In today’s briefing:
- GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- [Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- BYD (1211 HK): Sales Volume Slowing Down in 2Q25, But Competitors Facing Cash Flow Stress
- Travel Food Services IPO Trading – Decent Anchor; Subdued Overall Demand
- Meituan (3690): Full Round-Trip, Surge in Call Volumes Provide Strong Trade Setup
- DD Group (3073 JP): Polaris Capital-Sponsored MBO Is Light
- Hikari Tsushin’s Portfolio
- BYD (1211 HK) Outlook Under Pressure as Sales Momentum Fades
- Merger and Acquisition Updates: GLXZ, OCFT, ASLI:L, and CPPTL’s Strategic Developments
- Pre-IPO Busy Ming Group – Concerns Behind the High Growth
GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
- GMO Internet (4784 JP) was squeezed after a merger which was a Reverse Takeover followed by a ridiculous TOPIX inclusion. Then the parent tried an offering, which failed.
- The clearing price demanded was WAAAY lower so the offering was pulled. Shares fell 70%, then bounced 65%. Now 48x book and 66x EBITDA for an ISP. Super expensive. Manipulated.
- ParentCo needs to sell 90mm shares ASAP. The only clean way is through a liquidation trust to get shares lower before a larger offering.
[Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
- Diamond Dining (3073 JP) (DD Group) head Matsumura-san appears to be getting out in this Polaris MBO for the dining group.
- The premium is low, and the the price is probably light, but there are a couple of small things which mean it isn’t quite as light as it might look.
- But the company prints cash, so yeah, it’s light. This should probably be a bit better, but F&B is a fickle business.
BYD (1211 HK): Sales Volume Slowing Down in 2Q25, But Competitors Facing Cash Flow Stress
- The sales volume growth rate slowed down month by month in 2Q25.
- The domestic sales volume was stagnant in 2Q25 and decreased YoY from March to June.
- However, competitors expanded aggressively; therefore, we believe small ones may go bankrupt.
Travel Food Services IPO Trading – Decent Anchor; Subdued Overall Demand
- Travel Food Services Ltd (1450229D IN) raised about US$233m in its India IPO.
- Travel Food Services Limited (TFS) operates a network of travel quick service restaurants (Travel QSRs) and private lounges in airports.
- We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.
Meituan (3690): Full Round-Trip, Surge in Call Volumes Provide Strong Trade Setup
- Meituan has completed a full roundtrip from its 2024 rally and is now back near key support.
- Option traders have taken notice, with a notable pickup in activity—especially for Calls.
- We outline two trade structures depending on directional or vol views.
DD Group (3073 JP): Polaris Capital-Sponsored MBO Is Light
- Diamond Dining (3073 JP) has recommended a Polaris Capital-sponsored MBO at JPY1,700, a 17.8% premium to the last close price.
- The offer is light and is 16% below the midpoint of the IFA DCF valuation range. The process was lacking as there was no auction.
- DD has no recent history of activism. Therefore, the likelihood of a bump is low unless there is vocal opposition or an activist becomes a substantial shareholder.
Hikari Tsushin’s Portfolio
This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu Shigeta
It’s been much talked about on Twitter and Substack, but few of the write-ups discuss Hikari Tsushin’s portfolio of publicly listed equities
I am personally not particularly interested in Hikari Tsushin itself, as it is primarily a sales organization helping other businesses find customers
BYD (1211 HK) Outlook Under Pressure as Sales Momentum Fades
- BYD (1211 HK) fell for longer than expected since our last insight was published. We said that if BYD was going to fall below 120, the trend would become bearish.
- The stock did not fall a lot, it briefly reached below our 120 support level (75% probability of reversal), but has been down for 5 weeks. It is oversold.
- The big question now is: can BYD recover and start to trend up again? Or are we going to see a small bounce from oversold levels, followed by lower prices?
Merger and Acquisition Updates: GLXZ, OCFT, ASLI:L, and CPPTL’s Strategic Developments
- Galaxy Gaming (GLXZ) merger with Evolution AB is pending gaming regulatory review, with a 14% spread remaining.
- OneConnect Financial Technology (OCFT) secured antitrust approval from SAMR for Ping An takeover, narrowing spread to 5%.
- abrdn European Logistics Income (ASLI:L) sold two warehouses at a premium, with further asset sales in advanced discussions.
Pre-IPO Busy Ming Group – Concerns Behind the High Growth
- BUSY MING operates under the franchise model, under which franchisees and BUSY MING form collaboration and a virtuous cycle, benefiting from the ecological logic of high turnover.
- However, the potential risk is increasing homogeneous competition. Price wars and competitors’ rapid expansion would further squeeze the profit margin of BUSY MING and lead to market oversaturation.
- The current high growth may not sustain.BUSY MING clearly hopes to successfully IPO during the current peak period of performance, but investors may face a decline in performance after IPO.
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