In today’s briefing:
- Fast Retailing (9983) | Japan Delivers as Tariffs Start to Impact
- Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
- Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- Chagee Holdings IPO Valuation Analysis
- Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume
- [BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise
- Sonos Inc.: Product Innovation & Market Expansion Is The ONLY Way It Can Thrive!
- Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors
- Grocery Outlet: The Top 6 Influences on Its Performance for 2025 & The Future!
Fast Retailing (9983) | Japan Delivers as Tariffs Start to Impact
- Strong Q2 beat: Revenue rose 14% YoY and OP jumped 33%, driven by Japan strength and solid winter sales, offsetting China’s continued weakness.
- Guidance tweak: FY business profit raised to ¥540bn, though H2 expectations effectively lowered due to anticipated US tariff impact.
- US expansion continues: 69 stores now open; North America accounts for 7.5% of sales, with future margin mitigation via supply chain shifts and EU/Asia growth.
Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
- Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
- While Suzuki doesn’t have much direct exposure to the US markets, its shares had corrected in line with other auto players going into the deal launch.
- In this note, we compare the deal to some of the past deals and talk about the updates since our last note.
Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive.
- The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
- The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
- The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.
Chagee Holdings IPO Valuation Analysis
- Our base case valuation of Chagee Holdings is target price of $46.7 per share, representing 67% higher than the high end of the IPO price range ($28 per share).
- Our base case valuation is based on a P/E of 21.4x on our estimated net profit of 2.9 billion RMB in 2025.
- We used a very conservative valuation multiple, mainly due to the extremely high macro risks related to the ongoing tariff dispute between China and the United States.
Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume
- Components crossing US–Mexico–Canada corridor face disruption
- Reshoring production to US would involve multi-year lead times
- USTMA expects U.S. tire shipments of 340.4 million units in 2025
[BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise
- BYD reported C1Q25 net profit up 86%-119% YoY, with the midpoint exceeds our estimate/consensus by 12%/20%.
- We believe this driven by better ASP mix of its products, among other factors;
- We believe a possible China-EU deal on EV market access can be positive for BYD. We raise the TP to HK$400 and place BYD back to TOB BUY.
Sonos Inc.: Product Innovation & Market Expansion Is The ONLY Way It Can Thrive!
- Sonos, a prominent player in the home audio industry, recently shared its financial performance for the first fiscal quarter of 2025.
- The interim CEO, Tom Conrad, highlighted several strategic changes and challenges faced by the company.
- These insights provide a nuanced basis for evaluating the company’s future investment potential.
Exploring Strategic Reviews: Key Opportunities in Biopharma and Food Sectors
- Lifeway Foods (LWAY) faces a pending takeover by Danone, with a potential board overhaul and strategic acquisition synergies.
- Liquidia (LQDA) anticipates FDA approval for Yutrepia, challenging UTHR’s monopoly, with potential valuation gap closure post-commercialization.
- Sage Therapeutics (SAGE) received a buyout offer from Biogen, with ongoing strategic review and potential for increased offer price.
Grocery Outlet: The Top 6 Influences on Its Performance for 2025 & The Future!
- Grocery Outlet recently held its fourth quarter and full-year 2024 earnings call, highlighting several key outcomes and strategic initiatives.
- The performance in Q4 showed a net sales increase of 10.9%, reaching $1.1 billion, with comparable store sales climbing 2.9%.
- This growth was primarily driven by a 3% rise in customer visits, although the average basket size remained flat.
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