In today’s briefing:
- Seven & I Holdings (3382 JP): Uncomfortable Truths
- 7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
- HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June
- Tata Motors: Is the Worst Finally Over? A Turnaround & Demerger Play
- D’Alba Global IPO Preview
- This TOB Does Not Question the Fundamental Issue of REIT Governance, but Will the Tactic Succeed?
- NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul
- Golf Digest Online (3319 JP) – FY25/12 Key Initiatives for Japan and Overseas
- The New York Times Company: Growth in Digital Subscriptions & Revenue Fueling Our ‘Outperform’ Rating!
- Zoomcar Holdings – Vastly Improved Customer Experience…
Seven & I Holdings (3382 JP): Uncomfortable Truths
- Seven & I Holdings (3382 JP) has published two documents to respond to misinformation and detail its “constructive engagement” with Alimentation Couche-Tard (ATD CN).
- The statements underscore the Board’s serious doubts about securing US antitrust approval. The significant discrepancies in the engagement timeline point to two parties at loggerheads.
- While the Board claims it is pursuing a dual-track process to create value, the reality is that the process is designed to hinder Couche-Tard’s offer to facilitate the restructuring plan.
7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
- On 10 March, Seven & I Holdings (3382 JP) released a statement about its interactions with Alimentation Couche-Tard (ATD CN). The next day, ATD released its own. They didn’t match.
- The 7&i spokesperson admitted one technical point, but investors seemed to believe ATD over 7&i. On 13 March, ATD held a presentation in Tokyo. Materials? Unchanged. Earnings comments? Unchanged.
- This morning, 7&i released a document which “corrects the record regarding critical false and misleading claims about 7&i’s engagement with Alimentation Couche-Tard (ACT).” OUCH. The stock fell.
HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June
- There have been 14 new listings on the Main Board of the HKEX in Q1. One listing is a transfer from the GEM Board and one is a De-SPAC.
- Of the 14 stocks, we see Mixue Group (2097 HK), Guming Holdings (1364 HK) and Bloks Group (1850960D CH) as potential HSCI inclusions in June.
- There are no lock-up expiries in the stocks ahead of inclusion in Southbound Stock Connect and the low float could take the stocks higher ahead of the index inclusion announcement.
Tata Motors: Is the Worst Finally Over? A Turnaround & Demerger Play
- The Chinese slowdown and JLR’s ICE phase-out pressure near-term margins, but Indian PV growth and EV leadership offer a strong domestic counterbalance.
- Tata Motors is demerging its Commercial Vehicle and Finance arms to sharpen focus and unlock value across its core Passenger Vehicle and JLR businesses.
- Tata Motors is transitioning from a cyclical turnaround story to a long-term structural play on India’s mobility and global EV transformation.
D’Alba Global IPO Preview
- D’Alba Global is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 54,500 won to 66,300 won per share.
- According to the bankers’ valuation, the expected market cap of the company will be 692 billion won to 842 billion won post IPO.
- D’Alba Global has one of the best growth rates for sales and operating profits among Korean cosmetic companies in the past four years.
This TOB Does Not Question the Fundamental Issue of REIT Governance, but Will the Tactic Succeed?
- Since important decisions on REIT management are made by the sponsor companies, governance isn’t functioning. That’s why REITs have been very careful to strengthen their compliance systems and information disclosure.
- For REITs that rely heavily on properties contributed by their sponsors, it is unlikely that other investors would support an activist fund’s advocacy for a change of asset manager.
- The most annoying thing for the sponsor is the change of asset manager. The tactic of this TOB is to extract shareholder returns by addressing what the sponsor company dislike.
NZME’s Strategic Review and Activist Involvement Signal Potential Value Unlock Through OneRoof Spin-Off and Board Overhaul
- NZME Limited’s strategic review of OneRoof aims for potential separation, with activist Jim Grenon acquiring a 13.5% stake.
- Grenon and Osmium Partners are pushing for board changes and OneRoof’s monetization, suggesting a possible spin-off.
- The sum-of-the-parts valuation estimates NZME’s stock at A$1.49/share, implying a 35% upside from current levels.
Golf Digest Online (3319 JP) – FY25/12 Key Initiatives for Japan and Overseas
- While FY24/12 consolidated financial results paint a challenging environment, the solid achievements in GDO’s mainstay Golf Merchandise Sales business, which accounts for 34% of total consolidated net sales, should not be overlooked.
- The graph below comparing golf gear sales for one of the largest brick-and-mortar retailers ‘Co. A’ with the largest online retailer GDO highlights the success of GDO’s initiatives, GDO turning in +7.3% YoY growth versus Co. A -0.6% YoY. Co.
- A noted in its 1H FY25/6 briefing that for its Golf business (34.8% of consolidated net sales), existing store sales declined YoY, citing weak performance of golf clubs due to differences in new product launches and price reductions.
The New York Times Company: Growth in Digital Subscriptions & Revenue Fueling Our ‘Outperform’ Rating!
- The New York Times Company reported its fourth quarter and full-year financial results for 2024, highlighting solid performance across key operational and financial metrics.
- The company continued to focus on its essential subscription strategy, aiming to expand its subscriber base and diversify its revenue streams.
- In 2024, New York Times Company added over 1.1 million digital subscribers, bringing its total subscriber count to 11.4 million.
Zoomcar Holdings – Vastly Improved Customer Experience…
- Peer-to-peer (P2P) car sharing is a new and growing industry that competes with traditional car rental companies.
- Rather than renting access to a company-owned fleet (B2C), car sharing allows owners of cars to rent their own vehicles directly to consumers through a platform (P2P) and charges a fee for the services.
- The industry looks to emulate other successful shared economy businesses such as Airbnb, etc., which are platforms for property owners to rent real estate directly to consumers.
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