Consumer

• PDD reported C3Q24 top line, non-GAAP EBIT and non-GAAP net income (2.6%), (12.4%) and (6.3%) vs. cons., and (3.4%)
• PDD is easing its appeasement of China-platform merchants, positive for profitability,but its transition to the semi-consignment model will likely continue as it tries to improve merchandise selection and logistics quality
• We reiterate BUY as PDD is undervalued at 8.1x CY2025 P/E, but we cut its TP to US$ 146 to reflect slower growth amid increasing overseas investment.

• Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
• The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
• Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.

• At equal price to ACT, Ito-san wins because of certainty/immediacy, but provided his price is above the bottom of the range and adequately compensates 7&i for “additional actionable avenues.”
• The Amcor Limited (AMC AU)/Berry Global Group (BERY US) merger looks clean. However, Berry’s % of earnings (revs, EBITDA, and profit), are higher than the % under the share split
• This Temasek-led development will have a marginal impact on Tuya Inc (TUYA US). Creating supply and demand is hard. And Temasek-held/backed vehicles on the SGX are already abundant.

• Midea Group (300 HK) and Black Sesame International Holding (2533 HK) will be added to the Hang Seng Composite Index (HSCI) after the close on 6 December.
• Midea Group (300 HK) is already in Southbound Stock Connect while Black Sesame International Holding (2533 HK) will be added from the open on 9 December.
• There is a huge lock-up expiry for Black Sesame International Holding (2533 HK) in February while the lock-up for Midea Group (300 HK) cornerstone investors ends in March.

• Zomato (ZOMATO IN) will replace JSW Steel Ltd (JSTL IN) in the S&P BSE SENSEX Index (SENSEX INDEX) at the close on 20 December.
• This is the first of many potential inclusions for Zomato in local indices over the next few months and is due to inclusion of the stock in the F&O segment.
• Futures and options in Zomato (ZOMATO IN) start trading from the open on 29 November. Expect increased volatility in the short-term and an increase in traded volumes.

• Even if the initial AUM is small, the impact of launch of a publicly offered mutual fund for retail investors by a foreign activist investor is expected to be significant.
• If Dalton gains the support of individual investors through publicly offered investment trust, it would give more legitimacy to the management improvement plans that Dalton is pressing Japanese company for.
• Increased attention to the activist investors is expected to lead to a certain number of individual shareholders voting in favor of shareholder proposals, as well as  overseas investor engagement.

Games Workshop Group’s (GAW’s) H125 trading update suggests the company enjoyed a strong Q225 in both its core business (due to the launch of the fourth edition of Age of Sigmar midway through Q125) and licensing (due to the success of the Space Marine 2 video game). These are impressive in the context of the tough comparative from the prior year’s launch of the new edition of Warhammer 40K (40K) and the currency headwinds in the early part of H125. We upgrade our profit estimates for FY25 (by 7%) and FY26 (by 3%) to reflect the outperformance versus our prior expectations.

• The December 2024 index review results for the KOSPI Indices were announced after the close on Thursday 21st November 2024.
• There will be four ADDs and five DELs for KOSPI 200 during the December 2024 index rebal event. 
• We predicted 8 out of 9 changes correctly. We missed one of the DELs and we expected a couple extra changes which did not materialize.

• FineToday Holdings Co Ltd (289A JP) is scheduled to be listed on 17 December 2024, at the prime market of TSE at an expected valuation of ~$1.5bn.
• Addition to the small-cap segment of both global indices is forecasted to take place at the May and June 2025 quarterly reviews.
• Full exercise of the greenshoe can increase free float from 35% to 45% hence the security’s passive fund demand upon inclusion.

• Nexstar Media Group reported its third-quarter 2024 financial results, delivering record high revenues and showcasing strong operational performance in a challenging media landscape.
• The company achieved its highest third-quarter total net revenue, driven by record-setting distribution and political advertising revenues.
• The financial results reflect a solid balance between increasing revenues and maintaining cost efficiency, showcasing Nexstar’s ability to leverage its extensive media assets effectively.

• AutoZone, Inc. delivered a robust performance in the fourth quarter of the fiscal year 2024, led by significant sales increases and growth strategies in both its domestic and international operations.
• The company’s total sales surged by 9% in the fourth quarter, while earnings per share (EPS) increased by 11%.
• Underpinning these results was a consistent focus on customer service excellence and strategic expansion, particularly in commercial sales and international operations.

• McDonald’s Corporation’s third quarter of 2024 saw mixed results amid a challenging quarter for the Quick Service Restaurant (QSR) sector.
• During the earnings call, CEO Chris Kempczinski addressed a recent E.
• coli crisis linked to slivered onions, emphasizing the company’s rapid response and commitment to customer safety.

• Altria Group’s third-quarter 2024 earnings call revealed a company in transition, managing both resilience in traditional segments and growth in new areas, weighted against challenges such as regulatory pressures and changing market dynamics.
• The company affirmed financial strength through robust earnings, ongoing share repurchases, and commitment to a progressive dividend, although its future hinges on regulatory landscapes and consumer shifts towards reduced-risk products.
• 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.

• The Under Armour earnings for the second quarter of fiscal 2025 presents a picture of both challenges and early successes in the company’s efforts to reposition itself in the highly competitive athletic apparel market.
• On the positive side, Under Armour has managed to report profitability that exceeded expectations, with an adjusted operating income beat of approximately $50 million.
• This is attributed to effective cost-control measures, a reduction in promotion and discounting activities, and ongoing product costing initiatives.

• Collektr, a livestream collectibles platform based in the Asia-Pacific region, has raised US$1.3 million in a pre-Series A funding round led by AC Ventures Malaysia.
• The round also saw participation from The Hive Southeast Asia, Creador Foundation, and 18 unnamed angel investors.
• This follows a seed round led by First Move, bringing the total investment to date to US$1.3 million.

• Deckers Brands experienced a robust fiscal second quarter of 2025 under the leadership of newly appointed CEO, Stefano Caroti.
• The company continues to uphold its long-standing strategy while integrating four core principles to drive future growth: consumer-first mindset, brandless philosophy, innovation forward, and a globally driven approach.
• These principles have significantly contributed to Deckers Brands’ performance, positioning it for sustained success in the long term.

• Hilton Grand Vacations reported its third-quarter 2024 results, providing insights into its financial performance, strategic progress, and the impact of recent macroeconomic and environmental challenges.
• The company’s performance this quarter was shaped by several key factors, including the integration of its Bluegreen acquisition, strategic reorganization, and external disruptions such as hurricane impacts.
• 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.

• FineToday Holdings Co Ltd (289A JP) is a Japanese personal care business seeking to raise up to US$500 million. It will be listed on 17 December.   
• FineToday has four product categories: Hair care, Skin care, Body care, and others. Hair care is the largest category, accounting for 49.0% of 9M24 revenue. 
• The bull case rests on return to revenue growth, three-pronged growth strategy, top-quartile profitability and top-tier FCF generation. 

• CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
• FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
• In this note, we talk about the not-so-positive aspects of the deal.

• The local market’s buzzing that LG Chem could face a 200-300 billion KRW tax hit from Pillar Two next year, with LGES ramping up U.S. production.
• LG Chem may be reconsidering its plan to sell 2% of its LGES stake, dropping ownership below 80%, shifting the tax burden to LGES instead of itself.
• Flagging this now—LG Chem’s tax burden looms. Consider shorting LGES or a long-short with LG Chem, plus prep for the 2T KRW block deal with the pre-disclosure process.

• DigiPlus Interactive (PLUS PM) presented PSE Star investor day yesterday and briefly analyzed two game-changing catalysts from the call: a) CasinoPlus acquisition and b) Brazil license. 
• The expected TAM associated with e-games/Bingo in Brazil is 250 bn pesos (4 bn USD), compared to the Philippines, which is currently cycling at 160 bn pesos (Q3 PAGCOR data). 
• The stock trades at 7.8x FYPE with 15% of the market cap in cash and a 3.8% dividend yield (30% payout ratio) with a seasonal uptick in Q4 FY24. 

• In 3Q24, PDD released strong revenue growth, but a flat margin.
• We believe, in 2025, PDD will continue to focus on growth rather than profit.
• We conclude an upside of 43% and a price target of US$167 for 2025. Buy.

• TCOM reported C3Q24 revenue 1.4%/1.6% higher than our est./cons., non-GAAP operating income is 12.5%/5.4% higher than our est./cons., mainly due to strong domestic sales and efficient cost control.
• We expect revenue growth to accelerate in 4Q24 and 2025,backed by domestic travel recovery and steady overseas expansion.AI powered cost saving bringing extra leverage in margin is an additional positive.
• We keep the stock as BUY rating and raise TP to US$74/ADS.

• In late 2022, the company began its evolution from a consumer-focused, U.S. restaurant business into a global, food-focused organization with two distinct business units.
• The company’s largest operating unit is Sadot Agri-Foods, which is a vertically integrated international food supply chain company engaged in trading and shipping sustainable food and commodities such as soybeans, wheat and corn.
• Sadot’s legacy restaurant business is currently in the process of being divested.

• We compared similar growth stage of Alibaba to Pinduoduo, when GMV of both platforms increase from RMB1 trillion to RMB4 trillion, to facilitate better understanding of efficiency edge of Pinduoduo.
• Contrary to consensus, Pinduoduo didn’t do better than Alibaba on OPEX (advertising expenditure in particular), but it did extract much greater value from the ecosystem via significantly higher take-rate.
• The findings highlight how Pinduoduo aggregate user traffic at surprisingly high cost to beef up merchant competition in terms of cost optimization and user acquisition, with Pinduoduo  reaping greatest value.

• Contribution from Amer Sports (AS US) will rise to 5.1%, 7.2%, and 8.9% of Anta Sports Products (2020 HK)‘s earnings in FY24-26, making it increasingly important.
• Amer turned around sharply YoY in 3Q24 with a net profit of US$55.8m. Its gross margin sustained an uptrend, with excellent potential for business growth in Greater China.
• Positive guidance on FY25 outlook with a low-double-digit-to-mid-teens level revenue growth, further expansion in operating margin, and continuous cuts in net finance costs.

• All India Consumer Products Distributors Federation (AICPDF) has again raised concerns about Mamaearth, claiming that distributors and retailers are stuck with around INR 300 crore worth of unsold products.
• The quantum inventory concern that distributors are raising is almost 5x of what Honasa has taken the hit.
• This could bring some serious repercussions on the company’s working capital and growth plans

• Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
• Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible. 
• The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.

• I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
• Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
• Fat div. Lots of volume to buy in the next several months, but the big story is future measures.

• Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
• There are major areas of growth, both territorially and new offshoot businesses.  Seven is already 32% more efficient than Lawson but more to come.
• Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.

• Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent. 
• The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
• The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.

• BABA reported CY3Q24 top line, adjusted EBITA and non-GAAP net profit (1.0%), (1.6%) and in-line vs. consensus. 
• CMR improved amid monetization changes that narrowed the growth gap with GMV, but also eliminated some low-single profit sellers from its GMV. 
• Cloud and overseas e-commerce revenue also saw good growth and improved profitability. All of BABA’s key businesses are sputtering to life while macro tailwinds are also favorable. 

• CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
• FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
• In this note, we talk about the positive aspects of the deal.

• There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
• If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
• The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.

• The larger-than-expected Value-Up fund will drive passive flows surpassing the KRX 300 in both size and speed.
• Value-Up ETFs’ AUM is ₩636.5B, with retail dominating. Major institutions, like pensions, are on standby, but passive flows could hit ₩1.5T post-Dec 20 rebalancing.
• Single-Stock setups may not fit, but for alpha-seeking Value-Up strategies, focus on names with higher passive impact from the boosted AUM.

• During Tesla’s third quarter of 2024 financial report, several key points emerged that provide an overview of the company’s performance and strategic direction.
• One of the prominent highlights was Tesla’s achievement of record deliveries in a market experiencing overall industry declines.
• This emphasizes Tesla’s ability to navigate a challenging automotive landscape, an important consideration for investors assessing the company’s resilience and market positioning.

• Honda Motor Co., Ltd.’s financial results for the first quarter of the fiscal year 2025 offer a complex picture of both achievements and challenges.
• The company reported its highest-ever quarterly operating profit of JPY 484.7 billion, marking a significant year-on-year increase by JPY 90.2 billion.
• This improvement was largely driven by increased unit sales in the motorcycle business in India and Brazil, as well as robust sales of hybrid automobile models in Japan and the United States.

• Days ago we got a dramatic headline about Ito family scion ITO Junro and his family company Ito Kogyo making a bid for Seven & I Holdings (3382 JP). 
• The stock popped, then fell. Details were not clear. Was the ¥9trln an EV number? A market cap? Was he serious? How would he get funding. Skepticism was rife. 
• Today we get more headlines from NHK. who says the family wants to raise ¥8trln to take 7&i private by end-Feb 2025.

• ASICS has demonstrated exceptional brand rejuvenation and profitability improvements, with an ambitious 2026 plan that capitalizes on high-growth lifestyle categories
• However, the pivot toward fashion and luxury markets introduces heightened execution risk.
• While the upgraded MTP targets are commendable, much of the good news appears to be priced in.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
• In this insight, we take a look at our updated flow expectations.

• The stock has risen by 38% since our last buy rate.
• The 3Q24 results are still healthy – both growth rate and operating margin.
• We set a downside of 19% for the end of 2025.

• EFCI Ltd (EFCIL IN) is one of few companies in the Flex Space Operator Business present in the entire value chain providing an unbeatable edge in Cost competitiveness.
• Management target is to double revenue in FY25 capitalising on sector tailwinds driving exponential growth in all business verticals.
• Completed Backward Integration through manufacturing furniture which will help increase margins as furniture comprise  40-50% of total fitout cost.

• Our outlook remains bullish following the S&P 500’s multi-month base breakout above 5670, alongside healthy market dynamics which have continued to improve.
• Two weeks ago, our election day report (11/5/24) was titled “Buy the Pullback,” and with the SPX/QQQ/IWM pulling back to their 20-day MAs, it’s time to buy the pullback again.
• We continue to expect significant upside into year-end and early 2025, and we expect support at the 20-day MAs on the aforementioned indexes (though support at 50-day MAs is possible).

• The Walt Disney Company’s recent fourth-quarter and full-year 2024 financial results provided a comprehensive overview of both the progress and challenges faced by the company.
• CEO Bob Iger highlighted the company’s strategic positioning for growth, emphasizing their momentum as a result of specific strategies across various business segments.
• However, the commentary also reveals nuances in their operational dynamics and future outlook.

• CJ Cheiljedang announced that it is considering on potentially selling its bio business for about 5-6 trillion won which could be more than its market cap. 
• CJ Cheiljedang’s bio business is expected to have more than 4 trillion won in sales and about 700 billion won in EBITDA in 2024.
• We are positive on the company’s efforts to sell its Bio Business and reinvest it in its food business.

• The recent earnings call for Domino’s Pizza highlighted several key aspects of its financial performance, strategic initiatives, and market dynamics, revealing both promising areas and challenges.
• The company’s Hungry for MORE strategy appears to be yielding positive results domestically, but international markets face significant hurdles.
• Domestically, Domino’s Pizza has successfully leveraged its value-focused Hungry for MORE strategy.

• 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 the Q3 results for the Philippines picks and our management meeting on our recent trip to Hong Kong. 

• Back on 14 July 2024, WH Group (288 HK) (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ
• WHG the world’s largest pork producer, has now confirmed it will sell up to 20% of Smithfield’s shares on a fully diluted basis, in an initial public offering.
• WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.

• Mamaearth’s journey to the stock market has been marred by allegations of channel stuffing, inventory mismanagement, and inconsistent communication from management. 
• The company’s struggles in Q2 FY25 have raised concerns about their financial health and transparency. 
• The forensic analysis is a deeper look into the allegations, redflags and bigger problems that require investor’s attention

• Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.
• We believe the market ignores TME because of its flat revenue.
• However, we expect TME will significantly benefit from its dominant position in the Chinese music market.

• Vols have stabilized as market has moved away from peak short gamma levels just above the recent market highs.
• HSI Put positions appear to have been rolled down to the 19,000 strike.
• HSCEI saw significant put volume at the 6300 strike with ~15,000 contracts per day trading at that level.

• Celsius Holdings Inc.’s third-quarter 2024 earnings reveal a mixture of growth opportunities and challenges.
• The energy drink company has managed to maintain robust consumer demand and retail sales growth despite a dip in total revenue compared to the previous year.
• The company recorded a modest 7.1% increase in retail sales year-over-year for the quarter, with unit sales rising by 7.3%.

• Airbnb, Inc. reported its financial results for the third quarter of 2024, showcasing a mixture of positives and negatives.
• The company experienced continued growth in Nights and Experiences Booked, with bookings reaching 123 million, and saw a 10% increase in revenue year-over-year to $3.7 billion.
• Net income stood at $1.4 billion, translating to a notable 37% net income margin.

• Galaxy Gaming is being acquired by Evolution AB for $3.20/share, with a 17% spread and minimal regulatory hurdles.
• OCI N.V. plans a $1bn capital return in H1 2025, equating to 40% of its market cap.
• Benson Hill’s buyout spread widened to 60% due to liquidity issues and ongoing buyout negotiations nearing completion.

• Orbis Japan Equity Fund recently wrote about auto supplier Koito Manufacturing (7276 JP) in their second-quarter 2024 letter.
• So, who is Koito? It’s the world’s largest manufacturer of automotive lighting products, serving primarily Japanese customers such as Toyota, Nissan and Honda.
• What stood out in Orbis’s second-quarter letter is that Koito plans to return JPY 350 billion to shareholders in the next five years, more than half the current market cap. Rational capital allocation is rare in Japan, so this number caught my attention.

• Ginebra San Miguel (GSMI PM) reported a solid Q3 FY24, with revenues/profits up 15%/25% YoY, led by 5% volume growth (10% YTD growth).
• Net cash and investments are now >15 bn pesos (21% of market capitalization). For Q4 2024, the company paid a dividend of 4 pesos/share (6.2% dividend yield). 
• This is one of the cheapest liquor companies we know, trading at 10x FY24 PE/6.3 EV-EBITDA. It has a >33% ROCE and a great growth/dividend payment profile.

• A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
• Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here. 
• Here I suggest an alternate solution which might get everyone what they want.

• On its first closing date on 15 November, Xingda International (1899 HK) declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares. 
• The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it. 
• The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.

• There is a high probability of Gamuda Bhd (GAM MK) replacing Genting Malaysia (GENM MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) in December.
• 99 Speed Mart Retail Holdings (99SPD MK) is a close add and needs small outperformance over the next week to be added. That could see Genting Bhd (GENT MK) deleted.
• Passive funds benchmarked to the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) will need to buy 0.3-0.75x ADV on the potential adds and sell 0.9-1.3x ADV on the potential deletes.

• PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to “exit”.
• Privatizing PAGD at low price and integrating it into the Ping An Group’s system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
• Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.

• Back on the 24 September, tyre component manufacturer Xingda International (1899 HK) announced a zero-premium $1.30/share cash Offer from Liu Jinlan, chairman and executive director.
• Liu and concert parties held 37.03%, and the Offer was conditional on a 50% acceptance hurdle. The IFA concluded the Offer was not fair.
• Surprisingly, 23.73% of shares out have tendered, and the Offer is now unconditional in all respects. The Offer will remain open to acceptances until the 29th November.

• Oriental Watch reported H1 FY25 revenues/profits down 2.6%/-13.7 % YoY despite the tough retail sales environment, especially in HK (25% of revenues).
• The company declared a 24.6 HKD cents dividend, equivalent to a 14% dividend yield annualized on the current price.
• With 62% of the market capitalization in cash, a 7x PE, and a 14% dividend yield (assuming a consistent 100% payout), this is a name to look at.

• Listing criteria for TSE Growth Market will be raised to over 4 billion yen in market capitalization after 10 years of listing, but the details are left for further discussion.
• It is necessary to provide opportunities for founders to exit and recover their capital without relying on an IPO, for example by creating a market for unlisted shares.
• Switching to a policy of using cash for shareholder returns because of the inability to comply with TSE Growth Market listing maintenance standards is not a fundamental solution.

• SOUTHBOUND gross trading activity still high. Net buying very strong. 7 names traded more than US$1bn. Last week I said tech would continue to be bought. It was.
• The trend continues to net sales of ETFs and high div SOEs. Net buying is very, very broad-based. Tracker Fund of Hong Kong (2800 HK) is batted around like crazy.
• I expect HK-listed tech to continue getting bought. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US.

• 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: S.F. Holding (002352 CH) is premarketing an H Share listing to raise US$1.0-1.5 billion, Kansai Electric Power (9503 JP)‘s US$3.5 billion placement.  
• Event-Driven developments: Seven & I Holdings (3382 JP), Fuji Soft Inc (9749 JP), Nishimoto (9260 JP), Macromill, Inc (3978 JP), Agro Kanesho (4955 JP), Renewable Japan (9522 JP), CPMC.

• There are people who’ll take profit in Seven & I (3382 JP) because of path dependency til year-end. It will drag out a while: buy the dips, trim on pops.
• Just like in Lufax Holding (6623 HK)‘s special dividend, expect Ping An to boost its holding in Ping An Healthcare and Technology (1833 HK) via the stealthy scrip dividend option. 
• The landscape for Nec Networks & System Integr (1973 JP) has FULLY changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable.  

• Toyota Motor Corporation has announced its fiscal year 2025 second-quarter financial results.
• The company achieved an operating income of JPY 2.4642 trillion for the first half of the fiscal year, which was maintained close to the previous year despite some setbacks in production and increases in expenses.
• While sales revenue touched JPY 23.2824 trillion, the net income of JPY 1.9071 trillion saw a significant decrease from the prior year, primarily due to exchange rate fluctuations which caused valuation losses in foreign currency assets.

• The Johnson Controls International plc (JCI) fourth-quarter fiscal 2024 earnings revealed significant insights into the company’s performance and strategic direction.
• Here is an analysis considering both the positive and negative aspects.
• The positive highlights include strong financial performance and strategic advancements.

• MercadoLibre reported robust financial results for the third quarter of 2024, showcasing strong performance across its e-commerce and fintech sectors in Latin America.
• The company’s gross merchandise volume (GMV) saw significant growth, with Brazil witnessing a 34% increase year-on-year and Mexico a 27% rise.
• Moreover, the company made substantial gains in market share in these key countries.

• Performance Food Group’s (PFG) recent earnings conference call revealed several key developments and financial results for the first quarter of the fiscal year 2025.
• The call focused on strategic acquisitions, financial performance, and market conditions affecting the company.In terms of acquisitions, PFG completed two significant deals: purchasing Jose Santiago, a leading foodservice distributor in Puerto Rico, and Cheney Brothers, a major player in the Southeast U.S. foodservice market.
• The integration of Jose Santiago has been smooth, with the company already positively contributing to PFG’s results.

• In the recent results, Wynn Resorts reported mixed performance across its key markets during the third quarter of 2024.
• In Las Vegas, the company faced challenging comparisons from the previous year but managed to increase normalized revenue by 1%.
• The gaming segment, however, saw a dip in table drop, which the management attributed to high-end consumer segment volatility rather than any structural issues.

• CVS Health’s recent third-quarter 2024 earnings report presents a multifaceted view of the company’s performance and strategic direction.
• The company’s revenue reached approximately $95.4 billion, marking a 6% increase from the previous year.
• However, the adjusted earnings per share (EPS) of $1.09 indicate challenges, particularly within the Health Care Benefits (HCB) segment.

• Duolingo, a prominent player in the online language learning space, has reported its financial results for the third quarter of 2024, outlining both strengths and areas to watch.
• The company demonstrated robust growth in key metrics, including a 54% year-over-year increase in daily active users (DAUs), with its Family Plan onboarding 21% of its subscriber base.
• This impressive user growth, particularly after a high growth rate in previous years, suggests that Duolingo continues to successfully engage its expanding user base.

• Ping An Healthcare (1833 HK) (PA Gooddoctor), which was spun off from Ping An Insurance (601318 CH) and listed in May 2018, has announced a change in use of proceeds.
• Part of that change includes the payment of a punchy HK$9.70/share special dividend.
• The more interesting aspect is that a scrip dividend is also afforded, which should allow a stealth MBO from Ping An at zero premium.

• Total revenue grew slightly as we expected in our preview note.
• The operating margin improved significantly, but this was due to the shrinks of non-cash items.
• However, we believe Alibaba will benefit from the boycott against JD.com and the disposal of Sun Art.

• Chinese cemetery operator with three main assets: the Anxian Yuan cemetery in Hangzhou, the Fushouyuan cemetery in Yinchuan and the Dachenshan cemetery in Niuxin Village, Guizhou Province
• The stock is inexpensive at 6.1x trailing P/E with a 13.3% dividend yield that’s covered by cash flows. Further, net cash represents 82% of market cap with limited contract liabilities.
• Recent tomb sales has been weak for reasons that seem macro related. Other risks are historical share dilution: the 2020 rights issue was under-priced, 85% taken up by the founder. 

• With external female board member resources under pressure, it will be extremely difficult to raise the percentage of female board members steadily at this rate.
• The trump card for this is matching numbers. Increasingly, female board members with no management background or outside talent are being recruited to female managerial positions.
• It is expected that fewer companies will move to Company with US type 3 Statutory Committees in order to avoid increasing the number of statutory executive officers.

• Marriott International’s third-quarter financial performance for 2024 indicated a mixture of growth and existing challenges within the global hospitality landscape.
• The company reported a 6% year-over-year increase in net rooms, underscoring its robust expansion efforts and strong development activities.
• Global Revenue Per Available Room (RevPAR) rose 3% for the quarter, fueled by a 2.5% increase in Average Daily Rate (ADR), with the group segment leading the charge, posting a 10% rise in RevPAR, which highlights the sustained demand in this category.

• Sales increased by 3.6% YoY to JPY26.1bn, but operating profit decreased by 25.3% YoY to JPY1.2bn.
• Paris Miki Inc. sales rose 4.2% YoY to JPY23.2bn, with 13 store openings and nine closures.
• China subsidiary faced a sales decline of 0.9% YoY to JPY3.0bn, resulting in an operating loss.

• Group sales were JPY45.8bn (-31.7% YoY), with net income attributable to owners of the parent at JPY2.8bn (-31.5% YoY).
• Content and Digital business sales reached JPY8.0bn (+7.9% YoY), driven by Tsuburaya Productions’ overseas revenue growth of 34.0% YoY.
• PS business reported sales of JPY37.2bn (-37.0% YoY), with 48,636 amusement machines sold, down 77,389 units YoY.

• Revenue increased by 10.4% YoY to JPY8.6bn, with directly operated clubs contributing JPY5.3bn and franchise revenue JPY3.1bn.
• Operating profit decreased by 28.2% YoY to JPY1.4bn, impacted by higher costs and growth investments, especially overseas.
• Membership count rose to 935,000, with 33 new clubs opened and three closed, totaling 1,163 clubs.

• Duckhorn Portfolio Inc, trading as NAPA, had a disappointing post-IPO performance in 2022
• Despite this, the company is viewed as a cheap investment with potential for growth
• With TSG showing incentives for a potential sale and interest from strategic acquirers, there is optimism that NAPA could potentially double in value within the next year

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.

• Madison Square Garden Sports Corp. reported strong financial results for fiscal 2024, supported by the successful seasons of its two major franchises, the New York Knicks and New York Rangers.
• The company’s total revenues exceeded $1 billion, marking a new record.
• Adjusted operating income reached $172 million, also a record, indicating robust demand among fans and partners throughout the season.

• Today, CVC announced a deal to buy out Macromill, Inc (3978 JP). It is agreed and supported by management and the Board. 
• The shareholder register on this stock is wide open. It is not burdened by crossholders. It IS burdened by 7 large active holders who have 55%. 
• Those holders may complain about the process, the transparency, and the low price. This could be a target for an activist or a strategic overbidder.

• Macromill, Inc (3978 JP) has recommended CVC’s tender offer at JPY1,150, a 40.1% premium to the last close.
• While the offer is attractive compared to historical trading ranges, it is 41% below the IPO price and 11% below the midpoint IFA DCF valuation range. 
• The lack of an irrevocable, open shareholder register and large foreign institutions’ shareholding increases the odds of activism to force a bump.  

• Swiggy (1255298D IN) debuts with an 8% premium, raising Rs. 11,328 crore in IPO for Dark store expansion, brand promotion, tech & inorganic growth.
• Swiggy lags behind Zomato across metrics, while Zomato diversifies with high-growth ticketing and “Going Out” segments.
• With both segments is on the edge of becoming Contribution and EBITDA positive, one need to look the results of upcoming quarters of swiggy carefully.

• It has been an eventful week for Naspers and Prosus – Tencent reported 3Q FY24 results yesterday after the HK close and Swiggy listed on the NSE and BSE.
• Prosus sold shares in Swiggy worth $500m and retains an interest of 25% (fully diluted basis).
• Since 2017, Naspers and Prosus invested $1.3bn to build a 31% stake. The group have created $2bn of value for shareholders following the listing.

• Geely’s revenue grew by 20% YoY and deliveries increased by 19% YoY in 3Q24.
• The operating margin improved to 5.3% in 3Q24 versus 2.9% in 3Q23.
• We conclude an upside of 58% and a price target of HK$22 for the end of 2025.

• C3Q24 results from LEAP Motors seems to indicate the profit margins of low-priced EV can reach high single digits.
• We thus revised up XPEV’s 2024-25 top line by 8% and 28% on successful launch of P7+, 2024-25 gross margins by 0.6ppt and 1.7ppt
• Despite these improvements, we opt to maintain the rating of SELL and TP of US$5 unchanged as XPEV’s path to profitability is still unclear.

• Sankyo, a Japanese company previously seen as a value trap, has made changes to enhance shareholder value
• The company has implemented share buybacks, acquiring 24% of shares in the last year and leading to a higher valuation
• The focus on capital efficiency and returning value to shareholders has revitalized Sankyo, leading to increased investor confidence and potential future growth opportunities

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.

• Leggett & Platt’s third quarter 2024 results reflect a challenging performance environment driven by several demand and operational pressures.
• Overall sales amounted to $1.1 billion, representing a 6% decline year-over-year.
• The decrease was primarily attributed to volume declines across all three business segments—Bedding Products, Specialized Products, and Furniture, Flooring and Textile Products—coupled with reductions in raw material-related selling prices.

• Revenue reached JPY5.5bn (+33.7% YoY), driven by growth in Second-hand Online and Mobile & Telecommunications segments.
• Operating profit turned positive at JPY69mn, with a 1.3% margin, despite JPY68mn in relocation expenses.
• The company recorded a JPY32mn derivatives valuation loss due to a stock price decline in a CFD contract.

• Newell Brands recently shared their third quarter 2024 results, highlighting both progress and challenges across various segments.
• The company has been implementing a new corporate strategy aimed at innovation, brand building, and market excellence for more profitable growth, and their results suggest some positive impacts from these efforts.
• On the financial front, Newell reported a narrowing decline in core sales to 1.7% in the third quarter, an improvement compared to the previous quarters of 2024.