Consumer

• 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.

• Vesync (2148 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
• The Yang family is likely seeking to privatise Vesync through a Cayman scheme. The shares are trading 24% below the HK$5.52 IPO price.
• We use several methods to triangulate the likely offer price, which suggests a price range of HK$5.09-10.30 per share, with an average of HK$6.71, a 59.8% premium to last close.

• Chevron Corporation’s third-quarter 2024 financial results demonstrated a mixture of positive operational achievements and financial headwinds.
• The company reported earnings of $4.5 billion or $2.48 per share, with adjusted earnings similarly at $4.5 billion or $2.51 per share.
• Despite these substantial earnings, this marked a decrease from the prior year largely due to lower liquids realizations and increased depreciation, depletion, and amortization (DD&A), particularly at the Tengizchevroil (TCO) project in Kazakhstan.

• Yum!
• Brands’ recent earnings provide a snapshot of both strengths and challenges faced by the company in the third quarter of its 2024 fiscal year.
• The company demonstrated resilience through its geographic and brand diversification, although certain macroeconomic and geopolitical headwinds impacted its performance globally.

• Macy’s Inc. has been in the spotlight recently as Barington Capital disclosed a stake in the iconic department store chain, pushing for a series of strategic changes aimed at enhancing shareholder value.
• This follows a history of activist investor interest in Macy’s, reflecting its ongoing struggles in a challenging retail environment.
• While Macy’s management has reaffirmed its commitment to its “A Bold New Chapter” turnaround plan, Barington’s proposals focus on optimizing real estate assets, cutting capital expenditures, and exploring strategic alternatives for its premium brands, Bloomingdale’s and Bluemercury.

• Tripadvisor’s third-quarter 2024 results present a mixed picture of the company’s performance and strategic direction.
• On a consolidated basis, revenue was $532 million, essentially flat compared to the previous year.
• This stagnation in revenue reflects headwinds in Tripadvisor’s legacy hotel meta offering, which declined 17% year-over-year in branded hotels revenue.

• The confectionery industry was abuzz recently as news broke that Mondelez International (MDLZ) had approached Hershey (HSY) about a potential acquisition.
• Hershey’s stock surged by 14%, reflecting investors’ optimism about the possibility of a $50 billion industry giant emerging.
• While neither company confirmed the rumors, the timing is intriguing.

• The financial data for 2024 has already shown investors weak growth signal.After IPO, Xiaocaiyuan may face stricter scrutiny from investors and the market in terms of its sustainable performance growth.
• It’s not easy for Xiaocaiyuan to find new growth points. Catering companies commonly face problems such as performance fluctuations and uncertain profitability, which has left their share price underperforming.
• Post investment valuation has already reached RMB10 billion, which far exceeds the market value of A-share peers. Due to concerns on the outlook, valuation performance after IPO could be lower-than-expected.

• India’s ethanol policy is driving increasing corn demand both locally and for imports
• India’s corn production is estimated to be around 38 million for the next year
• India primarily imports non-GMO corn from Myanmar and Ukraine for their ethanol industry, facing challenges in meeting the demand due to feedstock tightness and high import duties

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• Walgreens Boots Alliance (WBA), a well-known retail pharmacy giant, has been making headlines due to potential buyout discussions with Sycamore Partners, a private equity firm.
• Walgreens’ shares surged after reports surfaced about these ongoing talks.
• This comes amid a challenging business environment marked by margin pressures from pharmacy benefit managers (PBMs), store closures, and rising operating costs.

• Ingredion Incorporated’s third-quarter financial performance in 2024 highlights several key developments, showcasing both strengths and challenges that the company faces.
• The company achieved a milestone with a 29% increase in adjusted operating income, marking this quarter as the best third-quarter performance in its history.
• This growth was largely attributed to double-digit operating income growth across all three segments, driven by operational excellence and strategic contract management, despite ongoing inflationary pressures.

• Recent reports suggest an MBO if firming up, with partial sale of US to ACT and even the Japan CVS business so a big value solution for all concerned.
• Not so fast: an ACT purchase of 7-11 US looks more likely to be blocked given yesterday’s ruling on the merger of grocery giants Kroger and Albertsons.
• The valuation of the Japan business may need a correction too if the last six months of poor numbers continue – given this is because of price perception, they may.

• There are 19 changes a side for the Nifty200 Momentum30 Index that will be implemented at the close on 30 December. All names are exactly in line with our forecast.
• Estimated one-way turnover is 64.9% resulting in a one-way trade of INR 72.7bn (US$857m). There are 18 stocks with over 1x ADV to trade.
• The adds have continued to outperform the deletes even after the end of the review period. There could be further upside heading into year-end and implementation of the changes.

• LG Electronics India (123D IN) is looking to list on the exchanges by selling 101.8m shares at a valuation of around US$12-13bn and raising around US$1.8bn in its IPO.
• The draft RHP was filed on 6 December, so the IPO could complete in the first quarter of 2025.
• The stock will not get Fast Entry to global indices. Inclusion at regular rebalances could commence in June/September next year depending on when the stock lists.

• Inditex’s rare quarterly miss on sales and profit, driven by currency fluctuations, may heighten sensitivity around Fast Retailing’s upcoming Q1 results
• For Fast, the risk would be a top-line miss given high valuation multiples and elevated expectations
• Over the past several quarters, Fast’s superior top line growth has supported higher valuation multiples. We expect 9% revenue growth in Q1

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We provide updates on results for our HK-listed universe and highlights from our recent management visits to Hong Kong. 

• REPT BATTERO Energy raised around US$270m in its Hong Kong IPO in Dec 2023. Its pre-IPO investors holding around US$1.2bn worth of shares will be released from their lockup soon.
• REPT is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
• In this note, we will talk about the lockup dynamics and possible placement.

• Vishal Mega Mart (1620871D IN) IPO worth INR 80 bn is about to open this week. The IPO constitutes entirely of OFS. 
• The company is one of the top 3 offline first retailers, the most diversified retailers and caters to middle income and lower income group, largely in Tier 2 locations. 
• As far as forensics are concerned, one must pay attention to exorbitantly high attrition levels, rising related party transactions, few puzzling line items noticed in books, etc.

• Pou Sheng, the second-largest sporting goods retailer in China, is facing challenges like declining sales
• The company is trading at an undervalued price with a negative EV but remains profitable
• Despite concerns about China’s geopolitical situation and low cash returns, Pou Sheng offers a high dividend yield and has a strong balance sheet with significant net tangible asset value, indicating potential for upside if sales performance improves.

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.

• One year has passed since the disclosure of sustainability information in annual securities reports, and the FSA is considering restructuring its disclosure guidelines to support sustainability disclosure by listed companies.
• Sustainability information in annual securities reports is shifting from “what should be stated” to “what content should be stated,” and the volume of information is increasing accordingly.
• Valuable information is that investors can understand what initiatives the company has implemented to address the challenges, the goals and timelines it has set, and whether its progress is justified.

• RaaS is initiating coverage of media group GTN (ASX:GTN) with a base peer EV/EBITDA-derived valuation of $0.81/share, representing potential capital upside of 40% from the current share price, although we suggest premiums of 10% and 20% to the peer average are justified based on GTN’s superior metrics.
• • GTN has seen improved adjusted EBITDA across FY23 (+13.5%) and FY24 (+15%) but the utilisation rate of advertising spots is still below pre-pandemic levels.
• We believe further improvements in utilisation together with some stock-specific cost reductions will drive EBITDA 31% higher in FY25, placing the group on very attractive multiples relative to peers.

• Fosun Tourism (1992 HK) disclosed a share buyback of the company through a scheme of arrangement at HK$7.80, a 95.0% premium to the last close price of HK$4.00. 
• The key condition is the scheme be approved by at least 75% of disinterested shareholders (rejection by <10% of disinterested shareholders).
• The timing is arguably opportunistic, as the shares are down 31% YTD. Nevertheless, the high takeover premium and a potential scrip option lower the vote risk.    

• When Fosun Tourism (1992 HK), a leisure-focused integrated tourism group, was suspended pursuant to the Takeovers Code, the obvious Offeror, by way of a Scheme, was Fosun International (656 HK)
• Not quite. We do have a Scheme, but it’s being enacted by way of a buyback. Fosun Int’l still abstains from voting, but will control 100% if the Scheme completes.
• The Cancellation Price is $7.80/share (not declared final), a punchy 95% premium to undisturbed. I previously speculated a 100% premium was not out of the question.  Clean deal.

• Vishal Mega Mart (1620871D IN) is looking to list on the exchanges by selling INR 80bn (US$943m) of stock at a valuation of INR 352bn (US$4.15bn).
• Anchor allocations were completed on 10 December, the IPO opens today, and the stock is expected to start trading on 18 December. Grey market premium is around 25%.
• The stock will not get Fast Entry to global indices. Inclusion at regular rebalances should take place in May and June 2025.

• For the first time in 2024, Prosus NV (PRX NA) lodges a substantial shareholder notice,  as its stake in Tencent (700 HK) dips below 24%. 
• Preceding my comments on Prosus, Tencent and Naspers (NPN SJ), are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Geely’s sales volume grew by 27% YoY in November 2024.
• BEV delivery growth rate accelerated to 173% YoY in November from 26% YoY in July.
• Geely’s forward financial ratios are lower than its major competitors.

• Popular Vehicles and Services (PVSL IN) are available at a 50% discount since IPO and available at 25%
• PVSL plans to enter two new states by June 2025 and open multiple new facilities, including a NEXA Studio and service centers in Maharashtra and Kerala.
• PVSL’s focus on geographic expansion, high-margin segments, and inventory normalization enhances its growth potential, making it a compelling value play with room for significant re-rating in the near future.

• SEAT is a leading online secondary ticket marketplace for live events with a strong market share and over 290K unique events sold in 2023
• The company’s asset light model allows for high cash flow generation with forecasted growth in Marketplace, Revenue, and Adjusted EBITDA
• Industry fundamentals are promising with strong consumer demand for live events, last-minute ticket purchases, and increasing average order sizes, along with a growing interest in experiential events post-Covid.

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.

• We are reiterating our Buy rating, estimates and $58 price target after visiting the Build-A-Bear X Hello Kitty and Friends Workshop pop up store in the Westfield Century City shopping center in Los Angeles.
• We believe the collaboration, which opened November 15th, highlights the ability of both brands to offer a compelling and unique retail experience that, with exclusive offerings and a beautiful and exciting store for every Sanrio fan, can help drive material returns and register strong operating margins at the store level for Build-A-Bear.
• We believe this collaboration also amply demonstrates the ability of Build-A-Bear to leverage their unique experiential store offerings and strong family of licensed products to create compelling, high margin retail stores.

• Savencia Fromage & Dairy generated €6.8 billion in net sales in 2023, ranking it among the top five dairy companies worldwide
• The company remains relatively unknown to institutional investors despite its strong financial performance and defensive nature
• With an attractive valuation, including a low EV/EBITDA ratio and high free cash flow yield, the stock is trading at a 15-year low, making it a potential 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.

• Viomi has undergone a radical transformation to shed unprofitable business lines and focus on the home water systems market which is poised to experience steady growth in China in coming years.
• The company is hoping to expand into fairly mature international markets including the US with new home water systems that offer advantages over current offerings.
• The company’s investment in a largely automated manufacturing facility should help the company achieve above average margins in the Chinese market as utilization rates improve.

• BYD’s deliveries grew by 68% YoY in November 2024, which provides a positive signal for the whole NEV (New Energy Vehicle) industry.
• In November, Seres’ sales volume increased by 27% YoY with NEV up by 55% YoY.
• Arawana, the top cooking oil producer, finished acquiring 11% of Lihua’s stock.

• The Sanrio (8136 JP) placement is likely to be priced today. With the stock 8.8% lower from undisturbed, expect a small discount to today’s close.
• The stock has traded as expected over the last 9 trading days – a sharp drop followed by a strong upward move and then profit taking.
• We expect there will be strong interest in the placement and oversubscription could lead to upside from here. Shorts have increased and will look to cover into the placement.

• Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
• 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 in our previous notes. In this note, we will talk about the IPO valuations.

• Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO.
• Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.

• LG Electronics India is getting ready to complete an IPO in India in the next several months. The IPO offering size is expected to be about US$1.8 billion.
• LG Electronics (066570 KS) plans to sell 101.8 million shares, accounting for about 15% of the post-offer paid up equity capital shares of LG Electronics India.
• If LGEI is valued at US$13 billion, then an 85% of this stake would be worth US$11.1 billion, which would be worth more than LG Electronics’s own market cap. 

• Trent Ltd (TRENT IN) is best positioned to capitalize on the growing market for lab-grown diamonds (LGD) and alter its business growth trajectory.
• LGD disruptions seen in other markets are unlikely to be seen in India due to the positioning of Jewellery in Household asset allocation. 
• We also believe that Trent Ltd (TRENT IN)  LGD potential is underrated while the impact on Titan Co Ltd (TTAN IN)  is overrated.

• Sarimelati Kencana PT (PZZA IJ) has been hard hit over the last year by the impact of the boycott due to a perception of its Israel exposure. 
• The company has focused on reducing its cost base over the past year and continued to build its higher-end Ristorante format, with the boycott impact lessening since June 2024.
• PZZA management maintains that it can hit profitability in 4Q2024, with this momentum continuing into 2025, with a target to increase its new formats helping to drive recovery. 

• LG Electronics (066570 KS) is looking to raise US$1.5bn+ via part-selling its stake in LG Electronics India IPO. The deal will be run by MS, JPM, Axis, BofA and Citi.
• LG Electronics India (LGEI) was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume in 1Q25, as per Redseer Report.
• LGEI has been the number one player in this industry for 13 consecutive years (CY11-CY23) as per the value market share in the offline channel in India, as per Redseer.

• We are reiterating our Buy rating, $40 price target and projections for JAKKS Pacific after meeting with company management.
• We believe, with easy 1H2025 comparisons, the initial strength of the Moana 2 premiere, a continued focus on key emerging growth drivers (international, ABG collaboration) and basic blocking and tackling, JAKKS is well positioned to continue to drive upside.
• Further, with the company debt free and registering material free cash flow, there remains opportunities to return capital to investors.

• We met with the management of Dream International (1126 HK) on our trip to Hong Kong and summarize our major takeaways. 
• The Plush Toy segment continues to experience growth driven by Disney revenues, but the Plastic Toys segment continues to be plagued by destocking. 
• Despite a 15% YoY earnings decline on our numbers, the stock trades at 5x FY24 PE with an 11.0% dividend yield and 40% of the market cap in net cash. 

• Since the announcement of the US$840 million secondary offering, Sanrio (8136 JP)’s shares have been down 3.9% from the undisturbed price of JPY5,160 per share (26 November).
• It is instructive to look at recent large Japanese placements to understand the potential trading pattern. So far, Sanrio’s shares have followed the pattern of previous large placements.
• The offering will likely be priced on 10 December. The average large Japanese placement tends to generate positive returns.

• 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.

• Lancaster Colony Corporation reported its fiscal year 2025 first-quarter results, showing modest growth with some challenges.
• Consolidated net sales increased by 1.1% to a record $467 million, while gross profit rose by 1.9% to $111 million.
• A key highlight was the record gross profit, marking positive operational efficiency, although the operating income decreased slightly due to higher selling, general, and administrative (SG&A) expenses.

• With the TSE shortly declaring the conclusion of discussions regarding parent-subsidiary listings, more parent-subsidiary listings (including listed affiliates) are likely to continue to appear going forward.
• “TSE’s Request” states a restructuring of business portfolio, but leaves out the issue of restructuring the parent company’s business portfolio and shifting to a management approach that increases corporate value.
• The parent-subsidiary listings (including listed affiliates) that continue to be created will continue to provide investment opportunities for investors, including activist investors.

• After Lifestyle China (2136 HK) was suspended pursuant to then Takeovers Code, the takeaway was that Thomas Lau with 74.91% of shares out would table a Scheme.
• Which is exactly what unfolded. What was not expected was a stingy 21.7% premium to last close. 
• The Offer Price has not been declared final. Lifestyle China is trading at 0.11x P/B. This Offer deserves a bump. Otherwise minorities should vote this down.

• Lifestyle China (2136 HK) disclosed a Cayman scheme privatisation offer from Mr Thomas Lau at HK$0.913 per share, a 21.7% premium to the last close price of HK$0.75. 
• The offer is unattractive compared to precedent transactions, peer multiples, and historical trading ranges. It has not been declared final. 
• While no shareholder holds a blocking stake, the high AGM minority participation rates and emerging retail opposition suggest a high chance of a deal break. Therefore, a bump is probable.

• While the overall market continues to hit All-time High almost every other day, Lulu has been battling the skeptics for much of this year.
• There is still a long way to go, but with the stock now up almost 50% over the last three months, Mr. Market has likely started acknowledging that the bear narratives perhaps went a bit too far.
• Glancing through the numbers for 3Q’24 may seem eerily similar to 2Q’24, but management’s tone was much more upbeat in tonight.

• Today, Rakuten (4755 JP) announced a new shareholder benefit (株主優待) program today, to reward shareholders as of end-December 2024. The stated goal? To “thank shareholders”… 
• …And provide more people with the opportunity to try out the benefits of Rakuten Mobile, with 1yr free of a 30GB/mo mobile plan. There are conditions, but it’s juicy.
• Last year’s 3mo plan was given with one day of notice. This year’s larger full-year govt gets 3+wks. They are juicing the sub numbers for 2025.

• Reportedly, Ito Junro’s MBO for Seven & I (3382 JP) includes a US assets IPO to help pay down MBO debt to Japanese banks.  Possible strategic mistake by Ito-san here.
• Starwood/Warburg Pincus’ firm Offer for ESR Group (1821 HK) secures support from 30.79% of the register.
• We may be wrong on Sanrio (8136 JP) by a big factor but the multiple and the concentration risk of momentum factor means you are in an illiquid stock.

• Five Below recently announced its third quarter results for fiscal year 2024, reflecting a blend of positive strides and ongoing challenges.
• The company reported a 15% increase in sales, reaching $844 million, slightly surpassing its guidance with a comparable sales growth of 0.6%.
• Adjusted earnings per share stood at $0.42, an improvement over the previous year.

• Hormel Foods Corporation recently held its fourth quarter earnings call, delivering a mix of positive developments and some areas of concern.
• The company’s financial performance in fiscal 2024 reflected its strategic shift and operational initiatives, which helped manage a challenging macroeconomic environment and exhibited the resilience of its portfolio and team.
• From a positive perspective, Hormel Foods reported a year of solid execution of its strategic initiatives, which included introducing innovative products across its portfolio, expanding its market presence, and reinvesting in its well-established brands like Hormel Black Label, Jennie-O, SPAM, and Applegate.

• Investors reviewing PVH Corp’s recent performance might note several key aspects from the second quarter of 2024.
• On the positive side, PVH has managed to align its revenue with guidance while exceeding profitability and earnings per share expectations.
• A notable achievement was expanding EBIT margins, partly due to improving gross margins by 250 basis points and enhancing inventory productivity, with a 12% year-over-year reduction in inventory.

• With consumption of decaffeinated coffee rising at a faster pace than that of the overall coffee beverage category, we expect substantial growth opportunities for Swiss Water.
• In our view, SWP’s natural decaffeination process is a key factor that helps drive demand for its coffee, particularly given the positive tailwind from coffee consumption trends.
• We note, however, that rising coffee futures prices potentially signal that coffee prices will rise.

• Bausch + Lomb’s third-quarter 2024 financial results reflect a period of significant growth and strategic execution across its key business segments.
• The company reported a total revenue of $1.196 billion, marking a 19% constant currency growth, with a 10% organic increase.
• This performance is attributed to the company’s focus on operational excellence, sales, and innovation, supported by the rollout of new products and enhancement of existing ones.

• Vizio is at risk of a potential merger termination with Walmart due to anti-trust concerns
• Stock trades at a small discount to the deal price, indicating concerns about deal approval
• Potential upside for shorting Vizio stock is 30%, with downside limited to 2% equivalent to deal price.

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.

• BYD’ deliveries continued to grow strongly by 68% in November.
• BYD required its suppliers to reduce prices by 10% for 2025.
• We believe BYD will continue the price war in 2025.

• Home improvements player PT Daya Intiguna Yasa (Mr DIY Indonesia) completed the book building for its IPO this week for its Jakarta listing where it seeks to raise US$296m. 
• Mr DIY  has seen a rapid rollout of outlets with over 900 stores across Indonesia and SSSG over the last two years of 30%-40% and the company is already profitable. 
• Mr DIY  has a 25% market share of the home improvements segment focusing on the mass market with affordable products. Prefer Aspirasi Hidup Indonesia as a proxy for this space.

• This has been a difficult year for the global IPO market including in Korea. In this insight, we review our IPO research in 2024.
• Using the criteria that the Aequitas Research uses (see below), the accuracy rate of our calls on the IPOs this year was 86%. 
• There some sizeable IPOs that are expected to be completed in Korea in 2025 including LG CNS, Sono International, K Bank, and Bithumb.

• On Wednesday, after the close, the JSE released index changes scheduled for the December rebalance (Friday, 20 Dec).
• OUT will enter the Top 40, with NPH falling out. AMS will enter the RESI 10 and EXX will fall out.
• Naspers and Prosus released 1H results on Monday. The discounts have narrowed through the last 3 trading days, Naspers and Prosus are up 6% and 3.1%, respectively.

• Tesla has shortened its supplier payment cycle to about 90 days in 2024, continuing to outpace rivals in financial efficiency and supplier relations.
• Tesla’s Shanghai factory, where 95% of parts are sourced locally, reflects the company’s deep integration with China’s supply chain.
• The move highlights Tesla’s unique approach to balancing cost-cutting and supplier support in an industry under strain from intense competition, price wars and shifting dynamics between automakers and parts providers.

• We are initiating coverage of Herbalife Ltd. The company has differentiated itself in its ability to successfully change with the times and capitalize on the shifting market dynamics in a period when many have not.
• Herbalife’s independent distributors’ daily methods of operations (DMOs) have evolved, including the creation of a footprint of Nutrition Clubs that offer daily consumption options to customers, which gives the company’s products a sizable worldwide brick-and-mortar infrastructure in towns and neighborhoods where consumers live and work.

• Following the 2016 US Federal Trade Commission (FTC) consent order, Herbalife changed its compensation plan in the US so that distributor commissions were predominantly based on the demonstration of a sale to an end consumer, thereby eliminating the pyramiding risks associated with almost all multi-level marketing (MLM) business models.

• We are reiterating our Buy rating, raising our price target to $58 (from $41) and increasing our FY25 projections after Build-a-Bear reported a highly impressive 3Q, remained conservative in their guidance, continued to aggressively return capital to shareholders and raised expectations for franchised and commercial store unit expansion.
• We believe Build-A-Bear management continues to leverage their experiential offerings to drive global growth and position the company to capture even more upside via new products and categories.
• Given our further confidence in the potential for margin and revenue expansion, we believe BBW is more than worthy of a premium multiple, and are raising our price target to $58 (from $41), or 8.6X our new FY25 EBITDA projection.

• LifeVantage’s new MindBody GLP-1 System for weight loss is built upon the science that the company is predicated on, nutrigenomics and activating the body’s natural processes.
• The products, which have been in development for well over a year, activate the L-cells in the body that are responsible for the production of the GLP-1 hormone.
• In July, LifeVantage received results from in vitro testing it had done that were encouraging. 

• On 4 December, Bloomberg reported that the Seven & I Holdings (3382 JP) MBO is set to include plans for a US Assets IPO to raise more than JPY1 trillion. 
• The MBO faces two immediate challenges: securing financing and the Board’s approval. The US Assets IPO would help alleviate both these issues.
• The potential market cap of US Assets is around US$24 billion, or 53% of 7&i’s market cap. The US Assets IPO should also encourage Couche-Tard to persist with its offer. 

• Following the introduction of 45 stocks in the F&O segment from 29 November, there will be big capping changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in December.
• We estimate one-way turnover of 21.9% leading to a one-way trade of INR 75bn (US$881m). There are 25 stocks with over 1x ADV to trade.
• There could be changes to the index methodology announced in the next few months and that could result in the deletion of a couple of constituents in March.

• NIO (NIO US) is a Chinese premium electric vehicle manufacturer listed across three exchanges. 
• NIO will likely struggle to reignite its growth with its three-brand strategy in a fiercely competitive market. Its promise to reach breakeven in 2026 is likely to be broken.  
• NIO’s valuation is stretched as it trades at a material premium to median Chinese EV peers’ EV/Sales and growth-adjusted EV/Sales multiples. 

• Janaghan Jeyakumar, CFA had predicted a series of changes in UK100 (a.k.a. F100) and UK250 (aka F250) and all predicted changes came to pass. F250 saw one extra change.
• There will be one more ad hoc announcement today. We think the replacement for Tritax Eurobox (EBOX LN) will be Mobico Group (MCG LN). 
• There were two ADDs in F250 which are VERY much worth looking at. Janaghan had addressed these in prior weeks as well. Those two names really stand out.

• Shiseido’s stock price has dropped 70% from its post-pandemic peak, presenting a buying opportunity amid ongoing industry challenges.
• The company’s two-year action plan aims to restore profitability through aggressive cost-cutting and restructuring measures.
• Successful execution could drive significant upside, while failure may attract acquisition interest due to Shiseido’s strong Asia-Pacific brand presence.

• NextAge’s stock price dropped nearly 8% on December 5, when the Topix was up, with no apparent news on either the company’s website or any local media.
• The next day, the Nikkei reported that the Financial Services Agency had raided the company’s office after confirming that insurance schemes had been deployed to defraud customers. 
• This sounds like an old story being leaked by rivals, so we called the company and confirmed: This is most likely old news. 

• Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
• 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
• In this note, we talk about the positive aspects of the deal.

• Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
• 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
• In this note, we talk about the not-so-good aspects of the deal.

• Workman was a purveyor of durable gear for workers in jobs like construction but then had the brilliant idea to transpose that expertise to create activewear like Decathlon.
• This was working well but then it decided to take on the likes of Fast Retailing and Shimamura by moving into casual clothing.
• Since then, same-store sales growth has been negative in many months and profits have fallen. The outlook is increasingly poor.

• Sales increased 3.6% YoY to JPY26.1bn, while operating profit decreased 25.3% YoY to JPY1.2bn.
• Japan segment sales rose 4.2% YoY to JPY23.2bn, driven by inbound demand and higher unit prices.
• SG&A expenses grew 4.1% YoY to JPY16.5bn, with a 0.4pp increase in the SG&A ratio to 63.3%.

• A Bloomberg article late in the trading session today said the Seven & I Holdings (3382 JP) MBO proposal by Ito family scion Ito Junro includes a US assets IPO.
• The idea? IPO proceeds would help pay down MBO debt to Japanese banks. Seven & i would retain a stake. This is not dissimilar to Berkshire Hathaway buying a stake.
• But more directly, this leads us back to 7&I (3382) – What If…  A Modest Proposal. Possible strategic mistake by Ito-san here. ACT should act on this.

• Nissan Tokyo Sales (8291 JP) is a network of 120 dealerships with revenue from sales and repairs of about US$1bn a year. Nissan owns 34%. P&C insurers own 21%.
• The P&C insurers will sell their 21%, to an offering and a ToSTNeT-3 buyback. Expect the net offering to be 10.5%, which is still 60+ days of ADV.
• But it has net cash, securities, more securities, and landholdings. It trades at <0.5x book and a very large part of book is finance-able. This looks like an MBO candidate.

• NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
• In this insight, we take a look at the names leading the race to become ADDs/DELs for these indices in the March 2025 index rebal event.
• Zomato (ZOMATO IN) and Jio Financial Services (JIOFIN IN) could see index inflows during the December 2024 rebalance and March 2025 rebalance.

• Freetech Intelligent Systems (1901036D CH)  is planning to raise about US$200m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are CITIC Securities, CICC, Huatai International, HSBC.
• Freetech Intelligent Technology Ltd (FITL) is a provider of intelligent driving solutions, focusing on advanced driver assistance systems (ADAS) and autonomous driving systems (ADS) technologies.
• It ranks third among domestic suppliers of Level 2 and Level 2+/2++ intelligent driving solutions in China, with a 2023 market share of 14.6%, according to CIC.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Studio City, Yuexiu Property, Rakuten Group
• In the US, the October JOLTS job openings came in above estimates at 7.74 mn (7.52 mn e / 7.37 mn p).
• Long-end USTs fell yesterday, while the front end outperformed on expectations that a December rate cut remains on the table.

• Headline profit numbers for FY24 indicate a 38-40% decline from 110 mn HKD in FY23 to 65-69 mn HKD, including non-cash impairment/property revaluation losses amounting to 44.2 mn HKD. 
• The implication is that core profits would have been 109-113 mn HKD for FY24; a slight earnings growth at the upper end is admirable in a weak HK demand environment.
• Based on core earnings, the stock trades at 6x PE, >67% of the market capitalization in cash, and a 10% dividend yield. The company will release earnings on December 16th.

• Behind MAO GEPING’s high profitability, there are hidden risks. One is the potential quality issues from ODM/OEM model, and the other is excessive reliance on Mr. Mao Geping’s personal IP.
• Without strong R&D capabilities, high-end positioning isn’t firm.With increasing downward pressure in the industry, MAO GEPING would become passive in fierce competition and the industry trend of customers pursuing cost-effectiveness.
• MAO GEPING’s valuation could be lower than Giant Biogene due to concerns on future sustainable growth prospects and profitability, but higher than industry average due to the strong short-term financial performance.  

• We are reiterating our Buy rating, $6 price target and projections for Vera Bradley with the company announcing 3QFY25 (October) results before the open on Wednesday.
• We believe 3Q, the first full quarter of operations after the relaunch of the Vera Bradley brand in both the main line and outlet stores, remained a key learning experience, as management, after dramatically shifting the entire main line store and materially changing the outlets, begins to calibrate feedback to maximize the shifts and begin to attract a wider customer base.
• While we remain cautious in our projections in the nearer term, we believe the shifts will help revive Vera Bradley and drive strong returns in the longer term.

• ADEA announced a licensing agreement with AMZN setting the path for greater free cash flow in 2025. ADEA has previously mentioned it was close to signing two major licensing agreements.   
• We assume ADEA’s full year guidance includes catch-up revenue associated with the license since AMZN was never a licensee before.   
• ADEA had already signed several video streaming licenses, but AMZN would serve as the largest to date. It gives the investment story a stronger foundation.