In today’s briefing:
- [Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE
- GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25
- Tencent Music (TME): 1Q25, Unnoticed Growth Continued, 80% Upside
- Webjet Group (WJL AU): BGH Is the Mystery Buyer and Seeks a Controlling Stake at A$0.80
- DKSH Malaysia: Excellent 1st Quarter Performance
- Short Tata Motors: Challenges Ahead
- Busy Ming Group Pre-IPO Tearsheet
- KOSPI 200 Tactical Outlook: Waiting for the June Elections
- Boxihe Outdoor Sports Pre-IPO Tearsheet
[Japan Buyback] Sankyo (6417) – Starts Buying Bigly. Again. Re-Levered It Has A Super-High ROE
- On 12 May 2025, Sankyo Co Ltd (6417 JP) announced earnings (Revenue -3.7%yoy, OP +1.5%, Net Profit +0.4%) with guidance for March 2026 showing Revs, OP, and NP all falling.
- OP and NP would fall 14.4% and 18.5% respectively. The dividend is expected to fall ¥10 to ¥90/share which would be a 41.6% payout ratio.
- The company also announced a BIG BUYBACK – Up to ¥60bn buying up to 30.0mm shares (13.66%), starting today and going through 31 March 2026.
GENDA Placement – Good Track Record & Sort off Well Flagged but Relatively Large
- GENDA (9166 JP), along with a selling shareholder, is looking to raise around US$190m to partly fund its M&A.
- Genda develops and operates amusement facilities in Japan, primarily operating under its Genda GiGO Entertainment subsidiary.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 June.
- With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings.
- We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.
Tencent Music (TME): 1Q25, Unnoticed Growth Continued, 80% Upside
- The 1Q25 result is quite healthy, but the shrinking minor business, social entertainment, covers the fact.
- The main businesses grew by two digits and the operating margin continued to grow by 28% YoY in 1Q25.
- We believe the stock has an upside of 83% and a price target of US$26 for the yearend 2025.
Webjet Group (WJL AU): BGH Is the Mystery Buyer and Seeks a Controlling Stake at A$0.80
- Webjet Group (WJL AU) disclosed a non-binding offer from BGH to acquire a controlling interest at A$0.80 per share, a 10.1% discount to the last close.
- BGH was also disclosed as the mystery buyer of the 5% stake on 8 May. BGH currently represents 10.76% of outstanding shares.
- The offer will likely be structured as a takeover offer with a 50.1% minimum acceptance condition. It is unattractive, and the Board should negotiate better terms.
DKSH Malaysia: Excellent 1st Quarter Performance
- Revenue up 7% Y on Y basis. PBT and PAT up 19%
- Operating profit of both consumer and healthcare business was up 15 & 18% respectively
- Cash flow from operations up by 11% and working capital improved
Short Tata Motors: Challenges Ahead
- Tata Motors Ltd (TTMT IN) delivered a decent operational performance in Q4 FY25, with a flat topline and margin recovery, led by robust performance in the Jaguar Land Rover business.
- While the Q4 FY25 performance was steady, we expect near-term results to remain muted.
- Therefore, we present a case for shorting Tata Motors in the near term and outlook on individual segments.
Busy Ming Group Pre-IPO Tearsheet
- Busy Ming Group Co., Ltd. (BMG) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by GS, Huatai, and DB.
- BMG is a leading F&B retailer in China, offering value-for-money products which are priced c.25% lower than the average for similar products available in the supermarket channel.
- It mainly operates under a franchised model and focuses mostly on third-tier cities and below.
KOSPI 200 Tactical Outlook: Waiting for the June Elections
- In just three weeks, on June 3rd, South Korea will hold an early presidential election.
- The KOSPI 200 INDEX on Tuesday closed at 347.17, entering deeply overbought territory based on our time and price quantitative models.
- Whether the index rallies into the election and then declines, or starts selling off ahead of the vote, our tactical stance is unchanged: we recommend short exposure or appropriate hedging.
Boxihe Outdoor Sports Pre-IPO Tearsheet
- Boxihe Outdoor Sports Group (BOS HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CICC and CITIC.
- BOS aspires to become a renowned leading outdoor brand globally, committed to providing high-performance outdoor garments and equipment.
- The firm began operations in 2012, with its core brand, Pelliot. Through Pelliot, BOS offered a wide range of products.
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