In today’s briefing:
- StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.
- Solactive Global Lithium Index Rebalance: Passive Flows Next Week
- Quiddity Leaderboard BSE/SENSEX Jun25: Pair Trade Delivers Strong Alpha; More Pair Trade Ideas
- BYD (1211 HK) Positioning Ahead of Q1 2025 Results
- Shimano (7309) | Coasting, Not Sprinting
- Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook
- Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet
- Gruma SAB de CV – Actinver Research
- JAKK: 1Q Preview: Staring Into the Abyss; Reiterate Buy, PT
- GES: Snapping the Store: Beginning to Bloom; Reiterate Buy, $23 PT
StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.
- Negligible float, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
- Preceding my comments on the GMO group 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%.
Solactive Global Lithium Index Rebalance: Passive Flows Next Week
- Solactive has announced the review results for the Global Lithium Index. There are no constituent changes for the index but there will be capping changes for a few stocks.
- Estimated one-way turnover is 10.8% and will result in a round-trip trade of US$208m. There are some stocks with over 0.5x ADV to trade.
- The index has been in a secular downtrend over the last few years and there have been big redemptions from ETFs tracking the index.
Quiddity Leaderboard BSE/SENSEX Jun25: Pair Trade Delivers Strong Alpha; More Pair Trade Ideas
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, BSE 100, and BSE 200 indices in the June 2025 index rebal event.
- As things stand, there could be two index changes for the SENSEX index.
- There could be three ADDs/DELs for the BSE 100 index and eight ADDs/DELs for the BSE 200 index.
BYD (1211 HK) Positioning Ahead of Q1 2025 Results
- BYD (1211 HK) will release its Q1 2025 results on April 25. The company has issued a positive profit alert, projecting net income around RMB 8.5 – 10 billion.
- Expected earnings per share ranging from RMB 2.91 to RMB 3.42, up from RMB 1.57 in the same period last year.
- Our model currently does not indicate the stock is overbought, but a surprise pullback is always possible around earnings releases, so we will discuss also support/buy zones.
Shimano (7309) | Coasting, Not Sprinting
- Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.
- Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.
- Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management’s guidance ends up on the optimistic side.
Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook
- The most significant issue in the domestic tea industry is product standardization. This makes it difficult for tea companies to expand their market share and achieve economies of scale.
- Bama’s revenue growth showed an upward trend, but the growth rate is declining. There’re already signs of growth stagnation. High selling and marketing expenses will put pressure on profit margin.
- Lancang and Tenfu Caymans (6868 HK) are comparable peers. Due to larger market share/revenue scale and higher profit margin in 24Q1-Q3, we think Bama’s valuation should be higher than peers.
Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet
- Liuliu Orchard Group (LLO HK) (LOGCL) is planning to raise about US$100m in its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citic and Guoyuan.
- The company was established in 1999. It is one of the leading producers of plum-based products in China’s fruit snacks category.
- As per F&S Report, LOGCL ranked first in China’s fruit snacks industry by retail sales value, with a market share of 4.9% in 2024.
Gruma SAB de CV – Actinver Research
- Revenues of US$1.55 billion were 6% lower YoY, and below our estimates and consensus.
- Sales underperformed our estimates across all regions, with Gruma USA and Mexico posting contracting sales, on average -2.4% and the latter impacted by FX headwinds.
- Central America, on the other hand, posted solid healthy amid high demand, while Europe continues to benefit from its distribution strategy, and Australia offsets China’s performance.
JAKK: 1Q Preview: Staring Into the Abyss; Reiterate Buy, PT
- We are reiterating our Buy rating, projections and price target for JAKKS Pacific with the company announcing 1Q25 (March) results after the close on Wednesday.
- While we believe our 1Q projections reflected tariff conditions correctly, with April tariff levels increasing on goods from China to 125%, we are entering uncharted territory where, frankly, our current projections probably do not apply.
- We believe JAKKS Pacific management will have to rebuild their business model, which could entail higher pricing, deeper focus internationally (21% of 2024 sales), lower S,G&A and licensing spend and, longer term, shifting what can be shifted in terms of production from China, which currently accounts for virtually all product manufacturing.
GES: Snapping the Store: Beginning to Bloom; Reiterate Buy, $23 PT
- We are reiterating our Buy rating, projections and $23 price target for Guess?
- after visiting stores in Metropolitan New York City and Long Island.
- We believe, after a long period of shifts and upgrades, Guess?
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