Consumer

• BYD (1211 HK) is looking to raise around US$5.2bn via selling 4% additional shares.
• The company has undertaken a few deals before and they have ended up performing well.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Overnight, BYD (1211 HK) has announced a placement of 118m shares at a price range of HK$333-345/share that could raise up to HK$40.7bn (US$5.2bn).
• The Pink Sheets listing for BYD (BYDDY.PK) closed at US$87.1/share and traded US$155m for the day. That close implies an open of HK$338.7/share for BYD, middle of the placement range.
• There will be passive buying from global index trackers later this week while buying from Hang Seng Index and Hang Seng China Enterprises Index trackers will come in April.

• Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty. 
• Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
• This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.

• JD.com (9618 HK) upcoming Q4 and Full Year 2024 results announcement on 6 March historically triggers significant stock volatility, with full-year announcements causing 12-14% price movements.
• Options market pricing implies a 9.4% post-announcement move (up or down), which is less than previous full-year announcement reactions but nearly double the average quarterly announcement impact.
• Long Straddle positions break even at 9.2% price movements, appearing expensive compared to quarterly announcement history but potentially profitable based on full-year announcement patterns.

• On 26 February, PointsBet Holdings (PBH AU) entered a scheme implementation deed with Mixi Inc (2121 JP) at A$1.06, a 27.7% premium to the undisturbed price of A$0.83 (25 February).
• Subsequently, BlueBet Holdings (BBT AU) disclosed a competing non-binding cash-and-scrip offer worth a combined equity value of A$340-360 million or A$1.02-1.09 per PBT share.  
• BlueBet has limited headroom to engage in a bidding war, particularly as its share price weakens. The share price already factors in a potential bump from Mixi. 

• Mixue Group (2097 HK) has a successful IPO in Hong Kong, with share price surged 43.2%. We will trim from here and will not buy at the current level.  
• Our forecasts call for a decent 20.8% and 17.6% earnings growth for FY25 and FY26, putting it on RICH PERs of 19.1x for FY25 and 16.3x for FY26.
• The Chinese tea sector has average PERs of 12.4x and 10.5x, suggesting MIXUE’s leadership is well reflected in the over 50% premium, and the safety margin has significantly narrowed. 

• Chery Automobile is getting ready to complete an IPO in Hong Kong in the coming months. The company could raise up to US$1 billion in this IPO.
• Chery Auto is the second largest automaker in China and the 11th largest auto company globally. The valuation of Chery Auto could be more than 100 billion yuan (US$14 billion).
• Chery Auto has one of the best records among all the major auto companies globally in the past three years in terms of sales and net profit growth.

• Melco Resorts and Entertainment’s Q4/24 results remained soft, owing to a decline in the EBITDA margin, and despite GGR outperforming that of peers.
• In addition, the company’s debt reduction and deleveraging continued to lag peers, as FCF generation was constrained by the soft earnings, ongoing share repurchases, as well as capex requirements (including for the development project in Sri Lanka).

• Genuine Parts Company reported its financial performance for the fourth quarter and full year ending 2024, revealing a mixed set of results amidst challenging market conditions.
• The company’s total sales for 2024 were $23.5 billion, representing a growth of 1.7% compared to the previous year.
• This growth was bolstered by strategic acquisitions which contributed 260 basis points but was offset by weaker market conditions, particularly in the industrial segment.

• Tractor volume continued to be strong in Feb’25.Favorable reservoir level,strong sowing for the Rabi season and government support are expected to drive good demand for tractors in the medium term.
• We summarize the sales volume published by listed players Mahindra & Mahindra (MM IN) and Escorts Kubota Limited (ESCORTS IN) in February 2025.
• Positive management commentary augurs well for uptick in tractor OEM stocks and related auto ancillary companies like GNA Axles Ltd (GNA IN) in medium term.

• Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
• Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
• Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now. 

• Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
• Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.  
• This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover 

• Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
• Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
• Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

• 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: Tonami Holdings (9070 JP), Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Smart Share Global (EM US), Insignia Financial (IFL AU), Tam Jai International (2217 HK). 
• Lowest spreads: Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP).   

• Mixue Group (2097 HK) raised around US$450m in its Hong Kong IPO.
• MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
• We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

• In Japan, where there’s strong peer pressure, people are reluctant to do something before someone else does, and tend to follow the trend once the majority of formality is known.
• When numbers are specified and rules are established, Japanese companies tend to scramble to match the numbers. Thus, many companies have not voluntarily improved their board practices.
• There’re companies that only have good board practices but aren’t generating value .Therefore, we should focus on whether they are doing actions that create value in addition to board practices.

• Vista Energy – Mercado Libre – Telecom Argentina – Suzano – Cemex
• The LatAm Aggregate Index expanded by 14 bps to 331 bps in the week ending Friday, February 28, 2025. 
• U.S. Treasuries saw significant declines. The 10-year yield fell 22 bps to 4.21%, while the 5-year yield declined 25 bps to 4.02%.

• Alibaba Group Holding Ltd. is making a record-breaking bet on artificial intelligence (AI) and cloud computing, announcing on Monday that it will inject more than 380 billion yuan ($53 billion) into cloud and AI infrastructure over the next three years — more than its total capital expenditure over the past decade.
• The Chinese tech giant said in a statement that the investment marks the largest private-sector commitment to cloud and AI hardware in China.
• Since its 2014 initial public offering, Alibaba’s total capital expenditures from 2015 to 2024 have amounted to approximately 376 billion yuan.

• 7&I (3382 JP)‘s MBO is off. Itochu has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
• Yangzijiang Shipbuilding (YZJSGD SP) is sucking wind as United States Trade Representative’s (USTR) office proposed a raft of fees and other shipping restrictions on Chinese vessels
• Pentamaster International (1665 HK)‘s Scheme comfortably gets up after a wild week of trading. 

• TCOM reported C4Q24 revenue 5.4%/3.6% higher than our estimate/consensus, and non-GAAP operating profit 11.2%/6.2% higher than our estimate/consensus, supported by strong domestic travel rebound;
• Even though C1Q25 margin guidance was soft due to commitment to overseas expansions and a couple of one-time events affecting outbound, 
• We keep the stock as BUY rating and keep TP at US$74/ADS.

• Mercedes-Benz China confirmed Thursday that it is implementing business adjustments, including layoffs, to improve operational efficiency in a challenging and changing market.
• The Chinese subsidiary of the German auto giant said restructuring and downsizing were unavoidable, but it pledged to comply with legal regulations and offer affected employees severance packages above market standards along with help finding alternative work.
• While the company did not disclose which departments or what percentage of employees would be affected, sources told Caixin that Beijing Mercedes-Benz Sales Service Co.

• Cantabil Retail India (CANT IN) is one of the few vertically integrated garment players and has a store count of 576 and retail space of 7.4 lakh sq.ft.
• The company has done well over the last five years to improve its financial position; it has grown its topline at a healthy rate while margins have improved significantly.
• But having said that, we have concerns with elevated inventory levels that have remained high historically for a garment player. Moreover, some capital advances and RPT should also be considered.

• We are reiterating our Buy rating and $22.50 price target and raising our 2025 revenue projection, but becoming more conservative on margins and introducing 2026 projections after Betterware de Mexico announced 4Q24 results which demonstrated material top line upside, driven by JAFRA Mexico’s over 20% YoY revenue growth.
• That said, 4Q24 EBITDA and EPS were below Street expectations, as JAFRA Mexico margins slightly weakened YoY and the company was impacted by supply chain issues and FX.
• Further, initial 2025 guidance continued the trends with top line guide above and EBITDA below Street consensus.

• Sales of P$208.3bn were 12.8% higher YoY, better than our estimates and consensus, driven by healthy growth across all segments, FX tailwinds, KOF’s solid results, and inorganic growth (4Q24 was the first full quarter reflecting the Delek acquisition).
• SSS at Proximity Americas reached 3.8%, better vs 3Q24 and our estimates.
• For the third consecutive quarter, nonetheless, traffic declined (2.8%), while ticket grew 6.8% YoY.

• Sales improve in Q3 but personnel and store opening costs weigh on OP – Although Q1-3 FY3/25 sales declined -3.4% YoY to ¥316.16bn, reflecting the difficult annual comps for new games and consoles in H1, in Q3 the absence of this drag meant that this quarter alone rose +4.3% YoY to ¥116.43bn.
• Demand for reuse clothes and smartphones remained robust, buoyed by store openings, year-end sales for clothes and price conscious consumers.
• However, increased hiring, base salary increases and credit card fees continued to eat into OP, which in FY3/25 Q1-3 fell -26.4% YoY to ¥9.82bn.

• Most shareholder benefits items can be used in Japan. There’s history of more companies abolishing shareholder benefits programs because they believed that shareholder returns should conducted rather than shareholder benefits.
• Amid rising foreign ownership and the dissolution of cross-shareholdings, more companies have begun to reverse the trend toward companies approaching individual shareholders with shareholder benefits programs.
• The fact that stock prices of companies offering shareholder benefits tended to fall lower during stock market plunges may be due to the fact that they were mostly defensive stocks.

• The MBO is off. Itochu Corp (8001 JP) has apparently not been able to agree with Ito-san on board composition/representation and management control. That the MBO is off isn’t surprising.
• 7&i says they “continue to engage constructively with ACT and alternate proposals but news articles suggest that almost 6mos after proposing an NDA, ACT still haven’t had access to financials.
• The shares are off hard today to a level below where ACT’s first bid was considered “not even worth discussing”. There will be questions at the AGM and before.

• Li Auto’s (LI) share surged 13% on photos released on its official Weibo of a BEV SUV slated for release in April, two months ahead of our expectation. 
• Based on information released, we dialed up LI’s BEV forecast from 73K to 106K for 2025, contributing 20% of revenue instead of 15%. 
• We raise LI’s TP from US$22 to US$25 but keep at SELL.

• This will be another quick idea flag and different from the typical cheapish-catalyst type situations I have often written about.
• This is a superb business that I’ve been monitoring for awhile that just saw some nasty correction.
• I’ve been tweeting incessantly about this business, and shares finally collapsed yesterday despite a relatively good earnings report.

• Li Auto (2015 HK) has surged recently due to the announcement of its new Li i8 model, accompanied by a significant rise in implied volatility.
• The elevated implied volatility, with one- and two-month levels above the 90th and 80th percentiles respectively, presents an opportunity for bearish and neutral investors to sell call options.
• March and April expirations are preferred due to the earnings release in May. 

• HLF recently reported 4Q24 adjusted diluted EPS of $0.36 versus $0.28 in 4Q23, up 28.6%, and above consensus of $0.19.
• Management does not provide EPS guidance.
• 4Q24 net sales of $1.21 billion were down 0.6% versus $1.22 billion in 4Q23, in line with management’s expectations for net sales in the range of down 3.0% to up 1.0% Y/Y, and slightly above consensus of $1.19 billion. Excluding currency, net sales increased 2.7% Y/Y.

• Revenues of P$11.4bn grew 9.9% YoY and were ahead of our estimates.
• SSS of 5.5% YoY were in line with our estimates and better than peers’ for another quarter.
• Unit and sales area growth of 6% and 7.4% YoY, respectively, further contributed to top line.

• Most shareholder benefits items can be used in Japan. There’s history of more companies abolishing shareholder benefits programs because they believed that shareholder returns should conducted rather than shareholder benefits.
• Amid rising foreign ownership and the dissolution of cross-shareholdings, more companies have begun to reverse the trend toward companies approaching individual shareholders with shareholder benefits programs.
• The fact that stock prices of companies offering shareholder benefits tended to fall lower during stock market plunges may be due to the fact that they were mostly defensive stocks.

• Veru is a clinical-stage biopharmaceutical company focused on cardiometabolic and inflammatory diseases.
• Lead drug enobosarm is a selective androgen receptor modulator (SARM) in Phase 2b for obesity, specifically to preserve muscle while on GP-1s for weight loss.
• Second pipeline drug sabizabulin is a microtubule disruptor being evaluated for inflammation in atherosclerotic cardiovascular (CV) disease

• We are reiterating our Buy rating, $30 price target and projections with the company announcing 4Q24 (December) results after the close on Thursday.
• We believe, after opening multiple Princess Polly stores before the Holiday season, expanding into Nordstrom with Petal & Pup and Princess Polly and rolling out a new inventory system at Culture Kings, a.k.a. Brands is poised for a strong 4Q (inline or slightly above, the January update) and, with many initiatives set to be fully anniversaried in 2025, we look for a solid initial annual guide.
• Further, with the NYC flagship poised to open in two weeks, and more Princess Polly owned store openings on the horizon, we believe a.k.a. Brands is poised for multi-year growth as a true omnichannel retailer.

• We are reiterating our Buy rating, projections and $6 price target for Vince after visiting stores in Connecticut, Long Island and New Jersey.
• We believe, after a very solid Winter season, the company has shifted fully to Spring, with new styles, multiple colors and great assortments for the consumer looking to go on vacation or to stock up early for great Spring looks.
• Further, with continued expansion in men’s, shoes and accessories, Vince is clearly becoming even more of a full lifestyle destination.

• Bloomberg reports that the MBO is stalling due to disagreements within the consortium over who will control Seven & I Holdings (3382 JP) after it is privatised.
• The Nikkei reported that Itochu Corp (8001 JP) was set to withdraw from the MBO consortium. Along with CP ALL PCL (CPALL TB)’s non-participation, the MBO’s financing is in trouble. 
• An Alimentation Couche-Tard (ATD CN) bid remains in play but has issues. While progressing, the Board’s restructuring plan fails to prove a credible alternative. 

• The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
• In this insight, we take a look at the upcoming constituent changes in the run up to the March 2025 index rebal event.
• In this insight, we take a final look at the potential ADDs and DELs leading the rankings for the upcoming review.

• Guzman Y Gomez (GYG AU) raised around US$221m in its Australian IPO. Its IPO linked partial lockup expiry is due soon.
• GYG is a quick service restaurant business with more than 200 restaurants globally. It mainly focuses on fresh, made-to-order, Mexican-inspired food.
• In this note, we will talk about the lockup dynamics and possible placement.

• Rubber latex exports value goes up to US$666.25 million in 2024  
• Average yearly rubber price marks a 47% YoY surge to US$1,971/mt  
• Domestic tire firms consume 58,000 tons of rubber in 2024

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Sands China, MGM China, Biocon Biologics
• In the US, the Conference Board consumer confidence index slipped to 98.3 (102.5 e / 105.3 p) in February, the largest monthly decline since August 2021. The expectations index fell below 80 for the first time since June 2024, with the threshold usually indicating a recession ahead.
• Treasuries climbed for a fifth straight day, with yields declining 8-11 bps across the curve given the weak consumer confidence data and amid a strong auction of 5Y notes.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Flos B&B Italia’s (formerly International Design Group) ESG as “Adequate”. The group has “Adequate” scores for the Environmental and Social pillars, while Governance is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• We are reiterating our Buy rating, $23 price target and projections for Guess?
• after visiting stores in Long Island and the Metro New York City area.
• Given shifts in the calendar (materially later Easter), unseasonably cold weather and an unforeseen store closing, main line Guess?

• Trading at a discount to REAL. ThredUp (TDUP) and The RealReal (REAL) are largely in the same business and have similar business models.
• Based on FactSet consensus, TDUP is currently trading at less than 1x NTM revenue, while REAL is trading at ~2.5x. TDUP has very modest debt and its US business has been adjusted EBITDA profitable for the past five consecutive quarters, which gives it a leg up versus where REAL was a year ago.
• Now, post the European divestiture, when management can devote both time and capital to the US business alone, the focus should be on top-line growth. 

• RaaS has published an update on media group GTN Ltd following its H1 FY25 results in which it reported an 11% increase in adjusted EPS to $0.034.
• NPAT was 10% below our estimates, although normalising for additional Australian inventory spots and non-recurring costs, it was closer to our estimates.
• The H1 dividend was higher than we expected with 100% of NPATA paid out versus prior policy of 50% payout.

• Total revenue grew by 24% in 4Q24, higher than 19% we expected.
• The stock price plunged in Hong Kong as we expect in our preview note.
• However, we believe, any stock decline over 11% means overreacted.

• Net Revenue growth accelerated to +23% Y/Y in Q424, far stronger than in Q224 and Q324
• But costs and expenses grew even faster, leading to surprisingly sharp margin contraction
• We no longer view Trip.com as an attractive play on Chinese travel; airlines may outperform

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, BSE 100, and BSE 200 Indices in the June 2025 index rebal event.
• As things stand, there could be two index changes for the SENSEX index.
• There could be two ADDs/DELs for the BSE 100 Index and four ADDs/DELs for the BSE 200 Index.

• Nathan’s Famous is in potential sale talks, with major food manufacturers and PE firms as potential buyers.
• Smithfield Foods, Nathan’s key partner, is well-positioned for acquisition, potentially eliminating royalties and achieving cost synergies.
• Sum of the parts valuation estimates Nathan’s equity value at $604m or $148/share, a 45% upside potential.

• Sony Group Corporation’s recent earnings highlighted its financial performance for the third quarter of fiscal year 2025 and provided insights into future strategic direction amid a transitional leadership period.
• The company’s revenue and profit saw substantial growth, yet certain challenges remain, reflecting the complexities within its diverse business segments.
• Positive aspects of Sony’s financial performance include a 7% year-on-year increase in consolidated sales, excluding its Financial Services segment, reaching JPY 3,695.7 billion for the quarter.

• China Dongxiang (3818 HK)‘s share price change has not sufficiently reflected Alibaba Group (9988 HK)‘s movement. Their share price ratio is now at a historical low. 
• Its SOTP value increased by HK$927m with the surge in its PE, unlisted and fixed-income investment value, but its market capitalisation has gone up by just HK$258m.
• Holdings in unlisted assets like Ant Financial and JD Technology (JD Digital) will benefit from the AI bonanza and the better sentiment in the HK IPO market.

• Honda Motor Co., Ltd.’s financial performance in the first quarter of FY 2025 presented a complex picture with both strengths and challenges noted.
• On the positive side, Honda achieved its highest ever quarterly operating profit of JPY 484.7 billion, up JPY 90.2 billion year-over-year, translating into a robust operating profit margin of 9%.
• The growth was largely driven by an increase in unit sales in the Motorcycle Business, particularly in India and Brazil, and a strong performance in the Automobile Business, especially with hybrid models in Japan and the U.S. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• 42 companies submitted their annual securities reports by the business day before AGM date, and most of them submitted their reports immediately before AGM, such as the day before AGM.
• If the record date is moved forward from fiscal year-end, the problem of administrative burden will be solved. English-disclosure in annual securities reports will increase, and engagement will be positive.
• For companies with a record date in their articles of incorporation, changing the record date would require general shareholders’ meeting, but only a few shareholders would oppose the change.

• In this edition: • AkzoNobel | to acquire Akzo Nobel India’s powder coatings business • Unilever | CEO Schumacher to leave the company unexpectedly; company reconfirms outlook • PostNL | main takeaways 4Q24 earnings call

• We are reiterating our Buy rating, $58 price target and projections for Build-A-Bear Workshop after visiting stores in Connecticut and Long Island.
• We believe Build-A-Bear was once again a key winner during the Valentine’s Day season, with new items, a continued focus of expanding the offerings (Mini Beans and Giant “furry friends”) and leveraging new and licensed properties.
• Further, Build-A-Bear continues to expand key properties such as Pokémon and Sanrio.

• Last Thursday, in an announcement which was very odd, photo studio Studio Alice (2305 JP) announced that it was voluntarily leaving TSE Prime. 
• They said they would “demote” themselves to TSE Standard as of 27 February in order to save money by not responding to the requirements of Prime.
• That means a voluntary TOPIX deletion at end-March. The stock has an interesting shareholder structure and this event is 115 days of ADV to sell.

• Delta Corp Ltd (DELTA IN) announced a demerger to separate its Hospitality & Real Estate businesses from its GST-challenged Casino business. Additionally, it is divesting its online gaming business.
• The hospitality business plans to add 450 new rooms and the company owns a 100-acre land parcel near Moga Airport, which holds significant growth potential.
• The demerger will leave tax liability with the main company, while the demerged business, accounting for only 6% of revenue, will operate with focused execution and independent decision-making.

• The March 2025 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 21st February 2025.
• There will be two changes for NIFTY 50 and five changes for NIFTY 100 during the March 2025 index rebal event.
• All NIFTY 50 and NIFTY 100 changes will also be reflected in the NIFTY Next 50 index which could see US$366mn one-way capping flows.

• Alibaba reported C4Q24 top line in-line with our estimate and consensus, but non-GAAP NI beat our estimate/consensus by 12%/11%, attributable to cost control and AntFin’s profitability improvement;
• But what drives the stock was the strong performance in AliCloud and an articulation of a clear investment logic on Generative AI (GAI), 
• While the AI inflection point has arrived earlier than we expected, we remain eying for the domestic e-commerce turnaround with Jiang Fan at the helms. 

• Mixue Group (MIX HK) has priced its IPO at HK$202.5/share and will raise up to HK$3.97bn (US$511m) if the oversubscription option is exercised, valuing the company at HK$76.35bn (US$9.8bn).
• Despite a US$10bn market cap, the stock will find it difficult to be added to global and local indices since 60% of the shares are unlisted.
• The stock is likely to remain in the shadows for one global index and could be added to the other in December. HSCI inclusion could take place in September.

• The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
• In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the March 2025 index rebal event.
• We expect no changes for the TDIV index for March 2025 rebal and we estimate the one-way capping flow to be US$448mn.

• Mixue Group plans to complete its IPO, selling 17.1 million shares at the IPO price of HK$202.50 per share. The IPO is expected to start trading on 3 March.
• Our base case valuation of Mixue Group is implied market cap of HKD 96 billion or target price of HKD 254, which is 26% higher than the initial IPO price.
• Our valuation sensitivity analysis suggests a range of HKD 206 to HKD 308 per share for Mixue Group. 

• Trip Com, Contemporary Amperex Technology and Xiaomi all hit fresh highs in EM fund ownership.
• Rotation in all three was among the most positive across all China stocks, with all measures of fund ownership moving higher.
• Conviction opens from GIB, Putnam and Aubrey we among the funds driving ownership higher.

• Mixue Group (2097 HK), a world-leading manufacturer of freshly made drinks, is seeking to raise US$445 million through an HKEx IPO.
• We previously discussed the IPO in MIXUE Group (2097 HK) IPO: The Bull Case and MIXUE Group (2097 HK) IPO: The Bear Case. 
• There are five cornerstone investors. Our valuation analysis suggests Mixue is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

• Prosus’ €4.1bn all-cash offer for Just Eat Takeaway.com represents a 63% premium to the pre-announcement share price and an EV/NTM EBITDA multiple of 9.3x, above the sector median of 7.2x.
• The deal strengthens Prosus’ global food delivery footprint, complementing its stakes in iFood, Delivery Hero, and Meituan, with potential synergies in AI-driven logistics, customer acquisition, and operational efficiency.
• Regulatory approval remains a key hurdle, especially in markets where Just Eat Takeaway.com and Delivery Hero hold significant shares, potentially impacting the likelihood and timeline of deal completion.

• Over the weekend, the Nikkei and Jiji reported the 7&i Board met Saturday and decided Bain would have preferred negotiating rights to buy York Holdings. They bid “over ¥700bn.”
• That’s a trifle lower than the ¥1.2trn Reuters reported (on Christmas Day) Bain bid but details aren’t known. Proper structuring would get the vast majority to 7&i in post-tax cash.
• For 7&i to decide by the AGM (which could be contentious), they need time to debate. Bids are likely needed in 3wks. In the meantime, “Trump Risk” lurks.

• AH Premia continue to fall with the widest spreads narrowing more than the narrowest spreads, and liquid pairs seeing more narrowing than illiquid pairs.
• Average AH Premia are at a new 5yr low (longer, actually, but charts below only show 5yrs). The big warning sign? Rolling 52wk performance of A vs H in pairs.
• Momentum is going to work until it does not. A new Trump EO this weekend seems to have potential to lead to more restrictions on US ownership of Chinese stocks.

• This past week saw SOUTHBOUND Connect clear HK$800bn of gross value traded, and net value was near recent highs at +HK$51bn. Consumer and finance names continue to be the rage.
• Notable is the HUGE back-and-forth. If HK$800bn traded and SOUTHBOUND only bought HK$51bn, HK$375bn was round-tripped for short-term purposes.
• That is twice the “excess” traded seen for the past year. Tencent (700 HK) saw US$14bn traded but net buying was US$121mm. 

• 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: Seven & I Holdings (3382 JP), Smart Share Global (EM US), Tam Jai International (2217 HK), Vesync (2148 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK). 
• Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Domain Holdings Australia (DHG AU), Avjennings Ltd (AVJ AU). 

• York HD is due to take over operation of all group business except Seven Eleven at the end of February and press reports suggest Bain’s bid has been accepted.
• All of which is fine but this leaves Seven Eleven Japan which is struggling against rivals. Even franchise owners are becoming more critical.
• A recent survey by Nikkei also suggested that consumers are increasingly favouring Lawson and Familymart and 30% visited Seven Eleven stores less frequently in 2024. This is a big problem.

• The scorching rally continues with Alibaba saving a lackluster week with huge earnings driven move on Friday.  
• Implied vols are in the 85th percentile and struggling to move higher with spot.
• Third week in a row where Call volume as a percent of total slipped indicating that buying fatigue might be setting in.

• Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN)‘s stock prices have taken a beating this year, but they still make it into the NIFTY Index (NIFTY INDEX) in March.
• Bharat Petroleum (BPCL IN) and Britannia Industries (BRIT IN) will be out of the NIFTY Index (NIFTY INDEX) but will be added to the NSE Nifty Next50 Index (NIFTYJR INDEX). 
• Hyundai Motor India (HYUNDAI IN) will be added to a global index on 28 February and will then be added to the NSE Nifty Next50 Index (NIFTYJR INDEX) in March.

• Mixue Group (MIX HK)‘s IPO price of HK$202.5 looks attractive, as it is priced at 16.6x FY24 and 13.5x FY25 PER, below the mainland China peer average. 
• We estimate a P/B of 4.6x, putting it marginally lower than the sector best-fit line. We think there is potential for at least a 20-30% upside after the IPO. 
• MIXUE offers the possibility to participate in the spin-off of its overseas businesses in the medium term, which is explicitly spelt out as a plan.

• Mixue Group (MIX HK)  is offering 17.1 million shares at a price of HK$202.50 in its Hong Kong IPO aiming to raise up to HK$3.45 Bn.
• The company demonstrated stellar growth in store count, revenue, and profits, focusing on the mass-market freshly made beverage segment despite a sector slow down in 2024.
• Mixue’s pace of store expansion may slow down going forward, however its ultra-low prices (RMB4-10) and scale provide a strong foundation for long-term sustainable performance.

• Airbnb’s latest earnings report sent its stock surging 12.6% as investors reacted to stronger-than expected financial performance and ambitious growth plans.
• Despite missing out on much of the recent travel boom, the company is now positioning itself as the “Amazon of travel” by expanding beyond its traditional short-term rental business.
• CEO Brian Chesky emphasized this strategic pivot, revealing plans to invest up to $250 million in new businesses set to launch in May.

• Alibaba had a super charged move this week, risking 14.56% on its earnings release.
• We look at how price movement and volatility evolve in the month after earnings releases.
• Recommendations are made on how to position through options in this environment of enhanced volatility.

• DoorDash (DASH US) recently became eligible for addition to S&P500 following the company’s positive earnings announcement on 11 February 2025.
• AppLovin (APP US), DoorDash (DASH US), and Coinbase Global (COIN US) are the main addition by transition candidates. APP is number one due to significant long-term mcap score.
• Williams Sonoma (WSM US) is the main addition by migration candidate and the expected addition by replacement if Capital One’s acquisition is completed prior to the March review.

• In 2025, the NHSA will continue to deepen the VBP of drugs and centralized procurement of medical consumables, covering 700 drug varieties in total. 
• Valuation of the entire industry has been sluggish for three years. With the positive changes, we think it is the time to be optimistic on China healthcare in 2025.
• Due to the craze for DeepSeek/AI, PAGD’s stock price surged.Although this is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified.

• Wyndham Hotels & Resorts had a solid fourth quarter and full-year 2024 performance, marked by robust room growth, increased earnings, and strategic initiatives aimed at enhancing long-term positioning.
• However, some areas presented challenges that could affect future performance.
• Positively, the company reported a 4% net room growth for the year, which included opening a record 69,000 rooms.

• Lithia Motors’ recent earnings results highlighted a mixture of strategic advancements and operational challenges.
• The company demonstrated a robust revenue increase driven by its integrated mobility ecosystem and growth initiatives.
• Key financial metrics bring forward a mixed perspective for investors evaluating the company’s performance and strategic outlook.

• MGM Resorts International reported strong earnings results for the fourth quarter and full year of 2024, marked by record consolidated net revenues, domestic slot wins, and heightened guest experiences.
• The company credits its robust performance to strategic decisions, strong financial foundation, and growth in both traditional and digital operations.
• Additionally, MGM’s customer service enhancements have been positively reflected in its Net Promoter Scores, particularly with its Gold Plus customers, reaching record highs during the reported period.

• There are 17 changes a side for the NIFTY Midcap 150 Index at the March rebalance. There are many stocks with flows from passive trackers of other indices.
• Estimated one-way turnover is 9.2% resulting in a round-trip trade of INR 15.9bn (US$184m). With over US$40bn tracking the index actively, the impact on the stocks will be much larger.
• There are many stocks with opposing flows from NSE Nifty Next 50 Index trackers. Ola Electric (OLAELEC IN) will have inflows from multiple index trackers over the next month.

• The Kraft Heinz Company recently released its fourth-quarter 2024 earnings, providing insights into its financial performance and strategic focus.
• The company navigated a challenging year, emphasizing efforts to bolster profit margins and enhance free cash flow, even amidst a tumultuous economic environment.
• One notable achievement was Kraft Heinz’s return of $2.7 billion to shareholders through share buybacks and dividends, highlighting its commitment to shareholder value.

• Restaurant Brands International recently held a financial review for the fiscal year and fourth quarter ending December 31, 2024.
• The company displayed notable achievements and areas for improvement across its diversified portfolio, which includes household names such as Tim Hortons, Burger King, Popeyes, and Firehouse Subs, under its wing.
• The company reported a moderate growth trajectory with a 2.3% increase in comparable sales, a 3.4% growth in the number of net restaurants, and a 5.4% rise in system-wide sales.

• CVS Health investors saw a significant turnaround as the company delivered better-than-expected quarterly earnings, fueling a sharp 14.8% rise in stock price—the largest one-day gain since 2008.
• This surge follows a tumultuous 2024 when the stock fell over 40% due to challenges across its core businesses, including rising medical costs in its insurance segment, regulatory scrutiny on its pharmacy-benefit manager, and financial pressures on its retail pharmacy chain.
• However, with a new CEO at the helm, the company is focused on restoring investor confidence and executing a strategic recovery plan.