In today’s briefing:
- Mandarin Oriental (MAND SP): Jardine Matheson’s Attractive Scheme Offer
- Why Shiseido (4911) Never Worked as a Turnaround Stock
- Mandarin Oriental: Good Deal for Jardine, Not So Much for Mandarin Oriental Minorities
- Can H&M Group Balance Tariffs, Technology, & Trend Cycles to Stay on Top of Fast Fashion?
- Estée Lauder Considers Offloading ‘Too Faced’—And Investors Are Watching!
- China Healthcare Weekly (Oct.19)-Bubble of HK Biotech Is Bursting, Ping An Good Doctor Is Overvalued
Mandarin Oriental (MAND SP): Jardine Matheson’s Attractive Scheme Offer
- Mandarin Oriental International (MAND SP) disclosed a privatisation offer from Jardine Matheson Holdings (JM SP) at US$3.35 (US$2.75 cash + US$0.60 special dividend), a 39.6% premium to the last close.
- The special dividend represents the majority of the proceeds from the sale of the top thirteen floors of One Causeway Bay (OCB) to Alibaba and Ant Group for US$925 million.
- The offer is final. The scheme is conditional on the completion of the OCB sale and Mandarin shareholder approval. This is a done deal due to an attractive offer.
Why Shiseido (4911) Never Worked as a Turnaround Stock
- Shiseido’s share price dropped 70% over the past six years, compared to a 110% gain by Topix, but the stock just crossed its 200-day MAV. Time for another look?
- In our view, the stock lacks most of the required criteria for a successful turnaround, and reeks of all the important criteria for failure.
- Shiseido’s stock already prices in a 50% earnings recovery. To be compelling, the forecast needs to be 4 standard deviations above the mean, or the price needs to decline 30%.
Mandarin Oriental: Good Deal for Jardine, Not So Much for Mandarin Oriental Minorities
- Jardine Matheson Holdings (JM SP) has proposed to take Mandarin Oriental International (MAND SP) private
- While the deal has a high chance of success, given the 88% ownership of MAND by JM, it undervalues Mandarin Oriental significantly.
- Jardine is effectively paying for the fair value of One Causeway building and is getting global hotel operations for a bargain price.
Can H&M Group Balance Tariffs, Technology, & Trend Cycles to Stay on Top of Fast Fashion?
- The H&M Hennes & Mauritz AB Group’s earnings report for the third quarter of 2025 presents both promising advancements and ongoing challenges typical of the fashion retail industry in a dynamic global market.
- The company recorded a 2% sales growth in local currencies despite reducing its store count by 4% from the previous year.
- This growth was supported by improvements in their digital platform, indicating successful digital transformation efforts that are resonating well with customers worldwide.
Estée Lauder Considers Offloading ‘Too Faced’—And Investors Are Watching!
- Estée Lauder Companies is reportedly exploring a divestiture of its cosmetics brand Too Faced, according to a recent Axios Pro report.
- Acquired in 2016 for $1.45 billion, Too Faced was once seen as a critical pillar of Estée’s efforts to appeal to younger, trend-conscious consumers through multibrand retailers like Sephora and Ulta.
- However, performance in the color cosmetics category has lagged, especially following pandemic-related disruptions and intensifying competition from newer indie entrants.
China Healthcare Weekly (Oct.19)-Bubble of HK Biotech Is Bursting, Ping An Good Doctor Is Overvalued
- The “turning point” occurs as share price of innovative drug sector is pulling back. Many companies would see valuations halved – potentially more than once.The decline is far from over.
- The current main goal of biotech is to turn losses into profits ASAP. If it fails to make a profit, it may not be recognized by the market.
- Due to the concerns on Ping An Healthcare and Technology (1833 HK)’s business model, peak revenue scale could be just RMB8 billion. In other words, Ping An Healthcare is overvalued.
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