In today’s briefing:
- Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds
- TSI Holdings (3608) – YET ANOTHER Big Buyback, Still Good, Still Cheap, But B/S Restructuring Slow
- Netease Cloud Music (9899 HK): Stock Up; Short Interest Up; Global Index Inclusion
- Vishal Mega Mart (VMM IN): Increased Float & Global Index Inclusion
- DFI Retail (DFI SP): Up 90% in a Year + Special Dividend. Cash Out or Hold Tight?
- [JD.com, Inc (JD US, SELL, TP US$24) TP Change]: C2Q25 Preview: Near Term Loss Pressure Imminent
- The Bunny Returns: Playboy’s Market Comeback
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – July 2025
- Pre-IPO Boxihe Outdoor Sports Group – The Concerns Behind the High Growth
- Omnicom Group: An Analysis Of Its Adjusted Client Investments, Brand Focus & Key Growth Catalysts!
Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds
- Since unwinding the Naspers (NPN SJ)/Prosus (PRX NA) circularity, Prosus has been selling Tencent shares, and buying back its share. Separately, Tencent is buying its shares to offset Prosus’ selling.
- Prosus’ stake in Tencent has now edged below 23%, a little over seven months since dipping below 24%.
- On an implied stub and relative value, Prosus is elevated to Tencent, suggesting an unwinding of the stub.
TSI Holdings (3608) – YET ANOTHER Big Buyback, Still Good, Still Cheap, But B/S Restructuring Slow
- A bit over three years ago I re-wrote on Tsi Holdings (3608 JP). Then? EV/Revenue and EV/EBITDA of 0.03x and 0.5x respectively. I pounded the table.
- My recommended trade: “Buy the stock (preferably from cross-holders interested in selling). Buy with both hands. Buy a lot. Buy more later. Pressure the company to go private.”
- Since then, total return has been +295%. Today they announced another buyback. Tomorrow morning it gets done. Details details details!
Netease Cloud Music (9899 HK): Stock Up; Short Interest Up; Global Index Inclusion
- Cloud Village (9899 HK)‘s stock price has doubled over the last quarter and the increased market cap should lead to global index inclusion in August.
- Short interest in Cloud Village (9899 HK) is at an all-time high and has increased in lockstep with the stock price.
- Cloud Village (9899 HK) has outperformed Tencent Music Entertainment Group (1698 HK) and now trades at much higher valuations. A pair trade looks attractive here.
Vishal Mega Mart (VMM IN): Increased Float & Global Index Inclusion
- An increase in the stock price and free float should result in Vishal Mega Mart (VMM IN)‘s inclusion in a global index in August.
- Estimated passive buying is 191m shares (US$312m; 5.8x ADV; 15.4x delivery volume) at the close of trading on 26 August.
- The index inclusion could take the stock higher in the short-term but buyers in the June placement could be looking for an exit.
DFI Retail (DFI SP): Up 90% in a Year + Special Dividend. Cash Out or Hold Tight?
- DFI Retail’s strategic shift from portfolio investor to focused operator has unlocked over US$900 million, with US$600 million returned to shareholders via a US¢44.3 per share special dividend announced yesterday.
- Underlying profit rose 39% in 1HFY2025, driven by lower financing costs and strong performance in the Health & Beauty segment.
- On its investor call, DFI Retail Group Holdings (DFI SP) acknowledged sector headwinds and outlined plans for cost control, margin focus, and digital monetisation to offset weak revenue growth.
[JD.com, Inc (JD US, SELL, TP US$24) TP Change]: C2Q25 Preview: Near Term Loss Pressure Imminent
- We expect JD.com to report C2Q25 revenue/adjusted operating profit growth of 16%/(63%) YoY, which is 2%/(50%) vs. cons. due to the takeout subsidies.
- Despite the surge in new users, we remain skeptical on the ST effectiveness of food delivery (FD) cross-selling. We expect 2025 FD losses at RMB29bn.
- We keep JD as SELL and cut TP from US$25 to US$24.
The Bunny Returns: Playboy’s Market Comeback
- Playboy, Inc. (Nasdaq: PLBY) is undergoing a transformation to an asset-light business model centered around its iconic brand, positioning the company for sustainable profitability
- The strategy is starting to yield tangible improvements in profitability, as evidenced by its return to positive adjusted EBITDA in Q1 2025.
- Playboy’s current valuation (2.7x EV/2025 sales) does not fully reflect its long-term earnings potential. As licensing continues to scale and margins expand, the company is poised for a meaningful re-rating.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – July 2025
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- We add Asian Terminals (ATI PM) to our value conviction list. Read Asian Terminals Inc (ATI PM): Steady And Cheap Container Port Terminal Operator
- Our top picks are Asian Terminals (ATI PM), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Philippine Stock Exchange (PSE PM), and Ginebra San Miguel (GSMI PM).
Pre-IPO Boxihe Outdoor Sports Group – The Concerns Behind the High Growth
- Based on the successful application of self-developed technology, Boxihe has embarked on a completely opposite path to international brands, highlighting the “cost-effectiveness” in outdoor sports industry, thus achieving high growth.
- Creating the next blockbuster and diversifying product portfolios greatly test Boxihe’s operational capabilities, with some uncertainties. Boxihe may face the troubles of finding a new growth point in long term.
- Performance growth could remain high in the short term. Post-money valuation after Series B Financing reached RMB2.8 billion.Valuation of Boxihe could be higher than Li Ning but lower than Anta.
Omnicom Group: An Analysis Of Its Adjusted Client Investments, Brand Focus & Key Growth Catalysts!
- Omnicom Group’s second-quarter 2025 results reflect a mix of steady performance, strategic advancement, and ongoing operational challenges.
- Organic growth hit 3%, aligning with company expectations, and non-GAAP adjusted EBITDA margin remained stable at 15.3%.
- Non-GAAP adjusted net income per share increased by 5.1%, reaching $2.05.
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