In today’s briefing:
- BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
- Skyworth (751 HK): Another Buyback
- Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
- The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution
- Chagee Holdings Limited (CHA): Peeking at the IPO Prospectus of China’s Premium Tea Brand
- TEGNA’s Bold Bet on AI & Automation To Expand Margins—Here’s What’s Coming Next!
- Quick Takeout Idea: Dalata Hotel (DHG.IR) – Probably Gets Sold Soon
- Mitra Adiperkasa (MAPI IJ) – Parting Clouds Ahead
- Installed Building Products’ (IBP) Aggressive Acquisition Spree Is Reinventing the Installation Industry!
- Exploring Active Portfolio Ideas: Company Sales, Strategic Reviews, Buyouts and More
BYD (1211 HK): God’s Eye & Potential HSTECH Index Inclusion
- BYD (1211 HK) raised US$5.6bn in a secondary offering a few weeks ago and the stock is trading a lot higher than the placement price.
- Buying from global index trackers is done, but there will be more passive buying from Hang Seng Index (HSI) and Hang Seng China Enterprises Index (HSCEI) trackers later this month.
- With the release of the God’s Eye advanced driver-assistance system (ADAS), the stock could be added to the Hang Seng TECH Index (HSTECH INDEX) in June, bringing more passive inflows.
Skyworth (751 HK): Another Buyback
- On 27 March, Skyworth Group Limited (751 HK) launched a conditional buyback to acquire a maximum of 350.0m shares (15.67% of outstanding) at HK$3.11, a 15.2% premium to undisturbed price.
- Unlike the previous buybacks, the controlling shareholder can vote. Therefore, while the buyback offer is unattractive, the shareholder vote will pass.
- Based on the irrevocables, a 100% share minority participation rate implies a minimum proration of 37.84%. The actual proration was around twice the minimum proration for the previous two.
Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
- Fast Retailing (9983 JP) is set to report its second-quarter results on April 10, and we see an opportunity to buy ahead of a strong earnings release
- We expect Fast Retailing to post Q2 sales of ¥905bn (+15% YoY), above consensus estimates of ¥881bn. EBIT projected at ¥133bn (+21% YoY), ahead of street expectations of ¥125bn.
- Domestic Uniqlo monthly sales and quarterly results from global peers suggest strong sales momentum.
The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution
- It’s unlikely that the transition to ‘company with audit committee’ will enhance the supervisory function, but it’s likely to speed up the decision-making process by delegating authority to executive directors.
- Instead of achieving 30% female board member and moving to Company with US-type 3 Committees at once, Toyota will implement Toyota’s way firmly with BOD that is half independent directors.
- The only way for Toyota, which faces several governance challenges, to uphold tradition of Toyoda family being at the top of management is to make the returns expected by investors.
Chagee Holdings Limited (CHA): Peeking at the IPO Prospectus of China’s Premium Tea Brand
- As of December 31, 2024, their network comprised 6,440 teahouses, including 6,284 located in China.
- Their net revenues increased by 844% to RMB4,640.2 million in 2023 from RMB491.7 million in 2022.
- We anticipate this company to set terms (share size, price range) and debut in the second half of April.
TEGNA’s Bold Bet on AI & Automation To Expand Margins—Here’s What’s Coming Next!
- TEGNA Inc. recently presented its fourth-quarter and full-year 2024 financial results, demonstrating both opportunities and challenges for potential investors.
- The company reported a significant 20% year-over-year increase in total revenue for the fourth quarter, amounting to $871 million, primarily driven by political advertising revenues.
- However, the political advertising performance nearly matched that of the 2020 election cycle, indicating the cyclical nature of this revenue stream.
Quick Takeout Idea: Dalata Hotel (DHG.IR) – Probably Gets Sold Soon
- Dalata Hotel recently announced a formal sales process. Last few days have been really busy ;ppp and I’ve been using time on the road to conjure my “tin-foil hat” hypotheses and squeezing out whatever spare time I have to eke out this article.
- Before going on, I’d like to highlight that amidst the market chaos, there seems to be a fair few interesting things popping – for e.g. last week, I highlighted DLTR selling off its FD stake and how DLTR deserved a rerating; in other news, Intel has also successfully divested its memory chip business (this time, IP and manpower) over to Sk Hynix, netting a ~1.9b cash infusion and also an indication of focus on its core “less-commoditized” logic chips business.
- Tan Lip Bu also finished acquiring his 25m worth of shares at ~$23.96 per share. Yet, INTC has traded down with the rest of its boys, as the semicon indices continually to get smacked downwards. Exciting times ahead.
Mitra Adiperkasa (MAPI IJ) – Parting Clouds Ahead
- Mitra Adiperkasa reported a solid finish to the year with positive sequential growth in 4Q2024, although it was impacted by the delayed iPhone 16 launch, which reduced its peak quarter.
- MAP Aktif Adiperkasa was the core growth driver, and its 4Q2024 was more seasonally strong at 28% of FY2024, with its regional expansion also helping to drive growth in FY2024.
- Mitra Adiperkasa remains a core retail proxy for Indonesia, with an increasing regional edge, and stronger growth prospects for FY2025. Valuations look extremely attractive on 9.9x FY2025E PER.
Installed Building Products’ (IBP) Aggressive Acquisition Spree Is Reinventing the Installation Industry!
- Installed Building Products reported mixed results for the fourth quarter and fiscal year 2024, reflecting both opportunities and challenges in its various segments.
- During the fiscal year, the company achieved record revenues and profitability, driven by organic growth across its residential markets and a series of acquisitions that expanded its geographic footprint.
- Positive aspects from the earnings discussion include the robust performance in the residential end markets, particularly in single-family and multifamily installations.
Exploring Active Portfolio Ideas: Company Sales, Strategic Reviews, Buyouts and More
- Lifeway Foods anticipates a sale to Danone, with AGM negotiations expected; SpringWorks Therapeutics in buyout talks with Merck KGaA.
- Sage Therapeutics rejected Biogen’s offer, initiating strategic review; Kronos Bio undergoes strategic review post-trial discontinuation.
- Microstrategy trades at NAV premium; OCI N.V. plans asset sales and dividends; Liquidia prepares for drug commercialization.
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