In today’s briefing:
- A/H Premium Tracker (To 15 Aug 2025): BIG Beautiful Skew Rampages Onward
- Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings
- Strategic Developments: LWAY’s Strong Q2, RTAC’s Decline, WOW Buyout, and Samsonite’s Dual Listing Plans
- Revision of Corporate Governance Code Will Support Dialogue Between Overseas Investors and Companies
- Sinclair’s Strategic Review Sends M&A Signals—Is A Mega Deal Coming?
- MercadoLibre Inc.: E-commerce Expansion & Free Shipping Strategy to Enhance Overall Value Proposition!
- Ingredion Incorporated: Geographic Market Strategy in LATAM to Further Enforce Their Competitive Edge!
- Magna International: Initiation Of Coverage- Strengthening Its Competitive Edge With Localization & Technological Flexibility!
- Church & Dwight: International Expansion & Market Penetration to Enhance Revenue Streams Outside of the U.S.!
A/H Premium Tracker (To 15 Aug 2025): BIG Beautiful Skew Rampages Onward
- HUGE, rampaging, “Beautiful Skew” continues. Enormous swings in H/A ratios in high AH premia names, materials, and non-bank finance.
- Last week’s short reco on China Merchants Bank H (3968 HK) fell 2.9% on the week, 2.2% from Monday close to Friday. AH premium fell a tick.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there free for SK readers.
Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings
- Sun Corp (6736 JP) is a clear value play. But it’s not as cheap to Cellebrite (CLBT US) as it was last month. The trade is a net long position
- As Swire Pacific (A) (19 HK) plumbs new 12-month lows for its NAV discount and implied stub, Swire’s B shares have significantly outperformed the As over the past month.
- Shandong Hi-Speed (412 HK) is a bubble. High shareholder concentration is still likely present, and the stock is getting squeezed. SHP is a short. Once it starts to turn.
Strategic Developments: LWAY’s Strong Q2, RTAC’s Decline, WOW Buyout, and Samsonite’s Dual Listing Plans
- Lifeway Foods’ Q2 results show 10% sales growth and 18% volume increase, enhancing leverage in Danone negotiations.
- Renatus Tactical Acquisition’s stock declined by 6% amid speculation on crypto treasury strategy, maintaining attractive risk-reward profile.
- WideOpenWest buyout concluded at $5.2/share, offering 65% premium to recent levels, despite undervaluation concerns.
Revision of Corporate Governance Code Will Support Dialogue Between Overseas Investors and Companies
- At June AGMs held by over 1,700 companies, out of 114 companies that received shareholder proposals, 7 were approved. The fact is that proposals aren’t approved without high foreign ownerships.
- At the end of March 2024, institutional investors’ shareholding surpassed the combined shareholding of corporate and financial institutions. Companies are expected to listen to the opinions of their shareholders.
- Although technical guidance from FSA and TSE is unlikely to directly lead to management improvements, it’s expected to serve as a basis for supporting dialogue between overseas investors and companies.
Sinclair’s Strategic Review Sends M&A Signals—Is A Mega Deal Coming?
- Sinclair Broadcast Group recently released its financial results for the second quarter of 2025, reporting a challenging quarter amid macroeconomic uncertainties, though they still managed to deliver results close to their target ranges.
- The company showed resilience through its extensive media and technology platform, with advertising revenue within expectations, and a year-over-year rise in core advertising revenue.
- However, expectations were tempered with distribution revenues not meeting projections due to slower subscriber growth in larger virtual MVPDs. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
MercadoLibre Inc.: E-commerce Expansion & Free Shipping Strategy to Enhance Overall Value Proposition!
- MercadoLibre reported solid performance for the second quarter of 2025, marked by a substantial revenue increase of over 30% year-on-year and record income from operations of $825 million.
- The company’s strategy to lower the free shipping threshold in Brazil for the third time in five years reflects its goal of increasing online retail by minimizing transaction barriers.
- This initiative reportedly attracted new users and enhanced engagement with existing ones, positively impacting gross merchandise value (GMV) growth, especially in June.
Ingredion Incorporated: Geographic Market Strategy in LATAM to Further Enforce Their Competitive Edge!
- Ingredion Incorporated reported its second-quarter results for 2025, showcasing mixed financial performance with both positive and negative aspects influencing its strategic outlook.
- The company achieved a historic milestone with an adjusted operating income of $273 million, marking its highest ever for a second quarter, bolstered by a 1% increase from the previous year and a 12% increase during the first half of 2025.
- However, net sales declined by 2% due to the pass-through of lower corn costs, highlighting some challenges in its operational efficiency and pricing strategy.
Magna International: Initiation Of Coverage- Strengthening Its Competitive Edge With Localization & Technological Flexibility!
- Magna International’s second quarter of 2025 results showcase a mixed performance across various financial metrics, amid ongoing industry challenges such as lower vehicle production in key markets and tariff impacts.
- The company managed to achieve a 1% increase in adjusted earnings before interest and taxes (EBIT) and a 20- basis-point improvement in EBIT margin, although sales decreased by 3% year-over-year to $10.6 billion.
- This contraction in sales was mainly attributed to weaker production dynamics in North America and Europe, declines in complete vehicle assembly volumes, and other operational adjustments.
Church & Dwight: International Expansion & Market Penetration to Enhance Revenue Streams Outside of the U.S.!
- The recent earnings report for Church & Dwight reveals a mixed performance in the second quarter of 2025, characterized by modest growth and strategic management actions.
- Organic sales registered a slight increase of 0.1%, slightly surpassing earlier expectations of a decline between 2% to flat sales.
- Adjusted EPS was $0.94, outperforming the anticipated $0.85, driven by stronger sales performance and resilient gross margins.
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