Consumer

• 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: Arcadium Lithium (LTM AU), Seven & I Holdings (3382 JP), Get Nice Financial Group Ltd (1469 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK). 
• Lowest spreads: Lifestyle China (2136 HK), Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP).     

• Hopson Development (754 HK) is cash-strapped and it will most likely choose cash dividend, which would increase the likelihood that Glorious Peace’s shareholding ratio will increase to more than 50%.
• If PAGD’s share price is higher than HK$6.12, there is arbitrage opportunity. Since Ping An may hope other shareholders to choose cash dividends, future stock price may fall below HK$6.12
• A risk point is Ping An can actually wait for other shareholders to make their choices before making the final decisions based on the stock price situation at that time.

• DFI Retail Group Holdings (DFI SP), a leading retail player in Asia, is navigating sector headwinds through strategic pivots and cost cuts to drive superior margins and returns.
• After hitting a 10-year low in early August, DFI Retail’s stock rebounded, driven by strong 1H2024 earnings that reflected the impact of management’s initiatives.
• With an attractive dividend yield, strong cash flow, and a positive earnings growth outlook, DFI Retail offers a low-risk, high-return opportunity for investors in 2025.

• D-Market’s controlling stake is being sold to Kaspi, acquiring Class A shares at $7.57 and Class B at $4.75.
• Turkish law mandates a takeover offer for minority shares, but HEPS’s ADR structure exempts it from this requirement.
• Activism efforts aim to increase HEPS’s shareholders to 500, potentially forcing Kaspi to include minority shareholders.

• Vesync (2148 HK)‘s suspension may suggest privatisation by the Yang family (68.8% stake). With US$192m public float and US$216m net cash, out-of-pocket cash needed is limited. 
• 1H24 is decent with a 37.5% earnings growth and 3.3pp margin expansion. The consensus forecast of 4.8% growth in 2H24 is conservative, providing a good opportunity for privatisation.
• Benchmarking the take-out price to the 3-year average P/B will mean a 33% upside while the sector’s average PER multiple implies ~70% higher than the pre-suspension price.

• D-Market Electronic Services & Trading’s (HEPS) controlling stake is being sold to Kaspi, exploiting a regulatory loophole to avoid a mandatory takeover offer.
• Aker Carbon Capture (ACC:OL) sold its business, leaving a cash shell trading at a 20% discount to net cash.
• Ambase (ABCP) is litigating over an Equity Put Right, with summary judgment motions scheduled, potentially impacting share price.

• Sleepy week highlighted by small closing price ranges that were among the 3-5 quietest of the year.
• Volumes across both indexes were down about 1/3 from the prior week.
• Despite low volumes open interest expanded across out-of-the-money options for both Puts and Calls.

• RaaS interviewed Ricegrowers Group CFO Dimitri Courtelis following the company’s H1 FY25 results.
• This is a full transcript of the interview.

• RaaS has published an update on and interview with FMCG agri-group Ricegrowers which trades as SunRice (ASX:SGLLV) following the release of its interim report last week in which it delivered RaaS-adjusted EBITDA of $67.9m (+10%) in line with our forecasts and NPAT of $31.2m (+4%), below our forecasts due to a higher than expected tax rate (28% vs our 22%).Branded sales represent ~70% of total SGLLV sales, with the benefits of new brands, brand extensions and increased ranging evident in the H1 FY25 result.
• Across Rice Food, Riviana and CopRice EBITDA growth far outpaced revenue growth, with EBITDA margins for Rice Food +400bps, +330bps for CopRice and +140bps for Riviana.
• SGLLV added SavourLife and Simply Delish to the portfolio over the half and can be expected to add and extend further brands in pursuit of its 2030 revenue target of $3.0b.

• The new article on Seven & I Holdings (3382 JP) from TV Tokyo is causing a dip on top of last week’s weakness. This is a dip to buy.
• CPMC Holdings (906 HK)‘s Offer is now open for tendering. Ignore the rumours. Zhang Wei will tender. Expect payment before Chinese New Year. 
• Accounting solely for the pre-IPO investors, 164.6m shares (US$1.9bn) in UBTech Robotics (9880 HK) will be unlocked, ~39.2% of the firm’s total shares outstanding, and 91 days of three-month ADV.

• Operating income and depreciation, the components of operating cash flow, have been sluggish. This has undeniably dampened expectations for expanding corporate value.
• Many companies have begun to be aware of cash flow, but have yet to see results. They are at the stage of producing results by selecting business to invest cash.
• In terms of “not being conscious of cash flow,” shareholder returns are still strongly net income oriented and not cash flow oriented.

• A potential merger between Nissan Motor and Honda Motor would create the third largest auto group in the world.
• If this merger is successful, it could have a short term positive impact on Hyundai Motor since it could result in a reduction of overlapping sales/marketing and production of Nissan.
• However, a merger of Honda and Nissan could negatively impact Hyundai Motor over the long term because the merged entity could produce more high quality, price competitive vehicles.

• As the year comes to its end, the trading calendar is impacted by two shortened weeks, with the Christmas holiday and New Year’s Day both falling midweek.
• Holidays market trends can be affected by various non-market factors but it’s always good to check the indexes probability of trend reversals, to avoid surprises.
• In this insight, we’ll take a quick look at the major Asia-Pacific market indices—a ‘Christmas Carousel of Odds‘ for Asian markets, if you will.

• Increasing revenue without increasing profits is “a big denial” of a company’s business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
• Junshi’s 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
• If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.

• AH Premia are all over the place this week. Despite that, pairwise intracorrelation is…. up? Yup. Average Pairwise Volatility is up even more.
• Some of this may be stocks being bullied by large SOUTHBOUND flows in a quieter end-of-year market. 
• Finance is seeing big net SOUTHBOUND buying but that is not showing up in A/H premia. I expect things stay noisy through year-end.

• Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
• Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up. 
• An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.

• The automotive world is abuzz with speculation following reports that Honda Motor Co. and Nissan Motor Co. are exploring a potential merger.
• This development comes amid mounting industry pressures, including surging competition from Chinese electric vehicle (EV) makers and the relentless expansion of Tesla.
• The possibility of a Honda-Nissan tie-up has sparked market reactions, with Nissan’s shares skyrocketing while Honda’s stock faced a decline.

• Porsche SE, a holding company, controls 53.3% of Volkswagen (VW) and 25% (+1 share) of Porsche AG, leveraging a dual-class share structure to consolidate control with minimal economic stakes.
• Net debt of €5.16 billion, accrued from the Porsche AG stake acquisition, relies heavily on VW and Porsche AG dividends for debt servicing, with CF uncertainties tied to VW’s restructuring.
• Porsche SE trades at a 31.8% discount to NAV, reflecting legal liabilities, debt reduction priorities, and holding structure complexities, but this discount could tighten to 20% as risks subside.

• Bloks Group, a fast-growing toy company in China, will disclose the proposed size and the initial price range for the share sale soon.
• In my insight, I discuss IPO valuation, update relative valuation table and set a target valuation for Bloks Group ahead of an IPO.
• Bloks Group enjoys higher relative growth profile and superior gross profit margins. The company has over RMB600M in cash and equivalents and no debt.  

OPAP enjoys a leading and growing position in the Greek and Cypriot gaming markets. The majority of its revenue, from land-based activities, is supported by exclusive prepaid licences. To complement these activities, OPAP has developed a strong presence in the regulated online markets, where, by definition, there is greater competition. Management’s strategy is to grow its customer interactions in both the online and offline worlds, through a combination of rejuvenating its older games and developing new games that appeal to broader demographics, while maintaining its leading corporate and social responsibility credentials.

• Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
• 40% of proceeds is to “create and develop new IP”, 60% is to “enhance global IP distribution”; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. 
• Kadokawa shares have gained 44% in a month since Reuters carried an “Exclusive” article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.

• Shimano, the Japanese maker of bicycle components and fishing equipment, is in need of a strategic gear change
• A significant -25% decline in FY23 net sales highlights Shimano’s struggles. Revenues dropped a further -11% in the first nine months of 2024
• For investors seeking opportunity at the bottom of the cycle, Shimano presents a compelling case. The stock is trading at 2.3x book value

• Early today, the Nikkei had an article saying LY (4689 JP) would launch a takeover of Beenos Inc (3328 JP). The stock went limit up. Shorts are many times ADV. 
• Post-Close, we get a deal much as implied by the Nikkei article. It seems light to me but the top three holders have agreed to the deal.
• Regulatory will take a couple of months. This will likely fall tomorrow. If you are a long-only fund holder, think about the alternatives (read the conclusions here).

• Local hedge funds, mainly prop traders and PEs, drove the price action in LS Electric and Hyundai Rotem, and are now leading net buying in Samyang Foods and Hyundai Mipo.
• Given the setup, it’s likely Samyang Foods and HD Hyundai Mipo will follow a similar move until mid-January when screening starts, so we should stay aware of this backdrop.
• This gives us a chance to capture upside. Plus, since Samyang Foods and Hyundai Mipo may pull back 30-40% post-screening, there’s also a solid opportunity during that dip.

• Bloks Group, founded in 2014, is China’s top assembly character toy company, targetting primiary school students.
• Bloks faces competition from multiple domestic competitors in a slow growing market. The company’s aggressive market expanison in the past 2 years has come at a significant cost .
• The IPO valuation may be high, considering the industry’s low barriers to entry and the company’s unstainable growth.

• Nextage is a prominent player in Japan’s fragmented used car dealer market
• The company is looking to grow through suburban superstores, similar to CarMax in the US
• Despite recent scandal involving competitors, Nextage is positioned for growth with potential for expansion in Japan’s used vehicle market

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

• Our base case valuation of LG Electronics India is implied market cap of 1,256 billion INR or US$14.7 billion.
• Several media accounts have mentioned that LGEI could be targeting a valuation of about US$13 billion to US$15 billion.
• LGEI’s valuation would need to be about US$13 billion or less in order for us to be Bullish on this IPO. 

• Temu, the Chinese cross-border e-commerce platform owned by PDD Holdings Inc. has suffered its first major setback since launching in 2022 after Vietnam banned its operations citing regulatory non-compliance only two months after it entered the market.
• Temu was ordered by the Ministry of Industry and Trade to stop using the Vietnamese language on its website and app, to notify customers that its e-commerce registration was under review, and to halt all marketing activities in the country, according to a report by Vietnam News Agency on Dec.
• The suspension is Temu’s first since expanding into more than 80 countries around the world.

• CP Axtra (CPAXT TB) has seen a heavy impact on its share price following an announcement it would invest THB12-15bn in a mixed-use property project with a related party. 
• Investing in malls is part of CP Axtra’s business although its major focus is on its retail business which includes wholesale under Makro and its Lotus hypermarket and supermarket businesses.  
• The sell-off looks overdone but has been clouded by the sale of shares in parent CP ALL by its vice-chairman ahead of the announcement raising further governance concerns. 

• Inditex’s success in fast fashion industry is attributed to vertical integration and decentralized decision making
• Alistair Whittet from Acus Partners discusses Inditex’s pivots and success in the fast fashion industry
• Inditex’s vertical integration and decentralized decision-making have been crucial to their success

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Heiwa Corp (6412 JP) got 99% of its revenue as a pachinko/pachislot machinery maker. In 2011, it bought one of Japan’s largest golf course operators, PGM Holdings, from Lone Star. 
• Golf course revenue is up 30% in 10yrs. Pachinko/Pachislot revenue is down by 60+% in the same period. Golf is the bulk of revenue and OP now.
• Today, the company announced a stunning, even monumental acquisition to become the largest golf course operator in the world. 

• PT Daya Intiguna Yasa Tbk (Mr DIY Indonesia) (2517930D IJ) raised US$296m from its Indonesia IPO.
• Mr DIY Indonesia (MRDIYI) is a home improvement retailer. The entity is the Indonesian entity under the Mr DIY group’s list of subsidiaries.
• 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.

• GM announced it will no longer continue to fund its loss making Cruise subsidiary, effectively ending its RoboTaxi ambition. Market reaction? Nothing.
• Microsoft has already announced it will write off its $800 million investment made back in 2021 when Cruise was valued at $30 billion
• Root cause? The tsunami that was triggered by Cruise’s botched response to an accident in October 2023. 

• The Shanghai Shenzhen CSI 300 Index (SHSZ300 Index) exploded higher in mid-September 2024, then went flat in a range (still there as we write).
• Our models currently see uptrend and downtrend targets positioned at an equal distance from the last WEEKLY CLose on December 13th.
• In short this means that the index is “perfectly neutral” at the moment, a rare scenario that requires straddle and strangle-like strategies to be able to profit.

• China New Higher Education (2001 HK) has rebounded by 40% from its post-result trough but was still down by 34% from the pre-FY24 result level, despite healthy FY24 results.
• Net profit is healthy, but it is the all-scrip final dividends that dragged on the share price. Concerns are on higher gearing, but at 69.9%, this is still acceptable. 
• The consensus earnings forecast of a 6% growth in FY25 and FY26 seems not excessive. At 2.2x PER and 22% yield for FY25, it seems worthy of the risks.

• Travel Food Services Ltd (1450229D IN)  (TFS) is planning to raise about US$236m in its upcoming India IPO. The lead bookrunners for the deal are Kotak, HSBC, ICICI, B&K.
• The company was established in 2009 and operates in the airport travel quick-service restaurant (Travel QSR) and lounge sectors.
• TFS holds a market share of 24% in the Indian airport travel QSR sector based on revenue for FY24, according to CRISIL Report.

• Bloks Group, a founder-led leader in China’s assembly character toy segment, updated its PHIP and continued to post hyper growth.
• In the nine months ended Sep-24, the company’s revenue totaled ~RMB1629m, representing a y/y growth of ~177%, due to significant increase in product sales volume.
• According to the most recent PHIP, Ultraman IP license in China was extended to 2027 and TRANSFORMERS IP license with Hasbro will expire only in 2028.

• The retail landscape in India is witnessing a rapid transformation with the rise of Quick Commerce
• These companies are challenging traditional retail models by combining competitive pricing with the convenience of super-fast deliveries.
• For Dmart, which has long been the leader in value retailing, this shift presents significant challenges to Same Store Sales Growth (SSSG), store expansion plans, and overall valuation.

• We are reiterating our Buy rating, $23 price target and projections for Guess?
• after visiting stores in the Metro New York City and Long Island.
• As we near the heart of Holiday party and event season, Guess?

• The third quarter 2024 earnings results for Macy’s, Inc. present a mixed picture of the company’s financial health and operational strategy.
• On the positive side, Macy’s showed resilience with sales of $4.7 billion, reflecting a decline of only 2.4% from the previous year, aligned with the company’s expectations.
• Notably, the performance of Macy’s First 50 locations exhibited a 1.9% increase in comparable sales, marking three consecutive quarters of growth.

• Today post-close, activist/engagement investor Oasis Management filed a new LSR on Macromill, Inc (3978 JP) owning 7.12% of shares as of 13-Dec-2024. Reason: Defend shareholder value, propose measures to management.
• That is 7.56-7.65% of effective voting/tender rights. It’s big enough to matter. Of course, the stock has not traded below terms once since full trading started post-announcement. 
• And this was warned in CVC Offers ¥1150 for Macromill (3978) – Wrong Price, Wrong Register – Expect Activism or An Overbid. Shareholder structure REALLY matters. 

• DiDi Global (DIDI US) has begun to generate positive EBITDA after several challenging years post-IPO.  With a high degree of operating leverage, the company is poised to grow quickly.
• Didi which maintains a 70% market share in the ride-hailing industry in China is expanding into Tier 3 cities where there is a large untapped opportunity.
• The company has indicated that it wants to list in Hong Kong in 2025 providing a catalyst for share price re-rating next year.

• After Goldlion Holdings (533 HK), an apparel manufacturer/distributor, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, from the Tsang family (63.09% stakeholder).  
• And that it’s exactly what unfolded.  The Cancellation Price is $1.5232/share (declared final), a 24.85% premium to last price, but a punchy 71% premium to undisturbed. 
• The long stop is the 30th September 2025. This will probably be completed in less than half the time. There will be a question mark over the low price-to-book multiple. 

• At today’s close, Lotte Shopping (023530 KS) shows solid contango for a basis trade, with LS Corp (006260 KS) next; the rest are too tight or dry.
• Lotte Shopping surprised the market today, changing its dividend record date to a board-set day, wiping out the backwardation that matched its dividend yield until yesterday.
• Lotte Shopping’s move could signal other stocks changing dividend dates, causing similar dislocations. With a 7% yield and solid SSF volume, it’s prime for aggressive dividend arbitrage.

• Vishal Mega Mart (VMM) raised around US$950m in its India IPO.
• Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
• 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.

• It is difficult for Fosun Tourism (1992 HK) to return to its peak and IPO share prices over the next two years. The buyback proposal represents a good exit opportunity.
• Net profit is unlikely to go back to FY19 level even in FY26F. The derating of the Chinese equities and Fosun Group, as well as its high gearing, are barriers.
• Its PER multiples have already aligned back to the sector average from the extremely depressed level previously. Relative to global names, it is now only at slight discounts.

• KOSPI 200 is a Korean blue-chip index that tracks the 200 largest and most-liquid names listed in the KOSPI section of the Korea Exchange (KRX).
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the upcoming semiannual review in June 2025.
• We expect up to six ADDs and six DELs in the KOSPI 200 index during the June 2025 index rebal event based on the latest available data.

• The disparity between the leading footwear retailers continues to widen.
• ABC Mart is pulling so far ahead that it has the market almost to itself. 
• Chiyoda may have finally turned the corner but G-Foot may need further financial support from Aeon.

• HKTV is a prominent e-commerce platform in Hong Kong facing challenges from the pandemic and retail market.
• Founder Ricky Wong has shown a history of moonshot diversifications and strong leadership from executives like Jelly Zhou, leading to renewed optimism for the company.
• With a low valuation, potential for growth, and Ricky Wong’s history of successful ventures, HKTV could be a lucrative investment opportunity in the future.

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

• Mission Produce Produce buys, ages, packages, and distributes avocados through facilities in the US, Canada, Mexico, and the UK with around 1,000 suppliers
• Majority of avocado volume sourced from Mexico, California, and Peru, with top 10 customers accounting for 60% of sales
• Company considered low-quality, volatile business with minimal cash flow generation and projected lower earnings in F2025, overpriced based on normalized earnings estimates

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

• KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.
• This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.
• Even after Thursday’s rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.

• In this insight, we provide a list of 70 prominent companies in Asia that could complete their IPOs in Asia next year. 
• This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in Asia in 2025.
• Some of the most prominent potential IPOs in Asia next year include Reliance Jio, LG Electronics India, Shein, Sony Financial Group, Didi Global, and Okada Manila.

• Both HSI and HSCEI show characteristics of being short gamma at higher strikes highlighted by Mondays pop in spot and vol in both markets.
• Implied vol did a complete round-trip closing virtually unchanged from last week despite spot holding on to modest gains on the week and large high – low range.
• Up-Strike Calls look to have been added in both markets which will help maintain the positive spot vol correlation.

• Signet Jewelers’ third quarter fiscal 2025 earnings report presents a nuanced outlook on the company’s current standing and its future trajectory.
• The company has demonstrated a mixed performance, showing improvements in certain areas while encountering challenges in others.
• One of the notable positives from the report is Signet’s continued sales momentum, as indicated by the sixth consecutive quarter of sequential same-store sales improvement, despite an overall decline of 0.7% in same store sales.

• Wayfair has 4k primary customers and multiple brands under their umbrella
• Their business model involves offering a wide selection of furniture and home goods at competitive prices
• Wayfair is positioned to benefit from current market conditions and has potential for growth and profitability in the coming years

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

• In this insight we chart the progress of China’s tourism recovery vs pre-pandemic levels
• In October 2024, Chinese outbound (international) demand finally reached pre-Covid levels
• The recovery in domestic activity was completed earlier and more quickly than outbound

Borussia Dortmund is one of the leading football clubs in Europe, with a strong track record in its domestic league, which has enabled it to feature regularly in Europe’s leading club competitions. Its relatively consistent success and, therefore, high level of media exposure means it is well positioned to benefit from structural growth drivers such as increasing global interest in football, which will support the growth of its multiple revenue streams. Perhaps most importantly, the club’s sporting success has been achieved with low levels of investment versus its peers, which reflects management’s financial prudence.

• Neutral view on recent deal: In the short term, it may pose downside risk of 2.8% and 1.1% to the 2025-26E profit forecasts due to an immediate increase in interest expenses from higher debt.
• However, revenue generation is expected to begin in 2Q26E. Medium-term risks may arise from intensified competition in the same area, but the long-term prospects are positive for CPAXT, as the project could provide stable income if executed as planned.
• Maintain a Neutral recommendation: The valuation metrics reflect a neutral view on the current fundamentals (the stock price sees 2.4% downside risk from its fair value) and the long- term growth prospects (profit growth expected at a 14% CAGR over the next two years). 

• We are reiterating our Buy rating, projections and $5.50 price target for Vera Bradley after visiting main line and outlet stores in Connecticut and Long Island.
• We believe, with an emphasis on key price points, compelling sale items and a focus on winning collaborations (Wicked and Disney), Vera Bradley is well positioned to drive gifting purchases for Xmas shoppers and, continue to attract curious customers attracted to the company’s Project Restoration driven new offerings and looks.
• Given low expectations and solid pricing power, we believe there remains some upside to 4Q and we reiterate our Buy rating and $5.50 price target for BBW.

• Fosun Tourism has emerged from its difficulties and started an upward trend.If it remains listed, it’s only a matter of time before its share price returns to the IPO price.
• Temasek was once in talks to buy a minority stake in Club Med from Fosun International for €500 million, based on which reasonable valuation for Fosun Tourism is RMB12.6 billion.
• Fosun has continued its style- When performance recovery hasn’t been reflected in stock price, it’s the right time to privatize valuable assets at cheap price. A share alternative is expected.

• Management of China Tobacco International (HK) (6055 HK) is bullish on earnings in the next two years, with tobacco leaf import and cigarette export being the key drivers.
• Elevated tobacco leaf price is positive to CTI while more re-opening of duty-free shops (currently only 50% of pre-COVID level) will add to revenue momentum.
• A light gearing of just 2% and potentially more parent asset injection are CTI’s strengths. The company plans to maintain a steady uptrend on absolute DPS annually. 

• 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, a number of offerings were live in India, in a bid to beat the year-end lull.
• On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.

• We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
• We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
• We summarize some updates for our top year-end picks: DigiPlus Interactive (PLUS PM), Ginebra San Miguel (GSMI PM), and The Keepers Holdings (KEEPR PM) 

• Repurchasing investment units, increasing dividends through property sales, and increasing EPS through negative goodwill of M&A seem to be the share price raising measures necessary for capital increase for growth.
• When increasing capital amid stagnated REIT stock prices, it’s questionable whether the picture that is drawn after capital increase is reasonable in the face of rising required returns by investors.
• When the profitability of REIT investment companies is in question, it is not surprising that activist investors will focus on management issues, including cost of capital or corporate governance.

• Alibaba Group’s September Quarter 2024 results reveal a balance of positive developments and ongoing challenges.
• The company has shown resilience in its core business segments, leveraging an AI-driven strategy to enhance user engagement and operational efficiency.
• Steady growth has been noted in both domestic and international e-commerce segments, with Alibaba International Digital Commerce recording a substantial 29% revenue growth.

• Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
• The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
• China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.

• Restaurant Brands International’s (RBI) Q3 2024 earnings show a nuanced performance across its diverse portfolio, which includes brands like Tim Hortons, Burger King, Popeyes, and Firehouse Subs.
• The company navigated a challenging macroeconomic landscape, yet managed to exhibit both stability and strategic growth in certain areas.
• The company reported flat comparable sales growth at 0.3%, alongside a net restaurant growth of 3.8%, culminating in a system-wide sales growth of 3.2%.

• Arcos Dorados Holdings, the world’s largest independent McDonald’s franchisee, reported its third quarter 2024 results showcasing both strengths and challenges.
• The quarter revealed resilience in Arcos Dorados’ business model with strong sales driven by its digital platforms and off-premise channels such as delivery and drive-thru.
• However, the company’s performance also faced hurdles due to economic conditions and currency devaluations.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Kioxia Holdings (285A JP) priced its IPO at JPY1,455, the midpoint of the IPO price range.
• Event-Driven developments: Fosun Tourism (1992 HK), CPMC Holdings (906 HK), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Topcon Corp (7732 JP), Insignia Financial (IFL AU). 

• Lululemon Athletica Inc. reported its third-quarter results for fiscal 2024, revealing both strengths and challenges within its business operations.
• The company’s revenue grew by 9% (8% in constant currency), reaching $2.4 billion.
• This growth was primarily propelled by substantial gains in international markets, particularly China, Mainland, which saw an impressive increase of 39% (36% in constant currency).

• Ulta Beauty’s third quarter of fiscal 2024 results displayed both strengths and challenges reflective of the broader and highly competitive beauty market dynamics.
• The company’s net sales saw a modest increase of 1.7%, reaching $2.5 billion, with comparable sales inching up by 0.6%, demonstrating a slight improvement compared to prior periods.
• The growth in sales was accompanied by a 1.4% rise in diluted earnings per share, reaching $5.14, reflecting disciplined financial management despite ongoing market headwinds.

• Brown-Forman has reported its financial results for the first half of the fiscal year 2025, accompanied by a strategic update on its executive leadership transition.
• The company’s reported net sales showed a decline of 5%, while organic net sales remained consistent when adjusting for divestitures and foreign exchange impacts.
• Despite these mixed results, Brown-Forman maintains its fiscal year guidance for organic net sales and operating income growth.

• Dollar General’s third quarter results for fiscal 2024 present a mixed picture of operational resilience amid challenging external conditions and internal initiatives aimed at enhancing financial and operational metrics.
• The company’s performance during the quarter was impacted by several hurricanes in the Southeast, which the management noted as significant in terms of employee deployment and store operations, though the overall sales impact was minimal.
• 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.

• Foot Locker’s third-quarter financial performance fell short of the company’s expectations, resulting in a more conservative full-year outlook.
• The company reported a modest increase in comparable sales of 2.4% for the quarter, driven primarily by gains in Foot Locker and Kids Foot Locker banners, along with a return to positive territory for Champs Sports and WSS banners.
• However, this progress did not translate as strongly as anticipated into overall sales growth, leading to an adjustment in earnings guidance.

• Exedy Corp (7278 JP) announced an offering of 36% of its shares at end-May. Long-time “owner” Aisin (7259 JP) was getting out. Since then, the company has bought back shares.
• Activist Murakami Group has bought 27% of the company. Between Murakami and the buyback, the public has net sold 5% of the company since end-March. Kinda shocking.
• There is another 35% of Max Real World Float to buy back, and at current pace, they’ll be done by mid-March 2025. Then what? That’s the really big question.

• Vesync (2148 HK), a manufacturer of small home appliance, is currently suspended pursuant to the Takeovers Code. 
• FY23 was Vesync’s best result since its December 2020 listing; and FY24E is on track to go one better.  Yet the share price is 24% adrift of the IPO price.
• The Yang family, led by chairman/CEO, control ~69.26% of Vesync. An Offer price around the IPO price may be enough to take Vesync private.

• A recent meeting with Global Digital Niaga (BELI IJ) looking at its longer-term strategy confirmed its differentiated standing, with a keen focus on an omnichannel strategy across key verticals.
• The restructuring of its 1P business is yielding positive returns and higher margins, whilst its 3P business is being driven by strong performance from tiket.com, with offline stores performing well.
• BELI recently opened a new 100,000 sqm distribution centre, which will further underpin its logistics excellence and improve delivery times even further. Valuations are attractive with profitability ahead in FY2025.

• JD.com is a profitable Chinese e-commerce company trading below its cash value
• Despite challenges in China’s retail market and competition from rivals, JD.com offers a potential 2x-3x upside over the next two years
• Stock has fallen approximately 20% since last write-up, presenting a good opportunity for investors

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

• 79% of ELTs consumed by end-use markets, up 10.5%
• Tire-derived fuel tops ELT use, followed by ground rubber
• Sumitomo Rubber USA announces closing of Buffalo plant

• From FY3/2027, companies with market capitalization of over 3 trillion yen will be required to disclose GHG sequentially. 76% of companies with market capitalization of over 500 billion yen disclose.
• A guarantee program is scheduled to be introduced in FY3/2028, but only 21% of companies with market capitalization of over 500 billion yen have disclosed their guarantees.
• The guarantee program will begin in Scope 1 and 2 with limited guarantees. Disclosure of guarantees will increase once the discussion on qualification system for guarantee service providers is finalized.

• Culp posted another tough quarter (1), as industry conditions remain challenged.
• The firm posted an adjusted EPS loss of $0.28, $0.10 below our estimate and $0.09 below the prior year on weaker-than-expected earnings.
• As we said in our update after the release, this shortfall may have been unexpected, but it’s certainly not surprising to anyone who has been following the space. 

• Media Concierge’s £0.23/share offer for National World represents a 9.5% upside, with shareholder approval likely guaranteed.
• Antitrust risk is negligible due to Media Concierge’s focus on Irish newspapers and NWOR’s exclusive UK operations.
• NWOR’s valuation is challenging due to lack of local peers and varying global newspaper company valuation ranges.

• The GIG economy has been viewed as a disruptor to the direct selling channel with respect to the business opportunity.
• However, GIG concepts are top-down, have a specific formula, and assign tasks to their independent contractors for a fee, while direct sellers are micro-entrepreneurs who find a way to build their own businesses.
• Herbalife has been successful in taking some of the best business models developed by distributors at a local level, and then globalizing them, such as. the Nutrition Clubs that arose in Mexico in the early 2000s.