ConsumerDaily Briefs

Consumer: Snack Empire Holdings Ltd, Alibaba Group, Mitsubishi Shokuhin, Bata India Ltd, DiDi Chuxing and more

In today’s briefing:

  • Snack Empire: One of The Few Restaurant Businesses That I Would Own
  • Index Rebalance & ETF Flow Recap: KOSPI2, KQ150, R3000, STAR50, ASX200, KBANK, Alibaba, Exec Order
  • Japan’s Governance: TOB of Own Stock
  • Result Update:Bata India
  • DiDi Chuxing Pre-IPO – Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch

Snack Empire: One of The Few Restaurant Businesses That I Would Own

By Steven Chen

  • I am reluctant to own a restaurant business;
  • But Snack Empire can be an exceptional hidden gem in this challenging space;
  • Given the high-quality fundamentals and attractive pricing, the stock can be a decent candidate for multi-bagger collectors.

Index Rebalance & ETF Flow Recap: KOSPI2, KQ150, R3000, STAR50, ASX200, KBANK, Alibaba, Exec Order

By Brian Freitas

In this weeks recap, we look at:

There have been large outflows from Korea focused ETFs during the week as well as the iShares MSCI Japan ETF (EWJ US), while inflows continue into the MSCI EM ex China ETF iShares MSCI Emerging Markets (EMXC US)

Events This Week

Click on the link under Detail to go to the Insight.

Date

Index

Detail

18 June

FTSE GEIS

18 June

FTSE China 50

18 June

FTSE China A50

18 June

FTSE Taiwan 50

18 June

KLCI

18 June

ASX 200

18 June

SENSEX


Japan’s Governance: TOB of Own Stock

By Aki Matsumoto

In my previous article, “Parent-Subsidiary Listing and Investment Strategy,” I pointed out that the parent company is likely to adopt such a management strategy because it can use its excess cash reserves to boost its profitability by making a highly profitable subsidiary a wholly owned subsidiary. In fact, in a previous article, “NTT Docomo TOB and Aftermath,” it was thought that the aforementioned management strategy would be effective for the parent company, NTT, but given the company’s history as a public company and the legal environment, there seemed hurdles that must be overcome to make NTT Docomo a wholly owned subsidiary, and it is not likely to be easy. However, the TOB was successful. In the unique Japanese practice of parent-subsidiary listings, there have been a number of moves to eliminate this practice. As I mentioned above, the conditions for a parent company to make a subsidiary its wholly owned subsidiary are (1) the subsidiary’s profitability is higher (than that of the parent company), and (2) the parent company has a very large amount of excess cash reserves (there are no effective investment opportunities to use the cash). In this article, I would like to consider the opposite of these management strategies.


Result Update:Bata India

By Axis Direct

We trim our FY22/23E estimates given subdued discretionary demand due to extended lockdown in Q1FY22 and continue to maintain HOLD rating with a revised TP of Rs. 1500/share (Rs. 1600 earlier) we roll forward our target PE multiple of 45x to its FY23E EPS.

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DiDi Chuxing Pre-IPO – Has a Principal Agent Problem, Rumoured Target Valuation Is a Stretch

By Sumeet Singh

DiDi Chuxing (DIDI US), the world’s largest mobility technology platform, aims to raise around US$10bn in its US listing. It is backed by Softbank Group (9984 JP) and Tencent (700 HK), along with other investors.

It is present in over 4,000 cities, counties and towns across 15 countries. As of twelve months ending (LTM) 1Q21, it had 493m annual active users and 15m drivers, who participated in 41m average daily transactions. It generated a gross transaction value of RMB341bn over LTM1Q21.  

We provided a brief background and financials overview in our previous note, DiDi Chuxing Pre-IPO – One of Asia’s Largest IPOs This Year – Tearsheet.

In this note, we will look at the financials and talk about the rumoured valuation.


Before it’s here, it’s on Smartkarma