provides rental apartments in centrally managed buildings with modern facilities. As of 30 Jun 2022 (1Q23), the company operates 76,190 apartments nationwide across 394 locations in 26 cities.

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Oct 03

Daily Brief Consumer: Leapmotor, Tassal and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There’s a Lot!)
Tassal (TGR AU): 3rd November Shareholder Vote On Cooke Offer

HSCI Index Rebalance and Stock Connect: Potential Changes in December & March (There’s a Lot!)

By Brian Freitas

We see three new listings as potential inclusions to the HSCI in December. One is already in Stock Connect, one will be added to Stock Connect while one will not.
Given the large market moves, there will be many changes to the HSCI in March 2023. Quite a few stocks could remain in the HSCI but drop out of Connect.
Some of the potential deletions/ Stock Connect drops have large Southbound holdings and some of these positions could be pared back over the next few months.

Tassal (TGR AU): 3rd November Shareholder Vote On Cooke Offer

Tassal (TGR AU) has convened a Scheme Meeting on the 3 November for shareholders to vote on the proposal from Cooke Inc at A$5.23/share.
The vote, for all intent and purposes, appears a formality. The Independent Expert considers the Offer to be fair and reasonable with a fair range of A$4.65-A$5.35/share.
Trading at a gross/annualised spread of 1.2%/8.8%, assuming late-November completion.

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Oct 02

Daily Brief Consumer: Tassal, Easy Trip Planners, Tokyo Stock Exchange Tokyo Price Index Topix and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Tassal Scheme Meeting on 3 November
Easy Trip Planners: Unattractive Inspite of High Profitability
What Initiatives Are Being Taken by Companies that Have Increased Valuations?

Tassal Scheme Meeting on 3 November

Tassal (TGR AU)‘s scheme meeting is scheduled for 3 November. The IE considers the A$5.23 per share offer fair and reasonable.
The key condition is approval from shareholders – headcount test and approval by at least 75% of the votes cast on the scheme resolution. Cooke has received FIRB approval.
We continue to think that offer is attractive. At the last close price and for the 21 November implementation date, the gross and annualised spread is 1.2% and 8.8%, respectively.

Easy Trip Planners: Unattractive Inspite of High Profitability

By Nitin Mangal

Easy Trip Planners (EASEMYTR IN) has had a good run on its bourses and is probably one of the very few new-age companies which is profitable.
However, the overall narrative does not look attractive to us when we deep dive into the forensics, including the cost drivers and balance sheet risks to the company.
Perplexing business model, customer concentration and high valuations make it unattractive inspite of high profitability.

What Initiatives Are Being Taken by Companies that Have Increased Valuations?

By Aki Matsumoto

Changes in Tobin’s q were closely related to increases in foreign ownership. Companies with increases in Tobin’s q reduced cash equivalents and total assets, suggesting they used assets more effectively.
No significant correlation was shown between Tobin’s q and board practices, but companies with large increases in Tobin’s q improved in % independent directors and the independence of compensation committees.
Companies with increases in Tobin’s q showed superior values in Key Actions: change in growth policy score, dividend policy score, cash holdings score, frequency of share retirements, AGM/IR disclosure scores.

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Oct 01

Daily Brief Consumer: Craftsman Automation, Unilever PLC and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Craftsman Automation Ltd: Forensic Review
Supply-Chain Deforestation Laws as a New and Growing Source of Transition Risk

Craftsman Automation Ltd: Forensic Review

By Nitin Mangal

Craftsman Automation (CRAFTSMA IN) is engaged in the business of manufacturing engineering components, sub-assemblies, products and rendering of contract manufacturing services to various industries
Key forensic takeaways include working capital troubles, alongside inflation woes deteriorating gross margins etc. There is grey area noticed in accounting treatment pertaining to JV as well.
Focus should also be on the aluminum segment, which is going through a tough phase regarding operating leverage and low margins.

Supply-Chain Deforestation Laws as a New and Growing Source of Transition Risk

By Kyle Rudden

Recent and pending supply-chain deforestation regulations represent a new and ever-growing source of transition risks – financially-material risks with far-reaching ramifications.
Significant developments regarding the European Union’s pending forest-risk commodity laws (e.g., inclusion of natural rubber, addition of banks to its purview) inspired this Insight.
This Insight briefly summarises EU and U.K. deforestation regulations, then analyses potential risks and implications for issuers involved in related forest-risk commodity supply chains.

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Sep 29

Daily Brief Consumer: Leapmotor, Lawson Inc, Oyo, LG Energy Solution, Selamat Sempurna, Netflix Inc, Borgwarner Inc and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

Leapmotor IPO – Weak Demand but Concentrated Allocation
Leapmotor IPO: Trading Debut
Lawson Confirms Seijo Ishii IPO
Oravel Stays (Oyo) Pre-IPO – Addendum Updates – Don’t Let the +ve EBITDA Mask Its Underlying Issues
TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging
Leapmotor IPO: Thoughts on First Day Trading
Selamat Sempurna (SMSM IJ) – Filter Me Please
Ad-Based Streaming: Are We Sure This Is Netflix’s Panacea (Or Disney?)
BorgWarner Inc: The Rhombus Energy Acquisition & Other Drivers

Leapmotor IPO – Weak Demand but Concentrated Allocation

Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
In this note, we will talk about the demand for the deal and other trading dynamics.

Leapmotor IPO: Trading Debut

By Shifara Samsudeen, ACMA, CGMA

Leapmotor (9863 HK) priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.
The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.
Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.

Lawson Confirms Seijo Ishii IPO

By Michael Causton

Lawson Inc (2651 JP) has confirmed it will list its upscale supermarket subsidiary, Seijo Ishii early next year.
Seijo leads in premium supermarket retailing and is growing as fast as the wealth market does, with plenty of room left to expand.
Seijo Ishii is now building its own production and import capabilities to increase originality and could begin to challenge even some of their larger rivals.

Oravel Stays (Oyo) Pre-IPO – Addendum Updates – Don’t Let the +ve EBITDA Mask Its Underlying Issues

By Clarence Chu

Oyo (1698548D IN) is looking to raise around US$700m in its upcoming India IPO. The IPO will consist of both a primary and secondary portion.
Oyo runs a digital platform that serves as a hotel and home aggregator between patrons, which include owners and lessors, and customers, such as travelers and guests booking for accommodation.
Since our last notes, Oravel Stays (Oyo) had filed its addendum, containing both its full-year performance for FY22, and its most recent 1Q23 performance (period ending Jun 2022).

TIGER (FnGuide) Top 10 ETF Rebalancing: Noteworthy Changes Emerging

By Sanghyun Park

There was a substantial increase in the AUM even in the current market condition. More funds must have sought blue chip stocks as relatively safe assets in this volatile market.
Celltrion and LG Energy Solution will likely replace KB Financial and Shinhan Financial. On the other hand, POSCO is out of the race even with a +5%p float rate change.
LG Energy also has an up-weight event of the KOSPI 200. Since these passive flow events have an interval of only one day, we expect a fairly concentrated passive impact.

Leapmotor IPO: Thoughts on First Day Trading

Leapmotor (9863 HK) has priced its IPO at HK$48 per share, at the lower end of the indicative IPO price range of HK$48-62 per share.
At the above price, the company raised net proceeds of approx. HK$6,057.4m at a market capitalisation of HK$54.9bn and a post-money EV of HK$45.9bn.
The HK offering was undersubscribed while the international offering was initially oversubscribed by 2.33x and the unsubscribed portion of the HK offering was later reallocated to international offering.

Selamat Sempurna (SMSM IJ) – Filter Me Please

By Angus Mackintosh

Selamat Sempurna (SMSM IJ) is one of the most interesting industrial companies in Indonesia but also the largest filter manufacturer in South-East Asia for heavy equipment and autos.
The company mainly produces filters for the replacement market under its Sakura brand, with Indonesia being the major growth driver along with the US but it exports to 120 countries.
The company has an almost second-to-none track record for growth in both profits and dividends, with current valuations looking attractive.

Ad-Based Streaming: Are We Sure This Is Netflix’s Panacea (Or Disney?)

By Aaron Gabin

Netflix has had a slew of upgrades recently on bullish estimates for its coming advertising supported tier…with the upgrades buying into Netflix’s exorbitant CPM demands.
We think advertising supported is revenue accretive for the US and Canada, but question how this works out internationally.
Disney is far better positioned for AVOD. It has a developed ad infrastructure, owns all its content, and has better brands to sell advertising against.

BorgWarner Inc: The Rhombus Energy Acquisition & Other Drivers

By Baptista Research

BorgWarner’s second quarter performance was strong and it delivered an all-around beat despite a slight decline in global output.
The company outperformed in North America and Europe and had sales of nearly $3.8 billion, an increase of around 7%.
The first line of the company’s heavy-duty electric trucks, which is anticipated to be announced in 2024, will use this battery system.

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Sep 28

Daily Brief Consumer: US Dollar Index, Rakuten Inc, Swedish Match AB, Mitra Adiperkasa, Tokyo Stock Exchange Tokyo Price Index Topix, Vipshop Holdings, iShares Micro-Cap ETF, Tesla Motors, Omnicom Group and more

By Smartkarma Daily Briefs | Consumer, Daily Briefs

In today’s briefing:

GMO Q2 2022 Quarterly Letter
Rakuten: Two Consecutive Quarters of Narrowing Mobile Losses Could Change Price Momentum
STOXX Europe Quiddity Leaderboard Dec 22: Five Intra-Review Changes, Porsche Leading The Race
Mitra Adiperkasa (MAPI IJ) – Universally Retail
Main Issue Is the Content Rather than the Progress in Complying with the Corporate Governance Code
Vipshop: Rebound in Chinese Apparel Sales Should Trump Conservative Management Guidance
Summers Value Partners Q2 2022 Investor Letter
Tesla’s Q3 Ests Are Fading On Weaker China Sales—Again
Omnicom Group Inc: Catering To The Gaming Market & Other Developments

GMO Q2 2022 Quarterly Letter

By Fund Newsletters

Equity investors in countries with overvalued currencies have two ways to lose and those with undervalued currencies have two ways to win.
Today’s strong USD looks, in the end, to be our currency and our problem.
Keep an eye out for dangerously destructive economic policies, but don’t use that as an excuse to avoid the asset class entirely.
The yen and euro are at their cheapest levels in decades and hedging emerging market equities would be an expensive proposition even if the currencies weren’t generally cheap versus the USD.

Rakuten: Two Consecutive Quarters of Narrowing Mobile Losses Could Change Price Momentum