In today’s briefing:
- A/H Premium Tracker (To 1 Aug 2025): HUGE SOUTHBOUND Buying Helps Beautiful Skew but Premia Up
- Thai Union (TU TB): Mitsubishi Corp (8058 JP)’s Partial Tender
- HK Connect SOUTHBOUND Flows (To 1 Aug 2025); YUGE Net Buying on Weakness (FINANCIALS & HEALTHCARE)
- StubWorld: Indofood (INDF IJ) Trading Rich To Indofood CBP Sukses (ICBP IJ)
- Ferrari (RACE US): Deceleration in Q2 FY25, But Confident On Future Growth
- Laopu Gold (6181.HK) – The Business Model, the Concerns, the Valuation Outlook
- Lucror Analytics – Morning Views Asia
- Starbucks Turnaround Is ‘Ahead of Schedule’—But at What Cost?
- Lithia Motors Is Targeting $2-$4 billion In Annual Acquired Revenues But Can It Execute?
- Asbury Automotive Group: Technological Advancements with Tekion to Further Solidify Its Market Competitiveness!
A/H Premium Tracker (To 1 Aug 2025): HUGE SOUTHBOUND Buying Helps Beautiful Skew but Premia Up
- AH premia up, erasing the previous week’s gains for Hs. “Beautiful Skew” continues in negative overall performance.
- Last week I said “This is the most significant 60-day AH pair average H outperformance in five years, maybe ever. Remarkable.” This week it unwound some.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Thai Union (TU TB): Mitsubishi Corp (8058 JP)’s Partial Tender
- Mitsubishi Corp (8058 JP), currently holding 6.19% in Thai Union Group (TU TB), a global seafood leader, is seeking to lift its stake to 20% via a Partial Offer.
- Mitsubishi is offering THB12.50/share for 532.27mn shares in Thai Union, or 13.81% of shares out (excluding treasuries), an outlay of ~US$200mn. If <13.81% tender, the Offer lapses.
- Last month Mitsubishi expanded its salmon farming by acquiring additional businesses in Norway and Canada for ~US$1bn.
HK Connect SOUTHBOUND Flows (To 1 Aug 2025); YUGE Net Buying on Weakness (FINANCIALS & HEALTHCARE)
- Gross SOUTHBOUND volumes just under US$20+bn a day this past 5-day week. Second best in months. Net buying strong at just over +US$1.5bn a day.
- FINANCIALS and HEALTHCARE and now INFO TECH stand out as net buys as a % of volume. TELECOMS a net sell. Again.
- Hong Kong sharply underperformed mainland shares last week, SOUTHBOUND bought big, and despite higher AH Premia, Beautiful Skew continued.
StubWorld: Indofood (INDF IJ) Trading Rich To Indofood CBP Sukses (ICBP IJ)
- Indofood Sukses Makmur Tbk P (INDF IJ)‘s simple ratio (INDF/Indofood CBP Sukses (ICBP IJ)) is at a seven-year-plus high, and the implied stub a three-year high.
- Preceding my comments on the Indofood and First Pacific Co (142 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Ferrari (RACE US): Deceleration in Q2 FY25, But Confident On Future Growth
- Ferrari N.V. (RACE US) reported Q2 FY25 revenue and earnings growth of 4.4% and 3% (a slight miss on analysts’ estimates) due to increased tax rates and slower growth.
- Management is confident of meeting its conservative guidance for FY25, projecting baseline revenue and EPS growth of 5% and 2% YoY.
- The stock trades at 41.6x FY25 PE and 24x EV-EBITDA. Ferrari N.V. (RACE US) continues to maintain its unique pricing power position due to its loyal customer base.
Laopu Gold (6181.HK) – The Business Model, the Concerns, the Valuation Outlook
- The value of Laopu lies in its innovation in business model,successfully breaking away from the low-profit attribute of the industry by following the pricing and operation methods of luxury goods.
- However, Laopu cannot enjoy the valuation system of luxury brands because it cannot “escape” gold price cycle.So, when valuation of Laopu approaches that of luxury brands, it has overvaluation risks.
- Current valuation has priced in overseas expansion, which however isn’t a done deal.During upward cycle of gold prices,it’s easy to optimistically linearly extrapolate Laopu’s growth potential.Valuation faces downward revision risk
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Melco Resorts, Tata Motors, UPL Limited, Nissan Motor
- UST yields plunged on Friday, led by the front end, as the market repriced expectations for Fed easing following a weaker than expected nonfarm payrolls report. As of Friday, Fed-dated OIS were pricing in 61 bps of rate cuts over the next three meetings in 2025 (vs. 33 bps as of Thursday). The UST curve bull steepened aggressively, with the yield on the 2Y UST declining 28 bps to 3.68%, while the yield on the 10Y UST fell 16 bps to 4.22%.
- Equities retreated owing to the weak jobs numbers, continued tariff concerns, as well as after US President Donald Trump said the US was moving two nuclear submarines in response to “provocative” statements by former Russian president Dmitry Medvedev. The S&P 500 fell 1.6% to 6,238, while the Nasdaq was down 2.2% at 20,650.
Starbucks Turnaround Is ‘Ahead of Schedule’—But at What Cost?
- Starbucks Corporation’s latest quarterly results underscored both the urgency of its transformation efforts and the early signs of progress in key areas.
- For the fiscal third quarter, the company reported net revenue of $9.5 billion, yet same-store sales fell 2 percent globally—worse than the 1.5 percent decline analysts had anticipated—and earnings per share of $0.50 trailed the $0.65 consensus.
- In the United States, comparable sales also dipped 2 percent, reflecting the continued impact of a year-and-a-half streak of domestic store declines.
Lithia Motors Is Targeting $2-$4 billion In Annual Acquired Revenues But Can It Execute?
- Lithia & Driveway recently reported its second-quarter results for 2025, showcasing substantial growth and strategic moves impacting both their operational and financial trajectories.
- The company achieved a record revenue of $9.6 billion, reflecting a 4% increase in same-store sales compared to the previous year.
- This revenue growth, combined with operational enhancements, resulted in a 29% year-over-year increase in earnings per share (EPS).
Asbury Automotive Group: Technological Advancements with Tekion to Further Solidify Its Market Competitiveness!
- Asbury Automotive Group’s second quarter 2025 earnings report reveals a complex mix of positive performances and ongoing challenges.
- The company’s revenue reached $4.4 billion with a gross profit of $752 million, achieving a gross profit margin of 17.2%.
- A key highlight from the quarter was the successful acquisition of Herb Chambers Automotive Group, valued at approximately $1.45 billion, which expanded Asbury’s presence in the stable New England market.
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