In today’s briefing:
- Chagee Holdings Limited (CHA): Chinese Tea Company Moves Forward with IPO Despite Macro Risks
- Chagee IPO: Trading at a Discount to Peers but with Geopolitical Overhang
- Suzuki Motor (7269 JP): The Current Playbook
- Harley-Davidson Is Losing Speed: Will A New CEO Fix The Sales Slump Amid Tariff Turmoil?
- Capri Unstitched: A Versace Sale Could Unlock Value for CPRI
- Compass Group: Initiation of Coverage
- Yoshinoya Holdings (9861 JP): Full-year FY02/25 flash update
- Fast Retailing (9983 JP) Profit Targets After Q2 Results
- Levi Strauss Rides DTC Momentum—But Will Tariffs Dent the Denim Giant?
- Aeon Fantasy (4343 JP): Full-year FY02/25 flash update
Chagee Holdings Limited (CHA): Chinese Tea Company Moves Forward with IPO Despite Macro Risks
- Chinese Tea Company is moving ahead with the IPO despite heavy Macro-Economic winds.
- The company is seeking up to $412m with a high-end pricing and already includes $205m worth of buying on the cover of the prospectus.
- There are. more questions than answers regarding this IPO due to the current uncertainty in the market.
Chagee IPO: Trading at a Discount to Peers but with Geopolitical Overhang
- Chagee Holdings (CHA US) is looking to raise up to US$411m in its upcoming US IPO.
- It is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
- We have looked at the company’s past performance and provided our initial thoughts on valuations. In this note, we talk about the IPO pricing.
Suzuki Motor (7269 JP): The Current Playbook
- Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
- It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki’s share performance is the joint best among recent large placements.
- However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.
Harley-Davidson Is Losing Speed: Will A New CEO Fix The Sales Slump Amid Tariff Turmoil?
- Harley-Davidson is navigating a critical crossroads as it searches for a new CEO to replace Jochen Zeitz, who recently announced plans to retire after five years at the helm.
- This leadership transition comes at a precarious time for the iconic motorcycle brand, which is grappling with a sustained decline in sales, intensifying macroeconomic pressures, and the looming threat of retaliatory tariffs—particularly from the European Union.
- In 2024, global retail sales dropped by 7%, with international sales falling a steep 13%, reflecting a broader downturn in discretionary spending.
Capri Unstitched: A Versace Sale Could Unlock Value for CPRI
- Capri Holdings’ sale of Versace to Prada removes a structurally weak asset, shifting its balance sheet from net debt to net cash, simplifying its brand portfolio for sharper strategic focus.
- Post-Transaction, Capri trades at just 4.4x EBITDA despite becoming a leaner, debt-free luxury group with two globally recognized brands — a setup primed for significant multiple expansion and investor re-rating.
- A sum-of-the-parts valuation excluding Versace suggests Capri’s fair value is $30–33 per share, offering investors over 100% upside as the company pivots from portfolio fixer-upper to focused luxury contender.
Compass Group: Initiation of Coverage
- Compass Group PLC has released its full-year 2024 financial results, showcasing a strong performance with a 16% increase in operating profit and an 11% growth in organic revenue.
- The company reported a margin progression of 30 basis points, taking it to 7.1%.
- This has been complemented by a net new business growth of 4.2%, further gaining momentum in the second half of the year.
Yoshinoya Holdings (9861 JP): Full-year FY02/25 flash update
- Consolidated sales reached JPY205.0bn (+9.3% YoY), with operating profit at JPY7.3bn (-8.4% YoY) and net income JPY3.8bn (-32.1% YoY).
- The company forecasts FY02/26 sales at JPY225.0bn (+9.8% YoY), with operating profit expected to rise 1.3% YoY.
- The company achieved JPY187.5bn sales in FY02/24, surpassing its JPY180.0bn target, due to agile menu price revisions.
Fast Retailing (9983 JP) Profit Targets After Q2 Results
- Mark Chadwick highlighted Fast Retailing (9983 JP) ‘s outlook in 2 recent insights, before and after Q2 earnings: his DCF model for this stock suggests roughly a +13% upside.
- This week the stock rallied from the crash at the start of the week, closing a bit higher than the previous week (it had closed 1 week down, CC=-1).
- Assuming the stock may rally further from here, pushed by good Q2 results, let’s have a look to our model to analyze some profit targets.
Levi Strauss Rides DTC Momentum—But Will Tariffs Dent the Denim Giant?
- Levi Strauss & Co. reported strong first-quarter fiscal 2025 results, exhibiting growth across key financial metrics amidst a challenging macroeconomic environment.
- The company’s strategic shift towards a Direct-to-Consumer (DTC) model has begun to bear fruit, as evidenced by a 9% increase in organic net revenue, primarily driven by a 12% rise in DTC sales.
- These results showcase the impact of successful new store openings, positive comparable growth, and robust e-commerce performance.
Aeon Fantasy (4343 JP): Full-year FY02/25 flash update
- FY02/25 sales increased by 6.7% YoY, with operating profit up 21.2% YoY, but recurring profit declined 23.4% YoY.
- FY02/26 forecasts sales of JPY92.2bn (+5.7% YoY), operating profit of JPY7.3bn (+68.0% YoY), and net income of JPY2.5bn.
- The company plans to open new facility formats and expand in regional cities, focusing on profitability and efficiency.
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