Daily Briefs

• HLB’s process of selecting a lead underwriter for the KOSPI listing has been witnessed in Yeouido.
• The price impact becomes most evident on the board approval date as the point at which this impact is most pronounced is substantially accelerated due to the market’s learning effect.
• There is a strong likelihood that HLB will have its board decision by mid-September, necessitating our preparation for a position setup targeting this timing.

• Sogo & Seibu’s labor union threatens strike if job protection talks stall. This emphasizes the number of considerations Seven & I Holdings (3382 JP) had to consider during changes.
• Had ValueAct shown more patience, they might have worked with Seven & I to improve the struggling Eto Yokado supermarkets business.
• Thus, ValueAct’s investor activism campaign seem unlikely to achieve a full restructuring of underperforming businesses at Seven & I.

• The ES50 Index is one of the most highly-tracked indices in mainland Europe and the annual index review takes place in September.
• The index changes will be confirmed after the close on 1st September 2023.
• In this insight, we take a final look the names leading the race to become ADDs/DELs for the upcoming index review.

• PT Nippon Indosari Corpindo (ROTI IJ) booked a strong profit performance in 2Q2023 despite slower sales growth, as return rates normalised and raw material and packaging prices stabilised further. 
• Sales to Modern Trade led the way in 2Q2023 as post-pandemic consumption habits shifted to those formats, whilst General Trade saw pressure as hawkers and warung owners took holidays
• ROTI should continue to benefit from lower input costs together with a normalisation of its General Trade Business plus productivity is set to improve markedly in 2H2023.

• Millie’s Library is trying to complete its IPO again in September 2023, after a failed attempt in November 2022. The IPO price range is from 20,000 won to 23,000 won.
• Founded in 2016, Millie’s Library is a reading platform company that introduced the first monthly e-book subscription service in Korea in October 2017. 
• Our valuation analysis suggests base case target price of 31,769 won per share, which is 38% higher than the high end of the IPO price range of 23,000 won.

• It’s necessary to clearly present cash allocation policy to investors and communicate with them, but unless this policy is convincing and feasible, investors cannot envision an increase in corporate value.
• Companies that use ROE or ROIC as KPIs and disclose their cost of capital are still limited. The low return on cash flow may be the reason behind this.
• As TOPIX is correlating more rapidly with nominal GDP than with P/B after 2020, there’s increasing need to communicate to investors that free cash flow will grow through cash allocation.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Genting Berhad’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• Tuhu Car (2007986D HK) is looking to raise up to US$300m in its upcoming Hong Kong IPO. 
• Tuhu is an integrated online and offline platform for automotive services in China.
• We have looked at the firm’s past performance in earlier notes. In this note, we discuss the PHIP updates.

• Sirius XM Holdings delivered a solid result and managed an all-around beat last quarter.
• The company’s strategic approach to managing expenses and optimizing efficiency resulted in improved cash operating expenses.
• Sirius XM Holdings maintained its prudent financial approach, exemplified by strong free cash flow generation and responsible capital allocation strategies prioritizing shareholder returns.

• Molson Coors Beverage Company delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
• The company marked the most successful quarter for reported net sales revenue since the merger of Molson and Coors in 2005.
• Notably, Molson Coors experienced remarkable growth in its key brands, with Coors Light and Miller Lite playing a pivotal role in driving positive trends.