In today’s briefing:
- Dongfeng Motor (489 HK): DFM’s Attractive Privatisation Offer
- HSCEI Index Rebalance: Pop Mart Pops Ahead of Double Index Inclusion
- DKSH Malaysia : 2nd Quarter Results
- Honda Motor Fights Back in China With EVs & Competitive Pricing Power; Too Little Too Late?
- KT&G: Increasing Probability of a Cigarette Price Hike in the Next 6-12 Months
- Guess Goes Private In $1.4 Billion Authentic Brands Deal — What It Means For Investors!
- Recent Stock Price Rise May Be Due to Expectation for Greater Shareholder Returns Rather than Growth
Dongfeng Motor (489 HK): DFM’s Attractive Privatisation Offer
- Dongfeng Motor (489 HK) disclosed a pre-conditional privatisation by merger by absorption by Dongfeng Motor Corporation, along with a proposed distribution and listing of VOYAH shares.
- The offer comprises HK$6.68 + 0.3552608 VOYAH H Shares per H Share, which is valued at HK$10.85 per H Share, a 81.7% premium to the last close price.
- The vote is low risk as the offer is attractive. It values the remaining business at a premium multiple, and the appraised value of HK$11.735 per VOYAH share is conservative.
HSCEI Index Rebalance: Pop Mart Pops Ahead of Double Index Inclusion
- As forecast, Pop Mart (9992 HK) will replace J&T Global Express (1519 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 5 September.
- Estimated one-way turnover at the rebalance is 3% resulting in a round-trip trade of HK$4.8bn (US$612m). The final capping will use the close of trading on 2 September.
- Pop Mart is also being added to the Hang Seng Index (HSI INDEX) and that marks the end of inclusion in major indices for the stock.
DKSH Malaysia : 2nd Quarter Results
- Revenues are up 7% yony & down 10% qonq and net profits are down 10%
- Historically 2nd quarter is weak quarter as 1st quarter sales are influenced by festival seasons
- Reason for improvement in margin is higher raw material on own brands, increased labour cost and FX losses.
Honda Motor Fights Back in China With EVs & Competitive Pricing Power; Too Little Too Late?
- Honda Motor Company Limited’s recent financial results for the first fiscal quarter of 2025 and forecasts for the entire year reveal various factors influencing the company’s performance.
- The operating profit for Q1 was JPY 244.1 billion, a significant decline compared to the same period last year, impacted by several nonrecurring expenses related to electric vehicles (EVs) and tariffs.
- Despite challenges, notably in the automobile segment with operating losses, the company revised its full-year forecast upward, anticipating an operating profit of JPY 700 billion — a JPY 200 billion increase from previous projections.
KT&G: Increasing Probability of a Cigarette Price Hike in the Next 6-12 Months
- A cigarette price hike has been long overdue in Korea. The last time there was cigarette price hike in Korea was more than 10 years ago.
- We believe that the Korean government could raise cigarette prices to about 7,000 won to 8,000 won per pack from current price of 4,500 won in the next 6-12 months.
- Raising cigarette prices could improve the sharp shortfall in government tax revenues.
Guess Goes Private In $1.4 Billion Authentic Brands Deal — What It Means For Investors!
- Guess?
- Inc. has announced it will go private in a $1.4 billion transaction with Authentic Brands Group, marking a pivotal moment in the denim retailer’s four-decade history.
- The buyout, which offers shareholders $16.75 per share in cash—a 26% premium to the closing stock price on the day prior to the announcement—signals a new chapter for the company amid operational headwinds and evolving consumer behavior.
Recent Stock Price Rise May Be Due to Expectation for Greater Shareholder Returns Rather than Growth
- P/B was highly correlated with P/E, so it’ll be effective for individual companies to announce/implement measures to increase EPS or profits in order to attract the attention of overseas investors.
- From April 2022 to June 2025, overseas investors have been focusing on companies with significant potential for shareholder returns, as the TOPIX has the highest correlation with BPS.
- The recent rise in stock prices may be due to expectations for increased shareholder returns rather than growth expectations, as EPS and BPS have risen while P/B and P/E haven’t.
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