Consumer

• On 12 March 2025, a minor Twitter account @nanahoshiuk started in January announced a website shiftnissantokyo.com where they point out the value proposition in Nissan Tokyo Sales (8291 JP). 
• The writeup is by a UK company led by a young man with an equity-investing career, some experience at an activist shop, who now runs a “Shareholder Activism Outsourcing Service.”
• The content sounds familiar to my piece in December, has a few unpolished edges, but clearly points out the value proposition. The stock deserves a re-visit. My comments are below.

• On 13 March, Alimentation Couche-Tard (ATD CN)’s management held its first press conference in Japan since it disclosed its Seven & I Holdings (3382 JP) offer.
• The Couche-Tard charm offensive was designed to pressure the Board to engage and facilitate a definite agreement. The press conference provided incremental new information.
• The Board’s next move will likely provide limited due diligence, partly to avoid a protest vote at the May AGM. However, the prospect of a Board-recommended binding proposal remains low.

• BYD will release its 2025 annual results on March 24.
• The stock price has risen by 38% since our last buy rating on January 6.
• However, we believe there is still an upside of 19% for the next twelve months.

• After the market close on 13 March, it was reported that SOQRI Co will be doing a partial tender offer public offering of 171,429 common shares of Socar.
• The tender offer period is from 14 March to 2 April. The tender offer price is 17,500 won which is a 21% premium to current price.
• Socar’s founder Lee Jae-Woong is pushing for a tender offer to solidify the control of Socar from Lotte Rental which has recently been purchased by Affinity Equity Partners.

• Amazon’s growing lead in Japan’s e-commerce market looks increasingly inexorable. 
• While growth in Japan was slower than some other Amazon markets, it still outpaced Rakuten. LY Corp did better but partly in reaction to poor results the year before. 
• Meanwhile, a recent survey suggests growing interest in brand-operated online stores, particularly to read more in-depth content and use brand-based points.

• Domino’s Pizza faced a mixed financial performance in the fourth quarter of 2024, with weaker-than-expected earnings leading to a stock decline, despite ongoing efforts to enhance value and operational efficiency.
• The company’s total revenue increased by 2.9% year-over-year to $1.44 billion but fell short of the $1.48 billion analyst consensus.
• Earnings per share rose by 9.2% to $4.89, just below Wall Street’s expectation of $4.90.

Dentsu has published its FY24 results, which show a strong Q424 in its Japanese business, ensuring that the group effectively met November’s net revenue guidance despite continuing weakness in international trading. As a result of higher discount rates and shifts in the international risk profile, Dentsu has taken a ¥210.1bn impairment charge, split ¥153.0bn in EMEA and ¥57.1bn in the Americas. The group has also now launched its new mid-term management plan (MTMP), targeting organic revenue growth of 4% in FY27, with operating margins of 16–17% by the plan’s completion. This involves a re-evaluation of the underperforming businesses within the group and laying solid foundations on which to build.

Cairn Homes’ FY24 results were robust and it has issued even more challenging targets for FY25. The Irish housing market remains undersupplied, which bodes well for its future, supported by government policies to prioritise housing delivery. The valuation remains attractive, with the stock trading on a price-to-earnings (P/E) ratio of under 11x and yielding nearly 5%.

British American Tobacco’s (BAT’s) strategy is to become a predominantly smokeless business, generating more than 50% of revenue (FY24: 17.5%) from smokeless products by FY35. The industry backdrop is favourable, with higher revenue growth expected as consumers move to new reduced-risk products. Having transformed its capabilities through scientific research, customer engagement and product innovation, management believes focused investment should enable BAT to continue capturing the enhanced growth opportunity with better returns. BAT is confident of higher profit growth in FY25 before hitting its full stride of 4–6% pa sustainable growth from FY26, comparable to BAT’s growth rates before FY22.

Games Workshop Group’s (GAW’s) trading update states core and licensing revenue in January and February 2025 have been better than expected, continuing the momentum in Q325 that was reported at the time of the H125 results. As a result, we increase our FY25 PBT estimate by c 9%, while leaving our FY26 estimate unchanged.

• The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
• One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
• So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.

• The increase in stock splits can be attributed to TSE requesting more effective measures from companies after market restructuring and to more companies whose stock prices have risen.
• Companies are obsessed with getting individual investors on their side. It seems that the interests of companies and TSE are aligned in conducting stock splits to increase individual investors’ shareholdings.
• Now that many companies want to increase the number of individual investors, it may be a good time to resolve the cost issue and consider changing the share unit system.

• BYD will release its 2025 annual results on March 24.
• The stock price has risen by 38% since our last buy rating on January 6.
• However, we believe there is still an upside of 19% for the next twelve months.

• The tire majors losing volume   
• Smaller tire makers gaining prominence   
• Most tire majors saw flat or drop in profits

• Softcare (SOFT HK)  is looking to raise at least US$300m in its upcoming Hong Kong IPO.
• Softcare (SC) is an international hygiene product corporation engaged in the development, manufacturing and sales of baby and feminine hygiene products.
• In this note, we look at the firm’s past performance.

• We are lowering our projections and price target for Vera Bradley after the company reported lower than consensus 4QFY25 (January) projections, announced the sale of Pura Vida and provided initial FY26 guidance, which, even with the exclusion of Pura Vida, demonstrates the return to prominence for Vera Bradley will be a longer than expected undertaking.
• That said, with a cash rich balance sheet, signs of positives in the direct channel and management quickly reacting to customer commentary, we believe the company has the ability (and financial resources) to switch the customer base and register compelling returns.
• As such, we are reiterating our Buy rating, but, in a bow to what will be another rebuilding year in FY26 cutting out price target to $4 (from $5.50).

• On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
• They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly. 
• Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.

• In recent years, Goldlion is facing performance headwinds. Both revenue and net profit have shown a downward trend due to declining consumption, real estate crisis and unfavorable external factors.
• In short term, the weak consumer confidence and market momentum are unlikely to improve. Goldlion’s performance may gradually pick up in 2026 and 2027 but is still in downward trend.
• Considering the low trading liquidity, weak fundamentals, uncertainties on performance brought by Goldlion’s potential strategic transformation and  the concerns on the outlook, we think the Cancellation Price is acceptable.

• Key 4Q24 takeaways include: 1) real-time step ups in trade-in activity and consumer demand for high-quality preowned products on the heels of recently introduced government subsidies and ongoing growth in the supply of new smartphone shipments continue to drive accelerating revenue growth 2) in response to building demand trends, management plans to continue to expand the company’s footprint (800 new store openings planned for this year), branding initiatives via new social media content/channels, and fulfillment capabilities and 3) while we assume adjusted operating income margins hold steady this year, our model calls for material margin expansion looking out to 2026, as revenue growth momentum continues to build and expense inflation moderates.

• Sido Muncul remains a standout consumer proxy in Indonesia through its Tolak Angin herbal brand playing into increased health consciousness and through its energy drinks exposure through Kuku Bima. 
• The company continues to expand its product range in herbal, reducing its reliance on Tolak Angin. F&B is seeing stronger growth, with pharmaceuticals also becoming a more important driver.
• Sido Muncul continues to expand its distribution locally across general trade and modern trade, with the international business outgrowing the local business and becoming more important. Valuation remains attractive.

• We are reiterating our Buy rating, $22.50 price target and projections for Betterware de Mexico after reviewing the March 2025 catalog.
• As has been the hallmark since 4Q24, March saw material increases in overall SKU count (up 5.8%) YoY and pricing (12.5% YoY increase).
• That said, while overall prices increased, this month saw a slowdown in the rate of discounting, with the catalog registering less than 30% of total SKUs on sale; while still up YoY, March 2025 sales rate was the second lowest since August 2024.

• In this edition: • Unilever | Mr Fernandez’ first statements as CEO signal the first signs of change • Fugro | to perform geotechnical site investigation for Blue Mackerel offshore wind farm

• ContextLogic Inc. (NASDAQ: LOGC) has transformed from an e-commerce operator to a cash-rich shell company possessing substantial tax assets, positioning it as a unique investment opportunity.
• The company’s recent strategic partnership with BC Partners has created a significant value proposition for investors, particularly those seeking to navigate current market volatility.
• This investment opportunity combines tangible cash assets with substantial tax benefits, all supported by sophisticated financial backing.

• Key F2Q25 takeaways include: 1) senior executives remain focused on continually realigning/improving the online learning course catalog, and increasingly leveraging QSG’s existing online platform and customer base
• 2) steady cash flows from the legacy online learning services platform continue to fund the strategic transition, with a focus on higher-quality products/services geared toward the silver demographic
• 3) management continues to launch new health/wellness related products and services aimed at the silver demographic, while exploring opportunities across the consumer sector to enhance growth

• While 1H profits struggled under pressure on COS from the weak yen, price hikes for roughly 80% of products were implemented from September, a portion from October, so Q4 will see a full 3-month contribution.
• Note also success in controlling SG&A from Q3. Sapporo-based Ohkura Sangyo will be consolidated from Q1 FY26/3 with the acquisition completed in Jan-2025.
• In this report, we look at three TOPICS. The first is an update on CY2024 booming inbound demand, which is continuing coming into 2025. 

• On Thursday 6 March we got a Nikkei article then a company announcement for Seven & I Holdings (3382 JP)‘s proposed management measures and update on ACT Bid Process.  
• It involved Isaka-san stepping down, Stephen Dacus stepping up, selling York to Bain for ¥814.7bn, IPOing 7-Eleven US, a ¥2trln share buyback over 5yrs, and ACT process update. 
• It was OK. Good, bad, and ugly. But Artisan wrote a letter over the weekend and 7&i responded and suddenly, their concerns are mostly addressed and the outlook is different.

• The Seven & I Holdings (3382 JP) Board has released a public letter to address Artisan Partners’ letter and provide more details on the Alimentation Couche-Tard (ATD CN) constructive engagement. 
• The letter effectively addresses most of Artisan’s concerns. The Board is engaging with Couche-Tard, particularly by agreeing on a strategy to find a solution to secure antitrust approvals. 
• However, the statement suggests that the Board retains deep scepticism that the Couche-Tard is viable and is manoeuvring to shift the blame on a failed bid on a flawed proposal. 

• On Friday post-close, S&P DJI announced the changes to the S&P500, S&P MidCap400, and S&P SmallCap600 Indices. The S&P500 names will get added to/deleted from the S&P500 Equal-Weight Index too.
• There will be 4 changes for the S&P500 and all 4 DELs from S&P500 are demoted to the S&P600 Index. SPDR Select and Equal-Weight Indices add up to big volumes.
• There is a theoretical quantity to trade, and an expected quantity to trade and it is worth knowing the difference. EW, of course, is still “live” for a few days.

• Alibaba Group Holding has made a significant move in the AI space with the release of its latest artificial intelligence model, QwQ-32B, as it seeks to establish itself as China’s leading AI developer, challenging DeepSeek.
• The model, which excels in mathematical reasoning, coding, and problem-solving, demonstrates capabilities comparable to both DeepSeek’s R1 and OpenAI’s latest technology.
• However, a key differentiator is its size, as QwQ-32B operates with only 32 billion parameters compared to DeepSeek R1’s 671 billion.

• VGI PCL (VGI TB) could be added to the SET50 INDEX later this month following the Gulf Energy Development (GULF TB) / Intouch Holdings (INTUCH TB) merger.
• Then there could be 3 or 4 more changes to the index at the June rebalance. The review period has just commenced so price moves will move the list around.
• Passive trackers will need to buy around 1.85% of float in VGI PCL (VGI TB) while buying in the other stocks will be between 1-1.2% of float.

• Breakout Time in Oil and FX During the last week there occurred many breakout patterns as the volatility in financial markets has risen significantly after president Trump introduced tariffs on Mexico and Canada.
• The Ukraine-drama also doesn’t really help to calm market participants at the moment either.
• We just highlight the technical pattern and add a few words about our current framework and how we view these markets at the moment. 

• Cisarua Mountain Dairy booked a strong finish to the year in terms of sales growth despite a high base driven by premium consumer foods, but with dairy showing recovery. 
• The company saw an improvement in gross margins in 4Q2024 driven by the stabilization of raw materials and product mix, but operating margins were impacted by higher promotional spending..
• Cimory will drive future growth by expanding across channels, especially general trade and with the launch of new products in both dairy and consumer food segments. Valuations remain attractive.

• I’m closing out my Kenvue (KVUE) recommendation and will be selling my shares.

• Following the spin-off from Johnson & Johnson (JNJ), KVUE shares performed poorly for a variety of reasons (lockluster growth, Tylenol related litigation, etc.) that I thought were overblown.

• At the time, Kenvue was trading at a sharp discount to its consumer health care peers. Today, Kenvue trades at a slight discount to peers (21 P/E vs. 23.3x for the group).

• We provide result updates for JNBY Design Ltd (3306 HK) and Lever Style (1346 HK). Separately, Crystal International (2232 HK) was added to the HSCI (eligible for trading on Stock Connect).
• We introduce Bosideng International Holdings (3998 HK) on our screen. With a 5-year average ROCE of 17%, net cash, and a 7% dividend yield, the stock is worth a look.
• Our top picks include JNBY Design Ltd (3306 HK) and Pacific Textiles (1382 HK), with a favorable mention of Nameson Holdings (1982 HK)  due to its attractive dividend yield.

• Anjoy Foods Group (603345 CH), a quick-frozen food company in China, aims to raise around US$300m in its H-share listing.
• AFG was the largest quick-frozen food company in China in terms of revenue in 2023, with a market share of 6.2%, according to the Frost & Sullivan report. 
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• There are 4 changes for the S&P 500 INDEX, 6 changes for the S&P Midcap400 Index and 14 changes for the S&P SmallCap600 Index at the March rebalance.
• DoorDash (DASH US) was newly eligible after meeting the profitability criterion, while AppLovin (APP US), Coinbase Global (COIN US) and Interactive Brokers Group, Inc (IBKR US) were overlooked again.
• There will be more same-way flow for the S&P 500 INDEX (SPX INDEX) adds and deletes from the Select Sector index trackers.

• The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 7th March 2025.
• There will be one change for T50 and two other changes for T100. There will be no changes for the TDIV index but there will be capping flows.
• In this insight, we will take a look at our final flow expectations for the March 2025 index rebal event.

• JD.com (9618 HK) Q4 2024 earnings significantly exceeded analyst expectations with revenue reaching RMB 347 billion (13.4% YoY increase).
• The stock experienced a volatile two-day reaction, rising 8.4% on March 6 followed by a 5.0% decline on March 7, resulting in a net gain of 3.03%.
• Options strategies including straddles, strangles, and call calendar spreads were actively traded ahead of earnings with potential intraday profitability. Longer dated implied volatility decreased following the announcement.

• MIXUE’s IPO debut was stellar. the IPO pricing of HK$202.5/share was indeed conservative. MIXUE is able to obtain more valuation premium space after IPO from a relatively low IPO pricing.
• However, concerns on future performance growth remains. Investors need to pay attention to the performance verification. Market sentiment is becoming “overheated”, and the pressure for short-term stock price corrections increases.
• We updated our forecast for 2025-2027. If based on P/E of 20-25x, market value is HK$109.4-136.8 billion, HK$122.5-153.2 billion, HK$134.8-168.5 billion based on 2025, 2026 and 2027 net profit, respectively.  

• While the company’s attitude toward shareholder returns has been positive, the 11% dividend increase is not expected to reduce cash on hand by much.
• In a condition where so much cash has accumulated, it’s not a bad idea to use DOE as a guide to avoid accumulating cash on hand above a certain level.
• Since FY3/2025 profits will grow in non-manufacturers, which has relatively low profit margin, the overall profit margin of companies won’t increase. Therefore, unless assets are reduced significantly, ROE will soft.

• 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, Mixue Group (2097 HK) provided some much needed relief to the HK tea chains, Seoul Guarantee Insurance (031210 KS) might not do the same this week.
• On the placements front, BYD (1211 HK)‘s jumbo offering has been doing well, while Japan Post Bank (7182 JP) hasn’t been correcting much.

• Multi Bintang Indonesia (MLBI IJ)  delivered steady FY24 growth, with revenue and profits up 1.9% and 7.1% YoY, respectively. Q4 FY24, however, underperformed expectations with revenue/profits up 0.6%/1.7% YoY.
• Although Q4 typically represents >30% of overall annual revenue/profits, being the strongest season, its performance was disappointing compared to the strong 21%/35% YoY revenue/profit growth seen in Q3 2024.
• Multi Bintang Indonesia (MLBI IJ) represents tremendous value with a dividend yield of 9% (100% payout), ROEs exceeding 80%, and a cheap multiple of 11x FY24 PE. 

• A2 Milk Co Ltd (ATM NZ) will replace Ryman Healthcare (RYM NZ) in the S&P/NZX 10 Index at the close of trading on 21 March.
• Passive trackers will need to buy 0.8x ADV in A2 Milk Co Ltd (ATM NZ) and will need to sell 1.2x ADV in Ryman Healthcare (RYM NZ). 
• Importantly, A2 Milk Co Ltd (ATM NZ) is a deletion from a global index at the close on 21 March and the selling from those passive trackers is far larger.

• If indeed the company proceeds with 2 trillion yen buyback over five years, this would represent buyback of about 7.3% of its shares per year (37% of market cap). 
• Seven & I Holdings’ plans to massively buyback shares and IPO its North American CVS business are major catalysts that should have positive impact both near and long term. 
• Certainly, the company’s action plan to sell its non-core assets (including supermarket, restaurant, and specialty stores) to Bain Capital for $5.5 billion is a step in the right direction.

• Positive sentiment helps push HSI to new highs aided by rally in Alibaba.
• Implied vol at high levels but so far supported by historic vols that are above implieds.
• We highlight a large trade in out-of-the-money Calls for May expiry.

• JD C4Q24 revenue exceeded our estimate/consensus by 3%/4% and adjusted NI by 16%/19%, driven by subsidies and logistic efficiency gains.
• We expect JD to maintain 11% YoY revenue growth in C1H25 but moderate to 5.9% in 2H. 
• We maintain JD.com’s TP at US$ 52 and the BUY rating. Market concern on lack of details for long term driver is valid but JD.com still has time.

• The 11th national VBP is expected to start in 2025H1. Companies such as Kelun, CSPC, Qilu Pharmaceuticals, Fosun Pharma, China Resources Pharmaceutical, etc. are expected to be affected the most.
• It is estimated that the entire market of PD-1/L1 x VEGF BsAb is approximately US$20-30 billion. AK112 is expected to seize about 40%-50% of the market or US$8-15 billion.
• MIXUE’s IPO debut was stellar. Conservative investors can considering taking profits as risk of share price corrections has increased. Radical investors can choose to bet on valuation exceeding Nongfu Spring.

• HSCEI rebounded 5.90%, reversing last week’s weakness and extending its rally since mid-January.
• Volatility softened in the short term, with implieds trending below key historic vol measures.
• Skew shifted as demand for tail risk increased, with both out-of-the-money Puts and Calls seeing higher implied volatility, reflecting a bid for protection and upside exposure.

• I tally 55 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• Three news new deals discussed this week:Soundwill Holdings (878 HK), Oneconnect Financial Technology (6638 HK), Snt Corp (6319 JP), Aeon Delight (9787 JP), and AEON Mall (8905 JP).
• Key updates/news took place on: Insignia Financial (IFL AU), Seven & I Holdings (3382 JP), Sun Art Retail (6808 HK), and Macromill, Inc (3978 JP).

• Hasbro Inc. recently concluded its fourth-quarter and full-year 2024 earnings presentation, reporting on both achievements and challenges faced by the company.
• Notably, Hasbro’s diversified revenue streams, led by its Wizards of the Coast and Digital Games segment, underscore key factors in the company’s operational dynamics.
• While Hasbro achieved some significant financial milestones, certain segments faced headwinds, leading to mixed outcomes overall.

• Wayfair’s fourth-quarter 2024 results reflect a mixed financial and operational landscape, capturing both opportunities and challenges in the current market environment.
• The company’s net revenue witnessed a slight increase, with the U.S. segment showing positive year-over-year growth at 1.1%.
• This growth was notably driven by improved holiday performance, implying effective seasonal management and merchandising strategies.

• While Alibaba Group Holding (9988 HK) rallied, lower in-the-money calls were closed, realizing gains, while higher out-of-the-money strikes gained popularity.
• The median strike price lagged the sharp increase in stock price. The median strike currently stands at 107.50.
• With 81% of March calls currently in-the-money and higher strikes trading at premium implied volatility, active trading is expected in the 150-170 strike range.

• As Alibaba Group Holding (9988 HK) rallied, put strike distribution remained largely unchanged with median strikes only rising from 80 to 85, pushing protection increasingly deep out-of-the-money.
• With most puts now deep out-of-the-money, active trading is expected in the 120-140 strike range.
• The deep out-of-the-money put strikes trade at a significant premium to at the money implied volatility. The 130 strikes trade below, offering an opportunity for an effective hedge.

• The HSI INDEX has been defying gravity, recently. It is up more than 30% from its most recent low.
• In our previous, Jan. 11th insight we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).
• Our models are currently indicating a very overbought condition. Leveraging the information relayed by Gaudenz Schneider in a recent insight, we think a “HSI PUT” could make sense here.

• Mahindra & Mahindra (MM IN)growth has been an outlier in the intensely competitive Indian passenger car industry.We share insights on how this trend has evolved over the past several months.
• This insight provides detailed analysis of sales performance of key players-Maruti Suzuki India (MSIL IN) ,Mahindra & Mahindra (MM IN),Tata Motors Ltd (TTMT IN) & Hyundai Motor India (HYUNDAI IN) 
• Various initiatives introduced in the recent Union Budget are expected to boost demand for passenger cars in the medium term.

• Chery Automobile Co. Ltd. (CACTZ CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by CICC, Huatai and GF Securities.
• Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
• According to F&S, it was the second largest Chinese domestic brand passenger vehicle company, and the 11th largest globally, in terms of global sales volume of passenger vehicles in 9M24.

• Texas Roadhouse, Inc. reported robust financial and operational metrics for the fiscal year 2024, marking it as another successful year for the company.
• The restaurant chain achieved a revenue milestone, nearing $5.4 billion, driven by positive traffic growth across its brands.
• The average unit volume exceeded $8 million for the first time in the company’s history, thanks to double-digit growth in restaurant margin dollars, income from operations, and earnings per share for a consecutive year.

• Floor & Decor Holdings has presented its fourth quarter and full-year results for fiscal 2024.
• The results include positive developments as well as several challenges facing the company.
• Key highlights of the performance include solid sales growth, market share expansion, and effective cost management strategies amid a contracting flooring industry.

• Japan’s elderly population is projected to continue to grow through 2040, and Pharmarise HDS will benefit from the corresponding increase in the number of prescriptions.
• However, there are expected to be revisions to national health insurance (NHI) drug prices , one measure to restrain medical spending, and revisions to dispensing fees, which are made once every two years.
• Among the industry, the company is keen on preparing to counter downward pressure on prices by focusing on capturing technical fees, including community support system premiums and family pharmacist guidance fees. 

• Rivian Automotive presented a comprehensive overview of its performance and future outlook during their Fourth Quarter and Full Year 2024 report.
• The company showcased a series of achievements and challenges that define their current position and trajectory.
• Rivian achieved a notable milestone in Q4 2024 with a positive gross margin, attributed to significant reductions in cost of goods sold (COGS) and a boost in per unit revenue.

• Many companies that cannot meet listing criteria have challenges with their tradable stock market capitalization in Prime markets, both in Standard markets, and tradable share ratios in Growth markets.
• As a result of the market restructuring, the role of regional securities exchanges became a “receptacle” for ensuring trading of shares of companies that cannot meet the TSE listing criteria.
• For a company that considers the purpose of a stock listing to be to improve the company’s credibility and name recognition, going private or an MBO isn’t on their mind.

• Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
• That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
• Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.

• Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details. 
• “Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”. 
• Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).

• The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
• The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback. 
• The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out. 

• Late December 2024, Alibaba (9988 HK) entered an SPA with DCP Capital to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
• The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share. 
• The Composite Document is now out, with a Closing Date for tendering on the 27th March. This won’t be extended. The IFA (Somerley) says NOT fair & reasonable.

• The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
• In this insight, we take a look at the potential ADDs/DELs for SET 50 in the run up to the index rebal event in June 2025.
• The GULF-INTUCH M&A event could trigger an intra-review change within the next few weeks. Then there could be more regular index changes in June 2025.

• Astra International recently released finely balanced set of FY2024 results, with weaker auto sales offset by stronger 2W and financial segment performance, with other segments also performing above expectations.
• Financial services growth was driven by stronger multifinance growth, whilst the heavy equipment division saw stronger growth from mining contracting and gold offsetting slower growth from coal mining.
• Astra continues investing in sustainable energy, nickel, and healthcare and looks for new opportunities. Valuations remain attractive on less than 6x forward PER and yield > 8%. 

• Nongshim announced that it plans to increase the prices of its instant noodles and snack products starting next week. 
• Nongshim plans to raise the retail prices of 14 instant noodle products by 7.2% on average and three snack products by 7.4% starting Monday (10 March).
• We estimate the consensus to raise their earnings estimates by 5-10%+ in 2025 and 2026, driven by the higher product prices of major instant noodles and snacks. 

• Trial was already one of Japan’s leading discount retailers with a strong network of stores down south in Japan although rather low margins.
• Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.
• Together, the two will now be able to take on Aeon, Seven & I, PPI and other major retailers in building the first true national grocery chains in Japan.

• Booking Holdings, a major player in the global online travel industry, reported its fourth-quarter and full-year 2024 financial results, showcasing a strong performance across several key metrics.
• The company achieved a 13% year-over-year growth in room nights during the fourth quarter, surpassing its expectations and reflecting robust demand across all major regions.
• The growth in room nights contributed to a 17% increase in gross bookings and 14% revenue growth, both exceeding the company’s prior guidance.

• Kitex Garments (KTG IN) is the world’s second-largest manufacturer of ready-to-wear clothing for infants and children.
• KGL is expanding its manufacturing capabilities by establishing two new integrated units in Warangal and Sitarampur, Telangana which will increase capacity to 10.68L pieces per day.
• Kitex Garments is also planning to merge with Kitex Childrenswear Limited, which sell processed fabrics, rental agreements for factory premises, and special job work contracts for KGL.

• Crystal International ‘s business operations started to turn around in 2024 as most brand customers ended the destocking cycle and adjusted their inventory strategy.
• Crystal International is trading at attractive valuations of EV/EBITDA of 3.5x and P/E of 8.1x, based on 2025 consensus earnings estimates. Estimated dividend yield is at 6.5% in 2025. 
• The company is one of the largest OEM apparel manufacturers in the world. It has a proven record of executing its business strategy successfully for more than five decades.

• SJM Holdings’ FY 2024 results were acceptable in our view, as its earnings and market share improved y-o-y.
• In particular, GLP has managed to improve market share gradually over the course of the year.
• Still, SJM’s overall market share remained below the pre-pandemic FY 2019 level.

• A common feature of the three companies that clearly indicated the conditions for implementing share repurchases and their position in the cash allocations is high foreign ownership.
• Japanese companies’ share buybacks are less than 10% of net income, but on a cash flow basis, taking depreciation into account, share buybacks would be much less.
• If the cost of capital was calculated, it shouldn’t be tremendous requirement to indicate cash allocation and share repurchase terms necessary for targeted return on capital and corporate value.

• Three new Hong Kong SDRs, Xiaomi, Meituan, and Ping An Insurance, are now tradable on SGX, expanding thematic exposures.
• HK SDRs offer cost-effective access to Hong Kong stocks with lower brokerage fees, no forex fees, and SGD settlements.
• Since October 2024, HK SDRs’ daily turnover increased eightfold to S$4 million, with significant trading in Tencent, BYD, and Alibaba.

• We are reiterating our Buy rating, $58 price target and projections for Build-A-Bear Workshop, with the company announcing 4QFY24 (January) results on Wednesday before the open.
• We believe, with impressive owned store results during the Holidays and the new third party locations becoming an increasingly higher piece of the overall profitability of the business, Build-A-Berar is poised for strong 4Q results and potential top and bottom line upside.
• Further, with the company enjoying a strong Valentine’s Day season and the Spring calendar materially more favorable, we believe management will be positive for FY25.

• The entire condiments market in China is deeply mired in fierce competition with limited market increment space. The future performance growth of companies in the industry will further slow down.
• Haitian tries to find new growth points through diversification/internationalization. A big concern is whether China’s local brand will face “adaptation issue” overseas. The supply chain system is not yet perfect
• Due to the concerns on slowing performance growth in the future as well as the uncertainties on internationalization, we think reasonable valuation for Haitian is about 20-30x P/E.

• 4Q results and 2025 outlook were already discussed, hence there were no surprises.
• The key takeaways from the call and callbacks include the following.
• Strong pickup in new buyers in 4Q, with momentum continuing into 1Q25.

• Revenue for FY01/25 was JPY237.2bn (+11.2% YoY), with operating profit at JPY4.8bn (+28.3% YoY).
• Domestic Beverage business saw a revenue decline of 4.0% YoY to JPY145.5bn due to lower sales volume.
• International Beverage business revenue increased 112.8% YoY to JPY56.3bn, driven by Turkish operations and Wosana consolidation.

• Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
• Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
• Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.

• The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
• The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).
• Meituan ,  JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.

• Today, the last day of the ¥1,250 “Final Price” CVC Tender Offer for Macromill, Inc (3978 JP), CVC has bumped price to ¥1,275 and extended another two weeks.
• In the process, they got agreement from GMO to tender their 12.1% and GMO gets to reinvest into an 18-19% position in the Bidco. 
• Investors are now competing against “activists” who aren’t in public markets. 20.6% of the register don’t like the ¥1,250-1,275 price either. But they aren’t selling. They’re re-buying there. You’re not.

• As recently written by Brian Freitas and Sumeet Singh , BYD (1211 HK) is placing new shares on the market at at a price range of HK$333-345/share.
• The stock today dropped to roughly 340 and it’s oversold WEEKLY according to our models. Buying here, at this price, should bear fruit in coming weeks. More details below.
• We cannot yet predict the profit targets because our model needs the WEEKLY Close for this week, to do that. We will update this information when it becomes available.

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the March 2025 index rebal event.
• The final rankings will be decided based on the full market cap at the close of trading today (3rd March 2025).
• Based on the current numbers, we see one change for the F100 index and three changes for the F250 index in March 2025.

• Recent surge of share price is driven by the craze for DeepSeek/AI in digital healthcare, not the improvement of fundamentals or effective validation of business model.So, the rally won’t last.
• Although AI is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified. Small revenue scale may lead to low valuation premium.
• PAGD is expected to turn loss into profits in 2024. Short-term valuation should be lower than peers. When PAGD achieve profitability/revenue in large scale, P/B would approach the industry average.

• Sri Trang posts US$48.8 mn profit, reversing loss of US$12.7 mn in 2023  
• Sri Trang sells 133,163 tons of EUDR rubber in 2024  
• North East Rubber setting up plant in Ivory Coast  

• Sapporo Holdings (2501 JP)’s beer, food, and soft drinks businesses are now trading near 19.0x our 2025 OP estimate, suggesting some remaining upside, especially if guidance is revised upward.
• We believe the company’s 2025 guidance is overly conservative, as Sapporo stands to benefit the most from Japan’s liquor tax revisions.
• If growth momentum persists, we estimate 2025 OP could reach ¥22.3bn, surpassing the current ¥17.5bn guidance, though the 300% upside driven by investor activism has mostly run its course.

• Over the last 25 months, there’s been a steady stream of bad news for DTC platform SHEIN
• The latest challenges: US tariff chaos & Amazon’s launch of its competing platform, Haul
• Tariff changes & growth of Haul could mean SHEIN IPO gets done at fraction of 2023 valuation

• With the TSE requiring disclosure of rationale regarding parent-subsidiary listings, etc., it is certain that more companies will move to dissolve parent-subsidiary listings.
• The background for the high TOB premium in Japan was that many companies had stock prices considerably lower than their intrinsic value.
• There are total of 1,217 companies: 230 listed subsidiaries and 987 equity method affiliates. In addition to this, industry restructuring is also required; there are still numerous opportunities for TOB.