In today’s briefing:
- [Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation
- East Buy Holdings (1797 HK): Potential KWEB Deletion in June
- Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340
- [Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
- Toyota (7203 JP) Post-Earnings Outlook Amid ¥180B Estimated U.S. Tariff Cost
- Telegram from Srinagar | Operation Sindoor – On Ground Update
- D’Alba Global IPO Bookbuilding Results Analysis
- F&F: A Key Beneficiary of Explosive Popularity of Jung Hoo Lee (Grandson of the Wind) In the MLB
- Lucror Analytics – Morning Views Asia
[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
- Mitsubishi Shokuhin (7451 JP) was supposed to announce earnings at 2pm JST. They didn’t. Someone (or people) decided that meant there might be a takeover. There was.
- The stock popped nearly 15% to ¥6,200, paused, was flat for an hour, then popped again, closing at ¥6,150/share. Post-close, we get a deal at ¥6,340/share.
- A disappointing process. At ¥6,240, the Special Committee said it was “far from a standard that takes into account the interests of TargetCo’s minority shareholders.” At ¥6,340, they dealt. Aaaargh.
Laopu Gold (6181 HK): Heritage Luxury, Guochao Appeal. Key Facts, Financials & Valuation
- Laopu Gold (6181 HK) targets to raise approximately USD350 mn from a primary placement of 4.31 million new shares at HKD630 per share.
- Laopu Gold has delivered both superior margins and rapid growth by marrying cultural resonance, premium pricing, artisanal excellence, and outstanding store economics.
- Laopu’s growth track record coincides with period of rising gold prices. Investors should weigh its impressive margins and brand strength against the risk of a less supportive gold price environment.
East Buy Holdings (1797 HK): Potential KWEB Deletion in June
- East Buy Holding (1797 HK) was deleted from the Hang Seng TECH Index in March and could be deleted from the KraneShares CSI China Internet ETF (KWEB US) in June.
- There are other ETFs that track the same index (and similar indices), and those trackers will be selling East Buy Holding (1797 HK) too.
- There has been some short covering in the stock recently, but short interest is pretty high as a percentage of float. Watch out for short covering that offsets passive selling.
Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340
- Mitsubishi Shokuhin (7451 JP) has recommended a tender offer from Mitsubishi Corp (8058 JP) at JPY6,340 per share, a 17.2% premium to the undisturbed price.
- While the offer represents an all-time high, it is materially below the midpoint of the IFA DCF valuation range.
- The light offer resulted from an unusually long process, with twelve rounds of proposals. However, the shareholder structure suggests a done deal.
[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
- Large Tsuruha Holdings (3391 JP) investor Orbis Investments last month said they were against the Tsuruha/Welcia merger ratio. They wanted a cash takeover above Aeon’s Oasis buy price from 2024.
- Influential shareholder proxy advisor ISS has apparently come out recommending shareholders vote against. That’s a start, but the hard work needs to be Orbis talking to domestic passive managers.
- Getting 90% of foreign active managers as of end-February would make it a very close-run thing, but Orbis really needs some more to show up against the ratio.
Toyota (7203 JP) Post-Earnings Outlook Amid ¥180B Estimated U.S. Tariff Cost
- Toyota Motor (7203 JP) expects U.S. tariffs, material costs and a weak(er) dollar to dent profits. The automaker estimated the levies directly costing it 180 billion yen in April/May.
- The stock fell after the company reported its fiscal-fourth-quarter results on Thursday. Guidance for the coming year came in lower than expected, with tariffs taking a bite out of profits.
- In a previous insight we flagged the stock as overbought; those model targets remain valid. Here, we analyze updated support to gauge the pullback’s potential depth.
Telegram from Srinagar | Operation Sindoor – On Ground Update
- We interact with local business owners and our channels in Srinagar, Jammu and Kashmir with an objective to understand the current sentiment on the ground.
- Srinagar, Kashmir’s summer capital, remains strategically vital in the current conflict as a military hub and political flashpoint between India and Pakistan.
- Local business owners are hopeful that the escalating conflict and the media attention surrounding it will ease by the 10th of May.
D’Alba Global IPO Bookbuilding Results Analysis
- The IPO price of d’Alba Global has been finalized at 66,300 won which is at the high end of the IPO price range.
- The demand ratio of the IPO was 1,141 to 1. A 98.4% of the IPO shares applied thought that the value of the company is 66,300 won or more.
- Our base case valuation of d’Alba Global is a target price of 101,609 won per share, which represents 53% higher than the IPO price of 66,300 won.
F&F: A Key Beneficiary of Explosive Popularity of Jung Hoo Lee (Grandson of the Wind) In the MLB
- F&F is one of the key beneficiaries of the exploding popularity of Jung Hoo Lee in the MLB (Major League Baseball) in the United States.
- The surging popularity of Jung Hoo Lee could lead to higher demand for F&F’s core products (MLB baseball caps and apparel products), which could lead to higher sales and profits.
- F&F recently provided new shareholder return plans including providing at least 25% of net profit as dividends/buybacks/cancellations (including buyback at least 60 billion won from 2025 to 2027).
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Wynn Macau
- In the US, the FOMC has unanimously voted to maintain the Fed funds target rate at 4.25-4.50%, in line with market expectations. In its statement, the FOMC noted that “uncertainty about the economic outlook has increased further”, adding that “risks of higher unemployment and higher inflation have risen”.
- Still, officials noted that although swings in net exports have affected the data, recent indicators suggest that economic activity has continued expanding at a solid pace and labour market conditions have remained strong. Meanwhile, inflation is “somewhat elevated”.
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