In today’s briefing:
- Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl
- HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)
- CVC Bump Higher (¥1,275) Than Their Final Price (¥1,250), Get GMO to Roll In Their 12.1%.
- BYD (1211 HK) Placement: Tactical Buy Opportunity in Key Support Zone
- Quiddity Leaderboard F100/F250 Mar25: Base Date for Ranks; Hargreaves Lansdown M&A Change Soon!
- Ping An Good Doctor (1833 HK) – The Mandatory General Offer and DeepSeek Story May Not Turn the Tide
- Thailand Rubber: Sri Trang Makes A Spectacular Foray In 2024, NER Too Impresses
- Sapporo’s 2025 Potential Holds Limited Upside After Investor Activism’s 300% Gains
- It’s Been a Tough Two+ Years for SHEIN & Its Investors, & Things Don’t Get Easier From Here
- Dissolution of Parent-Subsidiary Listing Is Just Beginning. Included Affiliates, It’ll Grow Further
Seven & I Holdings (3382 JP): Shares Under Pressure as Rumours Swirl
- Seven & I Holdings (3382 JP) denied a Yomiuri article that the Board has decided not to accept an Alimentation Couche-Tard (ATD CN) bid in favour of the restructuring plan.
- Despite the Board’s assertions that it is still having constructive discussions with Couche-Tard, its actions suggest otherwise.
- Couche-Tard remains interested but faces increasing roadblocks. The valuation is undemanding but the news flow is unlikely to support a rerating in the near-term.
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$5.3bn of Flows Post Capping (Mar 2025)
- The March rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
- The gross round-trip trade across all stocks across the four indices is estimated at HK$41.1bn (US$5.3bn). The net round-trip trade is HK$37.3bn (US$4.8bn).
- Meituan , JD.com, Baidu, Horizon Robotics, ICBC, BeiGene, Kuaishou Technology and China Construction Bank are the largest buys. Alibaba, Xiaomi, HSBC, ZhongAn Online and Tencent are the largest sells.
CVC Bump Higher (¥1,275) Than Their Final Price (¥1,250), Get GMO to Roll In Their 12.1%.
- Today, the last day of the ¥1,250 “Final Price” CVC Tender Offer for Macromill, Inc (3978 JP), CVC has bumped price to ¥1,275 and extended another two weeks.
- In the process, they got agreement from GMO to tender their 12.1% and GMO gets to reinvest into an 18-19% position in the Bidco.
- Investors are now competing against “activists” who aren’t in public markets. 20.6% of the register don’t like the ¥1,250-1,275 price either. But they aren’t selling. They’re re-buying there. You’re not.
BYD (1211 HK) Placement: Tactical Buy Opportunity in Key Support Zone
- As recently written by Brian Freitas and Sumeet Singh , BYD (1211 HK) is placing new shares on the market at at a price range of HK$333-345/share.
- The stock today dropped to roughly 340 and it’s oversold WEEKLY according to our models. Buying here, at this price, should bear fruit in coming weeks. More details below.
- We cannot yet predict the profit targets because our model needs the WEEKLY Close for this week, to do that. We will update this information when it becomes available.
Quiddity Leaderboard F100/F250 Mar25: Base Date for Ranks; Hargreaves Lansdown M&A Change Soon!
- In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the March 2025 index rebal event.
- The final rankings will be decided based on the full market cap at the close of trading today (3rd March 2025).
- Based on the current numbers, we see one change for the F100 index and three changes for the F250 index in March 2025.
Ping An Good Doctor (1833 HK) – The Mandatory General Offer and DeepSeek Story May Not Turn the Tide
- Recent surge of share price is driven by the craze for DeepSeek/AI in digital healthcare, not the improvement of fundamentals or effective validation of business model.So, the rally won’t last.
- Although AI is a great story, the extent to which DeepSeek can bring substantial benefits to PAGD remains to be verified. Small revenue scale may lead to low valuation premium.
- PAGD is expected to turn loss into profits in 2024. Short-term valuation should be lower than peers. When PAGD achieve profitability/revenue in large scale, P/B would approach the industry average.
Thailand Rubber: Sri Trang Makes A Spectacular Foray In 2024, NER Too Impresses
- Sri Trang posts US$48.8 mn profit, reversing loss of US$12.7 mn in 2023
- Sri Trang sells 133,163 tons of EUDR rubber in 2024
- North East Rubber setting up plant in Ivory Coast
Sapporo’s 2025 Potential Holds Limited Upside After Investor Activism’s 300% Gains
- Sapporo Holdings (2501 JP)’s beer, food, and soft drinks businesses are now trading near 19.0x our 2025 OP estimate, suggesting some remaining upside, especially if guidance is revised upward.
- We believe the company’s 2025 guidance is overly conservative, as Sapporo stands to benefit the most from Japan’s liquor tax revisions.
- If growth momentum persists, we estimate 2025 OP could reach ¥22.3bn, surpassing the current ¥17.5bn guidance, though the 300% upside driven by investor activism has mostly run its course.
It’s Been a Tough Two+ Years for SHEIN & Its Investors, & Things Don’t Get Easier From Here
- Over the last 25 months, there’s been a steady stream of bad news for DTC platform SHEIN
- The latest challenges: US tariff chaos & Amazon’s launch of its competing platform, Haul
- Tariff changes & growth of Haul could mean SHEIN IPO gets done at fraction of 2023 valuation
Dissolution of Parent-Subsidiary Listing Is Just Beginning. Included Affiliates, It’ll Grow Further
- With the TSE requiring disclosure of rationale regarding parent-subsidiary listings, etc., it is certain that more companies will move to dissolve parent-subsidiary listings.
- The background for the high TOB premium in Japan was that many companies had stock prices considerably lower than their intrinsic value.
- There are total of 1,217 companies: 230 listed subsidiaries and 987 equity method affiliates. In addition to this, industry restructuring is also required; there are still numerous opportunities for TOB.
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