Consumer

• Mercedes-Benz Group (MBG GR)’s EBIT fell 30% in 2024 and another 24% in Q12025; management expects significantly lower earnings &free cash flow in 2025 amid rising capex, weak pricing and tariffs
• China & JV Risk: 34% of units sold in China yield limited profit. EV price wars and slowing demand in the region continue to erode margins.
• Valuation Trap: Despite a low P/E (~8x FY25e), high dividend yield (~8%), the cheap valuation may be unsustainable as structural pressures mount from tariffs, EV transition costs, and falling RoS.

• Since I recommended Havas about a month and a half ago, the stock is up about 19% while the Euro has appreciated ~4%.
• As such, the position has appreciated by ~23% in a month and a half.
• While my price target of €1.89, implies additional upside of 20%, the stock is not as compelling of a bargain today. I plan to sell my HAVAS shares and redeploy proceeds into higher conviction ideas.

• Alibaba Cloud is doubling down on globalization with a bold new strategy and 380-billion-yuan ($52.7 billion) investment plan aimed at creating a unified global cloud network and accelerate the international rollout of its AI offerings.
• The initiative seeks to establish Alibaba Cloud as the digital backbone for China’s next generation of global companies.
• Speaking at the Alibaba Cloud “Go Global Summit” on Thursday, Wu Yongming, Alibaba Group CEO and Alibaba Cloud chairman, said China’s globalization is entering a new era — one led not just by product exports but by the global rise of Chinese technology, brands and advanced manufacturing.

• I’m closing my Garrett Motion (GTX) recommendation.
• I’ve been trying to understand why the stock has been so strong since reporting earnings, and I can’t figure it out.
• The quarter was fine but not exceptional. The story remains the same. 

• BYD (1211 HK) has been rallying hard since its 309.80 bottom in early april, the stock closed at 465.20 last Friday, a +50% rally! Probably well deserved.
• This insight analyzes the short-term tactical outlook on a WEEKLY time period basis. Our model finds that the stock is currently very overbought, however some upside is still possible.
• You may want to consider hedging your bets with some puts (probably cheap at this point), 1-2 weeks expiry, to protect against a (probably mild), upcoming pullback.

Dentsu Group’s Q125 figures show 0.2% organic net revenue growth and an improvement in operating margin. Japan performed well, with international operations more challenged. Dentsu’s new management plan aims to drive profitability and competitiveness, particularly ex-Japan. It targets up to ¥50bn of operating cost reductions, returning the group to consistent profit growth from FY27. The ¥50bn cost of reshaping the group weighs on FY25 profits but should result in a simpler organisation. A further ¥45bn will be invested over three years with the aim of no markets being loss-making by FY26. The group will focus on the key Japanese and US markets, with the international business centred on adding value to Dentsu’s existing strengths in media. The goal is to achieve a mid-teens return on equity by the plan’s completion.

Games Workshop Group’s year-end (2025) trading update shows a better Q4 than we expected, notably in its core business with high operational gearing. Licensing revenue and profit are broadly in line with our prior estimates. FY25 has been a great year, helped by the launch of the fourth edition of Age of Sigmar, following a strong FY24 when the tenth edition of 40K was released. All eyes will be on coming products in the next financial year. FY26 will begin to see the full-year impacts of the recent US tariffs but the weak US dollar versus sterling is not helpful for the translation of earnings.

Smiths News’ PBT increased by 11% in H125, a combination of higher profits and lower financing costs as both debt and debt margins declined. However, in addition to this and perhaps more exciting is confirmation that Smiths has appointed a managing director for its recycling operations from within the industry, a clear endorsement of the potential in this area. Furthermore, its new activities are already gathering momentum, which is mitigating the structural decline of the news and magazine activity and, we believe, has the potential to result in long-term profit growth. This in turn underpins cash generation and dividends, and could see further distributions. We have maintained our operating profit forecasts and valuation of 93p/share, but reduced our FY25 net debt estimate.

• DBOL reported a revenue increase in FY25, driven by sugar and country liquor segments, but faced profit headwinds from lower ethanol volumes and sugar recovery issues.
• Despite a challenging sugar season with reduced recovery rates and ethanol sector pressures, DBOL is strategically diversifying into grain-based ethanol and aggressively expanding its country liquor market share.
• The focus on varietal replacement in cane, commissioning of a grain distillery, and aiming for country liquor market share provide avenues for future margin improvement and stability, despite near-term risks.

Games Workshop Group’s year-end (2025) trading update shows a better Q4 than we expected, notably in its core business with high operational gearing. Licensing revenue and profit are broadly in line with our prior estimates. FY25 has been a great year, helped by the launch of the fourth edition of Age of Sigmar, following a strong FY24 when the tenth edition of 40K was released. All eyes will be on coming products in the next financial year. FY26 will begin to see the full-year impacts of the recent US tariffs but the weak US dollar versus sterling is not helpful for the translation of earnings.

• GMO Internet (4784 JP) was created by the reverse takeover of a listed cad/media company by its parent company’s “internet infrastructure” business. GMO Internet Group ended up with ~98%.
• In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.
• The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn’t shortable… so what next? Pain, and an ECLWO.

• The Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) AGMs to elect directors and approve the share exchange agreement to merge the two. 
• 10% Tsuruha shareholder Orbis objects to the merger ratio AND the later tender whereby Aeon goes to 51%, saying everything is underpriced. ISS/GlassLewis recommend voting against the merger.
• I haven’t seen the proxy reports but I’ve done the math. Investors/arbs should look at the possibilities/probabilities and understand what dependencies exist. Shareholders are not helpless, no matter the outcome.

• With 90% of the review period for the August rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) complete, there could be one change for the index.
• DigiPlus Interactive (PLUS PM) should replace Bloomberry Resorts (BLOOM PM) in the index. Bloomberry Resorts (BLOOM PM) also has some global passive selling at the close on 30 May.
• DigiPlus Interactive (PLUS PM) is up 25x over the last couple of years and is up 46% since we identified the stock as a potential index inclusion.

• Sumber Alfaria Trijaya (AMRT IJ) booked a surprisingly strong set of 1Q2025 results, going against softer consumer sentiment, underlining Alfamart as a supplier of essential goods. 
• The company cut promotional spending in 1Q2025 by half, which improved profitability by 30% QoQ, but it still booked SSSG of 8.8% YoY, outperforming other consumer staples players. 
• Alfamart continued to open new stores in 1Q2025, targetting 1,000 new outlets this year. This should help drive growth in 2025, along with SSSG. Valuations remain attractive versus growth prospects.

• Eco-Shop Marketing (ECO MY) raised around US$227m in its Malaysia IPO, after pricing the deal at the bottom of the range at M$1.13/share.
• It is the largest dollar chain in Malaysia, as per the number of stores it operates, as of 31 October 2024.
• In our previous notes, we talked about the company’s historical performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we talk about the trading dynamics. 

• Alibaba (BABA) reported C1Q25 top line in-line with our estimate and consensus. Taobao/Tmall (T/T) outperformed while Cainiao and Int’l commerce underperformed. 
• Stabilization of domestic e-commerce is a major positive. However, on-demand e-commerce at home and video e-commerce abroad are two global growth drivers, 
• We see new challenges emerging following business stabilization. We believe the management is up to the task. We keep BABA in our TOP BUY list and reiterate rating and TP.

• Definitive anti-dumping duty (ADD) imposed on solar glass imports from China and Vietnam until December 2029; Standalone Indian operations showed significant improvement in Q4 and FY25.  
• The ADD provides a stable pricing environment and growth catalyst for domestic solar glass manufacturing. Improved domestic performance underscores resilience despite international market volatility.  
• Reinforces a positive outlook for the Indian business due to favorable regulatory support and robust demand. However, the German subsidiary’s performance remains a key monitorable.

• Newton Golf (NASDAQ: NWTG) is an innovative, technology driven golf company with a growing portfolio of golf products, including putters, golf shafts, golf grips, and other golf-related accessories.
• The company went public in August 2023 raising $11.6 million in net proceeds.
• The company announced its entry into the golf shaft market in November 2023.

• Airbnb’s financial results for the first quarter of 2025 reflect both strengths and challenges as the company continues to navigate a dynamic global travel landscape.
• The company reported revenue of $2.3 billion, a 6% year-over-year increase.
• However, it’s worth noting that without the impact of foreign exchange and calendar factors such as Easter shifting from Q1 2024, this revenue growth would have been 11%.

• We are reiterating our Buy rating, $58 price target and projections for Build-A-Bear Workshop with the company announcing 1QFY25 (April) results before the open on Thursday.
• We believe, driven by strong Easter and Spring offerings, further expansion of the Mini Beans, and continued growth in the franchising and commercial space, revenue for 1Q will be solid.
• That said, the near term question remains the impact of tariffs on overall margins, as Build-A-Bear purchased 58% of merchandise from China and 38% from Vietnam in FY24, with China projected by management to account for less than half of merchandise in FY25.

• Metaplanet’s secret weapon? Moving-strike warrants that raise equity into strength—fueling BTC buys while sidestepping the deep discounts typical of Japan’s small-cap raises.
• Forget buybacks. Metaplanet is redefining shareholder value by issuing stock, not retiring it—turning dilution into accretion via Bitcoin per-share growth.
• A 4.6x mNAV premium gives Metaplanet unmatched BTC buying power—creating a capital flywheel that most traditional treasuries can only envy.

• Fast Retailing (9983 JP) presents a mixed outlook characterized by strong earnings momentum tempered by some geopolitical and macroeconomic challenges. Analyst opinions are mixed but consensus is mostly = “Hold”.
• The stock started a pullback this week and is reaching a support zone that offers the possibility of entering LONG positions at a discounted price.
• This is a short-term tactical setup but the stock can be hold for the long run if the rally continues in the coming weeks.

• Chery Auto, one of China’s oldest state-owned carmakers and #2 domestic passenger vehicle brand, plans to raise more than $1B in its upcoming IPO in Hong Kong.
• The company has been China’s top vehicle exporter for 22 consecutive years since 2003. The automaker was founded in 1997 Mr. Yin Tongyue, Chairman & President of Chery Auto.
• Chery Auto is an extremely ambitious company with strong overseas presence. The biggest revenue growth driver will be higher NEV sales in the coming years, in my view.

• Allied Blenders & Distillers (9844250Z IN)‘s FY25 marked a pivotal shift with record profitability, fueled by premiumization, cost efficiency, and expansion into international markets, notably through its luxury portfolio.
• Record profitability and a strengthened balance sheet position ABDL for aggressive expansion in the high-margin super-premium and luxury segments, supported by strategic CapEx.
• ABD’s transformation into a premium-focused brand with significant global expansion potential, particularly in luxury segments, positions it for sustained growth and higher margins.

• Volume Dip in 2024:Yadea Group Holdings (1585 HK) ‘s total unit sales fell 21% YoY amid regulatory shifts, inventory destocking, and weak market sentiment.
• Innovation Resilience: Despite headwinds, Yadea launched sodium-ion e-bikes, reinforcing its R&D leadership and product differentiation.
• Positive 2025 Outlook: Management guides for rebound driven by “trade-in” policy, regulatory clarity, and international expansion.

• ADF Foods (ADFL IN) reported robust Q4 & FY25 results, driven by strong growth in key brands and strategic adjustments in North American distribution.
• The company’s focus on improving distribution and expanding manufacturing capacity signals a stronger platform for future growth, particularly for its flagship Ashoka brand.
• The strategic initiatives and consistent performance reinforce a positive outlook, suggesting continued market share gains and profitability for ADF Foods.

• We are gradually building a high-conviction coverage of ideas for mid and small-cap companies in the Philippines.
• We established metrics focusing on high ROCE, sustainable growth of 10-15% year-over-year, robust balance sheets, and prudent capital allocation, essential elements for identifying potential multi-bagger opportunities.
• With the Q1 earnings season on, we update our readers on DigiPlus Interactive (PLUS PM), Shakey’s Pizza (PIZZA PM), The Keepers Holdings (KEEPR PM), and more. 

Greggs’ AGM trading update indicates an improvement in revenue growth in recent months versus a relatively weak start to the year, as management notes better trading conditions, while the market context remains challenging. With no changes to profit expectations for FY25, management points to profitability being skewed to H2 given the phasing of store openings and the anticipated volume recovery against easy comparatives. The prospective multiple of 15.7x looks attractive in a historical context.

• As in Q424, a sharp increase in OpEx led to margin compression at Trip.com in Q125
• Trip.com’s revenue growth in Q125 slowed vs Q424, but platform probably gained share
• Within China’s tourism segment, we still think the airlines can outperform Trip.com

• In this edition: • Heineken | Femsa exits Heineken after 15 years • InPost | High Court injunction: Yodel acquisition placed on pause • InPost/PostNL/DHL | 22% Dutch online shoppers abandon shopping carts due to delivery concerns • E-commerce/E-commerce logistics | EU to impose EUR 2 tax on low-cost items from China • Consumer confidence | stabilized at 19 months’ low in May

• In my stub monitor flagged in StubWorld: Toyota Industries/Motors, GMO Internet, I see Melco International Development (200 HK) is trading “cheap” to Melco Resorts & Entertainment (MLCO US).
• Last month, Melco proposed one new rights share for two existing shares at a subscription price of HK$1.0286/share, a 72.93% discount to undisturbed, and a 64.28% discount to the TERP.
• Lawrence Ho will backstop ~54% of the rights, if need be. Depending on the level of support for the rights, expect Lawrence to further chip away against minorities.

• Total travelers grew by 26% YoY in China in 1Q25, up from 13% YoY in 4Q24.
• Trip.com’s total revenue grew by 16% YoY in 1Q25, among which hotel booking grew by 23%.
• We believe operating margin will be stable, as the growth of sales and market expense has been slowing down.

• Given the rapid aging of Japan’s population, if the current composition of the board of directors continues, the number of directors will further age in the future.
• A board that embraces diverse age range is likely to embrace people with diverse backgrounds and skillsets, and a diverse board composition is likely to have positive impact on management.
• In Japan, with strong peer pressure, CEOs controlling human resources, % independent directors and female board members in 40% and 15%, many companies are hesitant to hire talent they need.

• JD.com C1Q25 revenue exceeded our estimate/consensus by 2.4%/4.3% and adjusted NI by 19%/20%, thanks to better-than-expected cross selling from trade-in subsidies and gross margin;
• We, however, raise full year new businesses operating loss from RMB(6bn) to RMB(12bn). We estimate 80% of the loss will come from food delivery;
• In lieu of the continued uncertainty in take-out investments, we remove JD.com from TOP BUY while cut TP from US$58 to US$54.

• Welspun Living targets INR 15,000 crore revenue by FY27, focusing on debt reduction and expanding its non-core businesses, diversifying its growth and financial resilience.
• The company’s emphasis on sustainability and innovation, including renewable energy initiatives, positions it as a leader in eco-friendly home textiles, responding to market shifts.
• Despite fierce competition, Welspun Living’s strong brand portfolio and global presence reaffirm its leadership in the home textiles market, making it well-positioned for long-term growth.

The key takeaways from Topps Tiles’ (TPT’s) H125 results are: 1) there is meaningful progress on the Mission 365 initiatives announced one year ago; 2) the company is back into revenue and profit growth despite inflationary cost pressures, demonstrating its operational gearing; and 3) management is in the early stages of being able to manage CTD Tiles, which is much needed following a prolonged CMA review during which trading has been relatively weak. The more encouraging trends in trading that were evident in H125 have continued into strong current trading in the first seven weeks of H225, with 9.5% y-o-y revenue growth at the group level.

Borussia Dortmund’s strong Q325 results reflect a relatively busy football schedule with just under one-half of the cumulative home games of the season played in the period. It is safe to say the most important result came after the Q325 results were published, as the first team qualified to play in the Champions League in 2025/2026. An impressive surge with seven wins in the last eight games took the club to the treasured fourth position, having been in 11th position prior to those games and fifth ahead of the final game. The last time the team was in the top four of the Bundesliga this season was after the third game. The replacement of the first team coach at the end of January 2025 certainly has paid off. We make no change to our estimates.

• Key 1Q25 takeaways include: 1) rising trade-in activity continues to drive growth, powerful lead indicators around ongoing government subsidies on new mobile phones, accelerating momentum with JD.com, and continued growth in AHS offline stores 2) more recent initiatives to enhance AHS Recycle’s brand, with a focus on the company’s comprehensive suite of services and competitive pricing, likely further stimulates growth in 1P business volumes and related contributions and 3) while management remains focused on reinvesting in the business to further accelerate top line growth, we look for senior officials to increasingly return excess capital to shareholders as profitability continues to scale via ongoing share repurchases and the potential for introducing a regular quarterly dividend in the not-too-distant future.

• Eastroc Beverage Group (605499 CH) (EB), a China-based functional beverage company, aims to raise around US$1bn in its H-share listing.
• According to Frost & Sullivan (F&S), EB has been the largest functional beverage company in China in terms of sales volume for four consecutive years since 2021.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• We are reiterating our Buy rating, projections and $58 price target for Build-A-Bear Workshop after visiting stores in Connecticut and Long Island.
• After a strong Mother’s Day, the company has pivoted to the traditional graduation season with exciting new looks and “furry friends” to drive material purchases.
• However, the big new driver is the launch of the Build-A-Bear Fruit Stand display, which combines furry friends and Mini Beans into a compelling and colorful offering to drive multiple seasonal purchases.

• Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
• In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
• I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now. 

• Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
• The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline. 
• These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.

• With the review cutoff done, there could be one change for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in June.
• As the highest ranked non-ETF member, Seres Group (601127 CH) could replace China United Network A (600050 CH) in the ETF at the close on 20 June.
• China United Network A (600050 CH) was added to the ETF in March, so this could be a very short stint in the ETF for the stock.

• Since April 28th we traced a path for Toyota Motor (7203 JP)‘s stock price, first here (forecast: going down) and then here (forecast: potential 2-week pullback to 2578).
• Last week Toyota Motor (7203 JP)pulled back to 2598 (pretty close to our 2578 target). The stocks closed down for 2 weeks, as predicted. A rally may be starting.
• Rumors of an acceleratingof privatization bid for Toyota Industries (6201 JP)could act as a fresh catalyst for the stock—aligning with our model’s forecast from May 8th.

• TSE plans to mandate the development of IR system, but since most companies disclosed that they have already taken action, fewer companies will move to do something from now on.
• Analysis of IR disclosure and stock valuations showed that IR disclosure scores did not differ among the five groups of companies by percentage change in Tobin’s Q. 
• The fact that many companies haven’t been able to provide capital profitability and management strategies that investors seek has led to reluctance to hold briefings to communicate with overseas investors.

• Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
• Preceding my comments on the Toyota Group and GMO, are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Zhou Liu Fu’s fundamentals would not significantly improve due to the surge in gold prices, but would deteriorate instead due to rising raw material costs and reduced customer demand.
• The franchise model and declining profit margins have always been the issues. Zhou Liu Fu also has faced dual competition from traditional jewelry companies and emerging jewelry brands.
• We are not optimistic about Zhou Liu Fu’s performance outlook. Valuation of Zhou Liu Fu could be lower than peers and the industry average.

• We are reiterating our Buy rating, projections and $4 price target for Vera Bradley after visiting stores in Connecticut and Long Island.
• May has seen a continued focus on key summer looks, with the main line stores emphasizing travel, Star Wars, new floral patterns and lightweight fabrics, while the outlets are fully focused on beach, straw and travel driven items.
• Further, after the success in the outlets, the excitement for the Peanuts launch at the main line stores has been strong.

• Matsuya Co Ltd (8237 JP) had a terrific FY2024, posting a new sales record at its Ginza store, the first since 1992. 
• There are worries that this year or next will be the peak given the ongoing decline in sales to locals, and if a strengthening Yen puts paid to tourist largesse.
• The same headwinds are hitting all the major department store firms, including Isetan Mitsukoshi Holdings Ltd (3099 JP),Takashimaya (8233 JP) and J Front Retailing (3086 JP).

• As expected, BYD (1211 HK) will be added to the Hang Seng TECH Index (HSTECH INDEX) in June following the launch of God’s Eye, its Advanced Driver-Assistance System (ADAS).
• BYD (1211 HK)‘s inclusion results in China Literature (772 HK) being deleted from the index. China Literature stock should drop over the near-term.
• Estimated one-way turnover at the rebalance is 13% resulting in a round-trip trade of HK$46.5bn (US$5.95bn). There are 16 stocks that have at least 1x ADV to trade from passives.

• Buybacks are a central part of Corporate Japan’s effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
• This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn’t even include the biggest buybacks extant by March-end companies.
• We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.

• Management claimed 4Q25 total revenue should grow by 10% YoY excluding two sold subsidiaries.
• The growth rate of customer management revenue rose to two digits in 4Q25.
• The main business margin was stable and most of the minor business margins rose YoY in 4Q25.

• Midea Group (300 HK) and ZTO Express Cayman (2057 HK) will be added to the Hang Seng Index (HSI INDEX) in June to take us up to 85 index constituents.
• Estimated one-way turnover is 2.9% and the estimated round-trip trade is HK$11.3bn (US$1.44bn) with over 1x ADV to trade in the adds and in one stock with a FAF increase.
• There could be a short-term drop in the AH premium for Midea Group while this inclusion ensures ZTO Express Cayman is a member of all major indices where eligible.

• In this insight, we present the flows to buy and sell for each of the top 6 Hang Seng Index Family indices based on estimated tracking AUM.
• The indices: Hang Seng Index (HSI), HS Tech Index (HSTECH), HS China Enterprise Index (HSCEI), HS HK Biotech (HSHKBIO), HS Internet & Infotech (HSIII), and HS Healthcare Index (HSHCI).
• By Quiddity calculations based on the 16 May close, there is one-way flow across these six indices of HK$34,556,596,089.99 (approximately), to trade on 6 June. 

• 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: Insignia Financial (IFL AU), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP), ZEEKR (ZK US), Mayne Pharma (MYX AU), Smart Share.
• Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Nissin Corp (9066 JP), Sinarmas Land (SML SP), Fujitsu General (6755 JP), Torii Pharmaceutical (4551 JP). 

• Back on the 27th March, Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
• Dollarama Offered A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the backing of TRS’ largest shareholder, Kin Group (20.8%). 
• The Scheme Booklet is now out, with a Scheme Meeting on the 23 June, and expected payment on or before the 22nd July. The IE (Kroll) says “fair & reasonable“.

• As expected, Bloks Group (325 HK), Guming Holdings (1364 HK) and Mixue Group (2097 HK) will be added to the Hang Seng Composite Index (HSCI) in June.
• The HSCI inclusion will result in the stocks being added to Southbound Stock Connect from the open of trading on 9 June and that could result in sizeable inflows.
• Use stock price spikes to trim positions in Bloks Group (325 HK) ahead of lock-up expiry in July, and in Guming Holdings (1364 HK) ahead of lock-up expiry in August.

• Domestic Demand Sluggish:Hyundai Motor India (HYUNDAI IN)’s Q4 FY25 profit declined 3.7% YoY as weak domestic sales persisted, partly offset by 14% YoY export growth and price hikes.
• SUV Focus Drives Mix Shift: SUVs formed 69% of domestic volumes in Q4, benefiting from rising first-time buyer interest and driving improved average selling prices.
• Valuation Fair; Profitability to Soften: Stock trades at ~27x EPS. Near-term margins may be pressured by depreciation from the underutilized new Pune plant ramping up in FY26.

• Glass Lewis has now joined ISS in recommending holders vote against the Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP) merger, presumably as it relates to the ratio.
• Mayne Pharma (MYX AU), ASIC AND Cosette have effectively signed off on the Scheme Booklet’s veracity. That should be assuring to investors. 
• Canvest Environmental Protection Group (1381 HK)‘s Scheme comfortable got up – despite a last minute hiccup – and poor governance – to adjourn the meeting.

• Tsi Holdings (3608 JP) is a leading apparel company in Japan. Net cash was 45 billion yen at end of February 2025, representing 58% of its current market cap.
• The company has an excellent record of increasing its BPS, reducing outstanding shares, and buying back shares. Valuations have become more attractive.
• Its share price has had a nice pullback in the past three months (down 22% from its peak levels in February 2025). 

• In FY03/25, sales increased by 72.5% YoY, EBITDA by 55.3% YoY, and operating profit by 33.9% YoY.
• For FY03/26, the company forecasts sales of JPY270.0bn, EBITDA of JPY14.0bn, and operating profit of JPY8.0bn.
• The company targets adjusted EPS of JPY175.0 in FY03/30, with a five-year CAGR of 11%.

• Sales and operating profit increased YoY; Membership and Medical segments saw higher sales and profits, while Hotel and Restaurant segment had lower profits.
• Contract value for hotel memberships increased YoY; sales and operating profit rose due to higher contract value and improved margins.
• FY03/26 forecast: sales JPY259.0bn (+3.9% YoY), operating profit JPY27.5bn (+4.3% YoY), net income JPY19.0bn (-5.7% YoY).

• After falling to a 2025 low, Bean prices have rallied strongly to clock a nine-month high. Macro conditions augur well for the rally to be sustained. 
• Implied vols on bean options have dropped even as prices rise. Spike in skew points to reduced demand for downside risk hinting at upward price buoyancy.  
• Technical charts paint a broadly bullish picture with potential for rally ahead remaining intact. However, the bullish momentum might take a breather in the near term.   

• Even in 93.8% of prime companies that disclose financial results in English, many disclose only summaries and financial statements in English, while few provide qualitative information and notes in English. 
• The belief that the company doesn’t provide sufficient information to shareholders to control AGM is common to reluctance to disclose documents in English, which are highly demand by overseas investors.
• The idea of “not wanting to provide overseas investors with sufficient information,” which has ingrained in many companies, is opposed to movement to “improve the quality of dialogue with investors.”

• FY03/25 revenue was JPY60.6bn (+2.4% YoY), operating profit JPY4.7bn (+2.4% YoY), net income JPY2.9bn (-6.0% YoY).
• Medical Services revenue rose 4.2% YoY, Home Furnishing and Health revenue decreased 1.3% YoY, with GPM at 54.6%.
• FY03/26 forecast: revenue JPY62.3bn (+2.9% YoY), operating profit JPY4.8bn (+1.1% YoY), net income JPY3.1bn (+3.5% YoY).

• The company reported a transaction volume of JPY 270.0bn (+10.2% YoY) and revenue of JPY 45.4bn (+14.6% YoY).
• For FY03/26, the company forecasts revenue of JPY 47.0bn (+3.6% YoY) and operating profit of JPY 3.4bn (+29.0% YoY).
• The company plans to eliminate COVID-19 cumulative losses and resume dividend payments for the first time since FY03/20.

• We are reiterating our Buy rating, projections and $20 price target for Lands’ End after reviewing the May catalog.
• As we start to enter the “buy now wear now” swim season, Lands’ End has materially ramped overall newness, with new technical advances for the core Tugless line, multiple additions to the Slendersuit offerings and new seamless looks, all of which serve to emphasize the company’s technological leadership and ability to offer multiple choices for different body sizes in the core swimwear offerings.
• Further, there remains continued expansion/emphasis on pre and post swim looks, with swim dresses, wraps and cover-ups.

• With two days left in the review period, Pop Mart International Group L (9992 HK) could replace China Railway Group Ltd H (390 HK) in the FXI ETF in June.
• The inclusion of Pop Mart International Group L (9992 HK) in the iShares China Large-Cap (FXI) (FXI US) will add to the potential inclusion of the stock in other indices.
• Short interest has been increasing in both stocks. Multiple index inclusions could result in short covering in Pop Mart while China Railway Group‘s stock price has been bouncing off its lows.

• Tata Motors posted its highest-ever annual revenue and PBT for FY25, with strong sequential growth in Q4 driven by robust performance in both commercial and passenger vehicle segments.
• The company successfully managed to navigate global trade and tariff challenges, improved its profitability through cost-saving measures, and expanded its leadership in electric mobility.
• The results demonstrate Tata Motors’ resilience and long-term growth strategy, especially with a continued focus on electric vehicles and new product innovations.

• Asics reported its first-quarter results during trading hours, with the stock closing down 8.6% on the day.
• While headline numbers were strong, investors may have been disappointed by the lack of upward revision to full-year guidance.
• Our positive view on Asics remains unchanged. The company is successfully navigating geopolitical and macro uncertainties while strengthening its brand.

• Geely announced that total revenue increased by 25% YoY in 1Q25.
• Sales volume continued to grew strongly by 53% YoY in April 2025.
• The operating margin improved YoY for the third quarter in 1Q25.

• FY03/25 revenue increased 13.8% YoY to JPY18.0bn, driven by membership growth in domestic Anytime Fitness clubs.
• Operating profit decreased 4.7% YoY to JPY3.3bn due to higher costs, despite revenue growth and cost-curbing efforts.
• FY03/25 saw 71 club openings and 11 closures, ending with 1,194 clubs and 974,000 members.

• This note examines Hero Motocorp (HMCL IN)’s market share trajectory in the context of broader two-wheeler industry trends.
• It also highlights internal leadership churn and execution issues post split from Honda Motor (7267 JP) 
• Finally, this note reviews the strategic outlook and key challenges ahead for the company, despite its discounted valuation compared to peers.

• Green Tea Group (GTG) raised around US$ 110m in its Hong Kong IPO in its Hong Kong IPO.
• Green Tea is the fourth largest Casual Chinese Cuisine player in Mainland China, it has been gaining market share historically and is likely to continue doing so.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.

• Shakey’s Pizza (PIZZA PM) delivered a soft Q1 FY25 with revenues/profits up 14%/6% YoY, due to a slight GP margin contraction (to 22% vs 23.3% in Q1 FY24)  
• The company reiterated its guidance of double-digit revenue/profit growth for FY25, with improvements in sequential quarters. 
• Trading at 10.1x FY25e PE, with the street having low expectations on its double-digit growth trajectory, this is a stock worth watching. 

• Revenue decreased by 0.8% YoY to JPY347.2bn, while operating profit increased by 7.3% YoY to JPY19.7bn.
• Recurring profit rose 15.6% YoY to JPY18.0bn; net income attributable to owners of the parent fell 1.8% YoY.
• Revenue achievement rate was 103.6% against the full-year forecast; operating profit achievement was 106.6%.

• Revenue increased by 4.5% YoY, with operating profit up 50.5% YoY, achieving 100.2% of revenue target.
• Automotive-related business saw increased demand for HEVs and HDD components, boosting revenue and profit significantly.
• FY03/26 forecast: Revenue of JPY800.0bn, operating profit of JPY47.0bn, with a dividend payout ratio of 33.6%.

• Last year, GMO injected its internet business into GMO Internet (4784 JP) and took shares as consideration. Somehow, GMO Internet got a TOPIX inclusion earlier this year. 
• The company has 1.24% float of 3.4mm shares. GMO Internet Group – the parent – will now offload 91.7mm shares in an equity offering to meet TSE Continued Listing Requirements.
• That is about ¥279bn at current price against float of ¥10bn. Full market cap is ¥850bn. That’s 170x Dec25e Net Income. I expect the price will fall. You were warned. 

• With the review period complete, there could be 50 changes for the CSI Smallcap 500 Index and 100 changes for the CSI 1000 Index in June.
• There are a lot of migrations expected between the two indices and the impacts for those stocks are lower with much of the flow cancelling out.
• The outright adds have outperformed the outright deletes over the last few months with the profit-taking in March giving way to renewed outperformance in April.

• GMO Internet (4784 JP) has announced a secondary offering of 91.7 million shares, worth around US$1.9 billion.
• The selling shareholder is GMO Internet Group (9449 JP). The secondary offering aims to increase the tradable share ratio to satisfy the TSE Prime Market’s continued listing criteria.
• The offering represents 239.4 days of the 1-year ADV, the highest compared to the recent large Japanese placements. Pricing is likely to be on 5 June.

• Raymond Lifestyle’s stock plummets 60% in six months post-demerger, due to lots of governance lapses.
• Corporate Governance Crisis: CEO,CFO, Director Resignations, Delayed disclosures, Controversial Remuneration and Many More.
• The company gave excuses such as inflation, an IT incident, etc. in their management meeting after not being able to deliver the performance.

• In Webjet (WJL AU): Undisclosed Buyer Buying, I addressed the rumours that an undisclosed buyer with ~5% was seeking to add an additional 5% (19.6mn shares).
• On the 12th May, Helloworld Ltd (HLO AU) emerged with a 5.015% stake. The same day, BGH said it had 10.76%. BGH followed with a A$0.80/share NBIO.
• BGH wants a controlling stake in Webjet (WJL AU), and potentially maintaining the listing; suggesting an off-market Offer, with say, a 50% acceptance hurdle being one possibility. 

• On 12 May, Sankyo Co Ltd (6417 JP) announced a big share buyback worth 13.66% of total issued shares (excluding treasury shares).
• Aggregate amount of the purchase cost is up to 60 billion yen (9.7% of its current market cap).
• We continue to have a Positive view of Sankyo which continues to demonstrate its commitment to deliver higher shareholder returns through aggressive share buybacks.

• There is a brewing sibling conflict at the Kolmar Group. Kolmar Holdings and Kolmar BNH have clashed regarding the reorganization of Kolmar BNH’s board of directors.
• Yoon Sang-Hyun (brother) wants to shake things up. Yoon Sang-Hyun wants to appoint new members at Kolmar BNH’s BOD but his sister Yoon Yeo-Won is opposing this. 
• We see a higher upside for Kolmar Holdings. Our base case valuation of Kolmar Holdings is NAV per share of 14,675 won (57.5% upside from current levels).

• Last week, I wrote a quick article flagging the seemingly absurd valuation discrepancy of Chagee vis-a-vis beverage peers on the HK stock exchange i.e. Mixue and Guming, as well as Luckin Coffee on the OTC markets.
• Chagee currently trades around ~31 (doing extremely poorly on a good day), and at the bottom of its recent trading range; there is no analyst coverage and the firm has yet to report its Q1 25 results so it’s just really stuck in no-man’s land.
• I postulated then that delisting risk was an overhang on Chagee, a Chinese ADR, but lo and behold, it appears that the market has shrugged off a large portion of it for the large cap Chinese tech companies.

• Muji continues its impressive growth streak both at home and abroad – sales in March alone rose 33% in Japan.
• Muji has grown in part because of its ability to move into new categories, even cosmetics and food, possible because Muji’s biggest asset is how well it is trusted.
• The latest, with significant potential given inbound demand, is Muji Stay which includes its own hotels, rooms in other hotels and inns, as well as house rentals on Airbnb.

• Dividend cut reflects strategic shift: Porsche SE cut its 2024 dividend due to reduced Volkswagen inflows and focus on deleveraging, limiting its near-term appeal as a dividend pass-through holding structure.
• Diversification stillsSuperficial: despite claims of expanding into defense and infrastructure, Porsche SE’s portfolio remains 99% tied to Volkswagen and Porsche AG, making its diversification strategy more rhetorical than real.
• Discount to NAV remains high: Porsche SE trades at a 33.4% NAV discount, reflecting legal overhangs and structural inefficiencies. Favorable rulings could trigger re-rating if legal risks prove overstated.