In today’s briefing:
- MIXUE IPO – Decent Cornerstone, past Sentiment Overhang
- MIXUE Group (2097 HK) IPO: The Bull Case
- StubWorld: REA Group Dives As CoStar Muscles Into Turf
- Mixue Group IPO: Value For Money Pricing and Attractive Valuations
- Not Promptly Retiring Treasury Stock Has Increased the Market Cap of Japanese-Style Calculations
- World Buys Mitsubishi Clothing Business
- Allied Blenders & Distillers Ltd Q3FY25 Update: Volume Growth, Premiumization
- LCI Industries Fights Back Against Tariffs – Can They Survive The Trade War?
- KOSPI 200 – Upcoming BOK Rate Decision: Navigating Market Moves and Profit Opportunities
- JAKK: 4Q Review: Solid Q, Dividend Catalysts for 2025; Reiterate Buy, $40 PT
MIXUE IPO – Decent Cornerstone, past Sentiment Overhang
- Mixue Group is now looking to raise around US$450m in its upcoming Hong Kong IPO.
- MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
- We have covered various aspects of the deal in our previous notes. In this note, we will talk about the IPO pricing.
MIXUE Group (2097 HK) IPO: The Bull Case
- Mixue Group (MIX HK), a world-leading manufacturer of freshly made drinks, is seeking to raise US$445 million through an HKEx IPO.
- According to CIC, Mixue is the largest freshly made drinks company in China and worldwide, according to the number of stores as of September 30, 2024.
- The bull case rests on a strong brand, leading market share, peer-leading revenue growth, top-tier profitability and cash generation.
StubWorld: REA Group Dives As CoStar Muscles Into Turf
- A double dose of StubWorld this week: REA Group Ltd (REA AU)‘s rolls over as CoStar Group (CSGP US) bets big on key rival Domain Holdings Australia (DHG AU).
- Preceding my comments on REA and News Corp (NWSA US) 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%.
Mixue Group IPO: Value For Money Pricing and Attractive Valuations
- Mixue Group (MIX HK) is offering 17.06 million shares at HK$202.50 apiece to raise HK$3.45 billion ($444 million) in its initial public offering in Hong Kong
- Mixue’s IPO was launched today morning and will close on Wednesday 26th February. The stock is due to list on HK bourses on 3rd March.
- Mixue, China’s value-for-money freshly made beverage leader, has priced its IPO shares attractively given its robust growth track record and long term competitive strengths.
Not Promptly Retiring Treasury Stock Has Increased the Market Cap of Japanese-Style Calculations
- The fact that few companies promptly retire treasury stock is the reason for the large gap between market capitalization including treasury stock and market capitalization calculated without including treasury stock.
- It’s odd that EV/EBITDA of a company will be smaller after cancelling treasury shares than before, but this shouldn’t be too much trouble for institutional investors who analyze it closely.
- Although this gap may widen for more companies as more cross-shareholdings will be bought back with treasury stock, the increase in share repurchases is a favorable development.
World Buys Mitsubishi Clothing Business
- World may finally have found the key to real growth after years of trying to build a fashion retail business in shopping centres, but with limited success.
- The big problem was that it didn’t have the supply chain skills to compete with the big retailers like Uniqlo and Adastria.
- Buying the supplier that helped grow those same chains means World now has a real chance to enter the big leagues.
Allied Blenders & Distillers Ltd Q3FY25 Update: Volume Growth, Premiumization
- Allied Blenders & Distillers (9844250Z IN) ‘s Q3 FY25 results showed robust growth in revenue at Rs. 2,346 crores (up 15.5% sequentially, 12.9% YoY) and strong premiumisation with expanded export reach.
- Enhanced margins driven by effective cost optimization and profitable state brand mix highlight ABDL’s resilience and ability to capture premium market trends, strengthening its competitive position in India’s spirits industry.
- The company aims to grow the aggregate market share of its four millionaire brands and consolidate its position in the P&A whisky segment through its three millionaire brands
LCI Industries Fights Back Against Tariffs – Can They Survive The Trade War?
- LCI Industries reported a stabilized financial performance amidst tough market conditions in the RV and marine industries.
- For the full year 2024, the company reported revenues of $3.7 billion, a slight decrease of 1% compared to the previous year.
- Despite headwinds, including a challenging RV and marine market, LCI Industries managed to achieve this minimal decline owing to its diversified business model.
KOSPI 200 – Upcoming BOK Rate Decision: Navigating Market Moves and Profit Opportunities
- The Bank of Korea is expected to cut interest rates to 2.75% on 25 February 2025. The decision, however, is not expected to be unanimous and some analysts argue against.
- Historical data from 120 BoK announcements and subsequent moves in the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) is examined.
- Options market pricing seems to lean toward a “surprise and no-change” outcome. Traders can seek opportunities with short straddles or long puts depending on anticipated outcomes.
JAKK: 4Q Review: Solid Q, Dividend Catalysts for 2025; Reiterate Buy, $40 PT
- We are reiterating our Buy rating and $40 price target for JAKKS Pacific after the company announced slightly below consensus 4Q24 results, launched a $1.00 annual dividend per share program, and remained confident in their ability to drive solid results, even in the face of tariffs and economic uncertainty.
- We believe, with continued strong licensed products, easy comparisons (especially in 1H25) and upside drivers in international, expansion into the sporting goods channel with Authentic Brands Group (“ABG”) seasonal offerings, The Simpsons and further private label expansion, momentum will remain strong at JAKKS.
- Now with a compelling dividend and a valuation of 4.6X our 2026 EBITDA projection, we believe the risk/reward in JAKK remains compelling, and we reiterate our Buy rating and $40 price target.
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