In today’s briefing:
- GoTo Gojek Tokopedia (GOTO IJ) – Barbell Strategies and Fintech to Dominate in 2025
- Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done
- There Are Still Very Many Companies with High Cash on Hand Relative to Sales
- RPSG Ventures (RPSGV): BPO Business Has Normalized | FMCG Business Is Scaling Up
- Last Week in Event SPACE: Honda, Shanghai Henlius, Exedy, Arcadium Lithium
- Lithia Motors: Product Diversity & Pricing Strategy As A Strategic Growth Enabler! – Major Drivers
- Autoliv Inc.: An Analysis Of Its Cost Efficiencies and Structural Initiatives! – Major Drivers
- Global Business Travel Group (GTB): Will Its Technological Innovations & Automation Be A Breakthrough Move? – Major Drivers
- Monthly Chinese Tourism Tracker | Outbound, Domestic Both Solid | TCOM: 2024’s Best (December 2024)
GoTo Gojek Tokopedia (GOTO IJ) – Barbell Strategies and Fintech to Dominate in 2025
- GoTo Gojek Tokopedia remains optimistic for the coming year, with increasing focus on converting hemat users to take up more premium products and it expands its suite of fintech offerings.
- Focus on profitability will remain core, with an emphasis on product-led initiatives such as GoFood Plus and GoFood Express, and increasing emphasis on growing its fintech offering across products.
- GoTo is increasingly using AI to improve both the customer experience and improve efficiencies. Advertising will increasingly become a tool to improve take rates with Tokopedia providing valuable cash flow.
Vesync (2148 HK): The Yang Family’s Scheme Offer Is Light but Likely Done
- Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60, a 33.3% premium to the last close price of HK$4.20. The offer is final.
- While the offer is marginally above the IPO price, it is light compared to sell-side price targets, peer multiples and historical trading ranges.
- Nevertheless, the scrip option, irrevocables and no disinterested shareholder holding a blocking stake facilitate the scheme vote. The offer could be completed by May.
There Are Still Very Many Companies with High Cash on Hand Relative to Sales
- Of course, it’s desirable to be able to use cash to find effective investments, but it is important to return cash on hand with an immediate impact on ROE improvement.
- Looking at all listed companies, there are a great many companies that have a large amount of cash on hand relative to sales.
- Denso’s measures to reduce policy shareholdings plus share buybacks will directly improve ROE, even if the background was a desire to stem the rise in foreign shareholdings.
RPSG Ventures (RPSGV): BPO Business Has Normalized | FMCG Business Is Scaling Up
- The FMCG business continues to sustain annualized revenue of INR 500cr+ and with Q2FY25 revenue at INR 146cr, it is possible that annualized revenue may now sustain at INR 550cr+.
- After having bottomed out a couple of quarters ago, the BPO business – Firstsource Solutions (“FSL”), is now performing strong with 6.9% QoQ and 22.7% YoY growth in revenue.
- Revenue in the Sports business varies significantly each quarter based on scheduling of the sports events. Accordingly, in Q2FY25, revenues were not significant at INR 20cr.
Last Week in Event SPACE: Honda, Shanghai Henlius, Exedy, Arcadium Lithium
- Honda (7267 JP) announced a HUGE ¥1.1trln buyback. At ~¥1500/share, this would increase EPS by 17+%. Buy the shares in the low ¥1,400s. Expect this to be a range trade.
- Shanghai Henlius Biotech (2696 HK)‘s Circular is now out. Hoome straight and done deal.
- Murakami-San has started selling Exedy Corp (7278 JP), earlier than expected. Best to get out first, ask questions later.
Lithia Motors: Product Diversity & Pricing Strategy As A Strategic Growth Enabler! – Major Drivers
- Lithia Motors, a significant player in the automotive retail sector, reported its financial results for the third quarter of 2024, showcasing both strengths and challenges.
- The company’s revenue for the quarter reached a record $9.2 billion, representing an impressive 11% increase from the same period last year.
- This growth was attributed to strategic expansions, improvements in cost efficiencies, and operational execution.
Autoliv Inc.: An Analysis Of Its Cost Efficiencies and Structural Initiatives! – Major Drivers
- Autoliv, Inc.’s recent financial performance in the third quarter of 2024 presents a mixed view of the company’s standing and market strategies.
- The company demonstrated resilience amidst declining global light vehicle production, maintaining stable earnings and effectively managing cost reductions.
- Autoliv outperformed the broader market, surpassing light vehicle production by four percentage points, an achievement attributed to its diverse product portfolio and robust customer relationships.
Global Business Travel Group (GTB): Will Its Technological Innovations & Automation Be A Breakthrough Move? – Major Drivers
- American Express Global Business Travel (GBT) demonstrated strong financial performance in the third quarter of 2024.
- The company experienced growth in demand for its offerings and managed to significantly increase its adjusted EBITDA by 23% to $118 million, with a notable margin expansion of 300 basis points.
- This margin growth was supported by a focused approach on cost management and by leveraging operating efficiencies.
Monthly Chinese Tourism Tracker | Outbound, Domestic Both Solid | TCOM: 2024’s Best (December 2024)
- Almost two years into China’s travel recovery, November outbound activity grew strongly
- Domestic air travel demand also showed solid growth, has accelerated since Spring ’24
- Trip.com best performing stock in this group in ’24, but it no longer offers much value
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