In today’s briefing:
- Chery Automobile IPO: The Bear Case
- Weekly Deals Digest (07 Sep) – Pacific Industrial, Ashimori, Shibaura, Kangji Medical, Chery, Hesai
- [Japan M&A] Pacific Industrial (7250) The MBO Is Extended After Effissimo Buys Above Terms
- Shortlist of High Conviction Philippines Equity Ideas – September 2025
- Will Change to Annual Securities Report Improve in % of Female Managers and Gender Wage Gap?
- Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?
- SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%
- Weekly Update (CON, HNZ, BRSL)
Chery Automobile IPO: The Bear Case
- Chery Automobile (CH3456 CH), a Chinese automobile manufacturer, has secured HKEx listing approval for a US$1.5-2.0 billion IPO.
- In Chery Automobile IPO: The Bull Case, I highlighted the key elements of the bull case. In this note, I outline the bear case.
- The bear case rests on weakening trends of the primary business, gross margin pressure, declining contract liabilities and factoring of receivables.
Weekly Deals Digest (07 Sep) – Pacific Industrial, Ashimori, Shibaura, Kangji Medical, Chery, Hesai
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Chery Automobile (CH3456 CH) and Tata Capital Limited (TATACAP IN) IPOs. Hesai Group (HSAI US) H Share listing.
- Event-Driven developments: Pacific Industrial (7250 JP), Ashimori Industry (3526 JP), Shibaura Electronics (6957 JP), Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK), Johns Lyng (JLG AU), RPMGlobal.
[Japan M&A] Pacific Industrial (7250) The MBO Is Extended After Effissimo Buys Above Terms
- Activist-Ish-Y investor Effissimo reported Friday they had a 6.68% stake as of the end of August.
- Their average price is ¥2,253 which is 10% through the price the family Bidco was bidding (¥2,050).
- As this hasn’t traded below terms at any point since announcement, an extension was likely. This morning, we got one. We’ll get another one before it’s done, BUT…
Shortlist of High Conviction Philippines Equity Ideas – September 2025
- We are gradually building a high-conviction coverage of ideas for mid and small-cap companies in the Philippines.
- We established metrics focusing on high ROCE, sustainable growth of 10-15% YoY, robust balance sheets, and prudent capital allocation, essential elements for identifying potential multi-bagger opportunities.
- Read our updates on Philippines Exchange (PSE PM): IPO Pipeline to Cross 200 Bn (>142% YoY) Pesos For 2025, The Keepers Holdings (KEEPR PM), and Ginebra San Miguel (GSMI PM)
Will Change to Annual Securities Report Improve in % of Female Managers and Gender Wage Gap?
- Information regarding ％ of female managers and gender wage gap, which were previously required to be disclosed in annual securities reports, will move to the “Sustainability Philosophy and Initiatives” section.
- This change in description will make issues such as % of female managers and gender wage gap more clear, thereby improving the inconsistencies with the company’s goals and policies.
- Since disclosure of compensation incentives for employees other than board members will be required, this may encourage more companies to introduce compensation incentives for non-board members employees.
Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?
- The certainty of 2025 performance is actually high. 25H2 performance is expected to be better than that in 25H1. Our forecast is net profit to reach RMB10 billion in 2025.
- The concern is Pop Mart may face the sustainability problem of performance under the high base of 2025 starting from 2026. If consumers develop aesthetic fatigue towards LABUBU, performance would decline.
- In a neutral situation, 30-35x P/E is a comfortable range.Valuation upside depends more on the sustainability of THE MONSTERS popularity and whether the popularity of other IPs can exceed expectations.
SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%
- Postal parcel volume bound for the US fell -81% after exemption ended Aug 29
- In many cases, logistics providers unwilling to manage US Customs process
- We believe the change undermines US model used by SHEIN, Temu, AliExpress
Weekly Update (CON, HNZ, BRSL)
- On September 2, 2025, Kraft Heinz (KHC) announced that it will be breaking up into two companies.
- The news comes a decade after the infamous merger of two of the biggest names in packaged foods that was orchestrated by Warren Buffett and Brazilian private equity firm 3G Capital Partners.
- North American Grocery Co would encompass many of the traditional Kraft products.
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