In today’s briefing:
- BYD US$5.2bn Placement – Large Only in Absolute Size, past Deals Have Done Well
- BYD (1211 HK) Placement: Continuing to Power Up
- Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising
- JD.com (9618 HK) FY Earnings on 6 March: Divergence Between Option-Implied And Historic Move
- PointsBet (PBH AU): A Tussle Between MIXI (2121 JP) And Bluebet (BBT AU)
- MIXUE Group (2097 HK): What to Do Now?
- Chery Automobile IPO Preview
- Melco Resorts – Earnings Flash – FY 2024 Results – Lucror Analytics
- Genuine Parts Company: A Closer Look at Its Earnings Cadence & Market Conditions!
- Monthly Sales Overview of Indian Listed Tractor Firms – February 2025; Strong Show Continues
BYD US$5.2bn Placement – Large Only in Absolute Size, past Deals Have Done Well
- BYD (1211 HK) is looking to raise around US$5.2bn via selling 4% additional shares.
- The company has undertaken a few deals before and they have ended up performing well.
- In this note, we will talk about the placement and run the deal through our ECM framework.
BYD (1211 HK) Placement: Continuing to Power Up
- Overnight, BYD (1211 HK) has announced a placement of 118m shares at a price range of HK$333-345/share that could raise up to HK$40.7bn (US$5.2bn).
- The Pink Sheets listing for BYD (BYDDY.PK) closed at US$87.1/share and traded US$155m for the day. That close implies an open of HK$338.7/share for BYD, middle of the placement range.
- There will be passive buying from global index trackers later this week while buying from Hang Seng Index and Hang Seng China Enterprises Index trackers will come in April.
Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising
- Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty.
- Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
- This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.
JD.com (9618 HK) FY Earnings on 6 March: Divergence Between Option-Implied And Historic Move
- JD.com (9618 HK) upcoming Q4 and Full Year 2024 results announcement on 6 March historically triggers significant stock volatility, with full-year announcements causing 12-14% price movements.
- Options market pricing implies a 9.4% post-announcement move (up or down), which is less than previous full-year announcement reactions but nearly double the average quarterly announcement impact.
- Long Straddle positions break even at 9.2% price movements, appearing expensive compared to quarterly announcement history but potentially profitable based on full-year announcement patterns.
PointsBet (PBH AU): A Tussle Between MIXI (2121 JP) And Bluebet (BBT AU)
- On 26 February, PointsBet Holdings (PBH AU) entered a scheme implementation deed with Mixi Inc (2121 JP) at A$1.06, a 27.7% premium to the undisturbed price of A$0.83 (25 February).
- Subsequently, BlueBet Holdings (BBT AU) disclosed a competing non-binding cash-and-scrip offer worth a combined equity value of A$340-360 million or A$1.02-1.09 per PBT share.
- BlueBet has limited headroom to engage in a bidding war, particularly as its share price weakens. The share price already factors in a potential bump from Mixi.
MIXUE Group (2097 HK): What to Do Now?
- Mixue Group (2097 HK) has a successful IPO in Hong Kong, with share price surged 43.2%. We will trim from here and will not buy at the current level.
- Our forecasts call for a decent 20.8% and 17.6% earnings growth for FY25 and FY26, putting it on RICH PERs of 19.1x for FY25 and 16.3x for FY26.
- The Chinese tea sector has average PERs of 12.4x and 10.5x, suggesting MIXUE’s leadership is well reflected in the over 50% premium, and the safety margin has significantly narrowed.
Chery Automobile IPO Preview
- Chery Automobile is getting ready to complete an IPO in Hong Kong in the coming months. The company could raise up to US$1 billion in this IPO.
- Chery Auto is the second largest automaker in China and the 11th largest auto company globally. The valuation of Chery Auto could be more than 100 billion yuan (US$14 billion).
- Chery Auto has one of the best records among all the major auto companies globally in the past three years in terms of sales and net profit growth.
Melco Resorts – Earnings Flash – FY 2024 Results – Lucror Analytics
- Melco Resorts and Entertainment’s Q4/24 results remained soft, owing to a decline in the EBITDA margin, and despite GGR outperforming that of peers.
- In addition, the company’s debt reduction and deleveraging continued to lag peers, as FCF generation was constrained by the soft earnings, ongoing share repurchases, as well as capex requirements (including for the development project in Sri Lanka).
Genuine Parts Company: A Closer Look at Its Earnings Cadence & Market Conditions!
- Genuine Parts Company reported its financial performance for the fourth quarter and full year ending 2024, revealing a mixed set of results amidst challenging market conditions.
- The company’s total sales for 2024 were $23.5 billion, representing a growth of 1.7% compared to the previous year.
- This growth was bolstered by strategic acquisitions which contributed 260 basis points but was offset by weaker market conditions, particularly in the industrial segment.
Monthly Sales Overview of Indian Listed Tractor Firms – February 2025; Strong Show Continues
- Tractor volume continued to be strong in Feb’25.Favorable reservoir level,strong sowing for the Rabi season and government support are expected to drive good demand for tractors in the medium term.
- We summarize the sales volume published by listed players Mahindra & Mahindra (MM IN) and Escorts Kubota Limited (ESCORTS IN) in February 2025.
- Positive management commentary augurs well for uptick in tractor OEM stocks and related auto ancillary companies like GNA Axles Ltd (GNA IN) in medium term.
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