In today’s briefing:
- 7&I (3382) Possibility of YUUUUUGE Buyback?
- 7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly
- Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure
- Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So
- Quiddity Leaderboard SET50 Jun25: One Intra-Review Replacement Soon! Three Regular Changes Later
- Astra International (ASII IJ) – Resilience in Motion
- Nongshim Raises Instant Noodles Prices
- Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)
- Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!
- The Beat Ideas: Kitex Garments- A Global Inflant Wear Play
7&I (3382) Possibility of YUUUUUGE Buyback?
- Last Thurs the MBO died. Tuesday an article said the ACT deal had died. Then 7&i denied that. Yesterday an article said Bain’s York Holdings deal would be approved today.
- That meant a Board meeting which would approve receipt of ~¥700bn of cash. What to do with it?
- Just now, Bloomberg says Seven & I Holdings (3382 JP)‘s board will consider a massive buyback. THAT is the capital allocation news my last piece suggested necessary. It’s HUGE.
7&I (3382) – A Starting Point for the Standalone Plan – The Good, The Bad, The Ugly
- Today, partway through the day, we got a Bloomberg article suggesting a large-scale buyback was to come. Post-close, we got the full details.
- “Seven & i Holdings Announces Plan to Unlock Shareholder Value Through Leadership Changes and Transformational Capital and Business Initiatives”.
- Sale of York. Management change. Update on Special Committee work with ACT. Commitment to return ¥2trln to shareholders via buybacks by FY2030. Higher divs. IPO of 7-Eleven Inc (US).
Seven & I Holdings (3382 JP): Board’s Plan to Unlock Value Is a Stop-Gap Measure
- The Seven & I Holdings (3382 JP) Board announced a plan to unlock and distribute significant value to shareholders.
- The initial excitement focused on the positives of leadership changes, US Assets IPO, a higher-than-expected valuation for the Superstore Business and a considerable buyback.
- The negatives of a long-dated buyback, inevitable rejection of the Couche-Tard offer, an uncertain US Assets IPO and ongoing HoldCo discount suggest the initial excitement will fizzle out.
Sun Art (6808 HK): IFA Says MGO Is Not Fair. Rightfully So
- Late December 2024, Alibaba (9988 HK) entered an SPA with DCP Capital to offload its 78.7% stake in Sun Art (6808 HK) at HK$1.38/share, a 44.4% discount to last close.
- The SPA completed on the 27th Feb, triggering an unconditional MGO, also at HK$1.38. FWIW, a deferred payment option raises the Offer Price to a maximum of HK$1.58/share.
- The Composite Document is now out, with a Closing Date for tendering on the 27th March. This won’t be extended. The IFA (Somerley) says NOT fair & reasonable.
Quiddity Leaderboard SET50 Jun25: One Intra-Review Replacement Soon! Three Regular Changes Later
- The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
- In this insight, we take a look at the potential ADDs/DELs for SET 50 in the run up to the index rebal event in June 2025.
- The GULF-INTUCH M&A event could trigger an intra-review change within the next few weeks. Then there could be more regular index changes in June 2025.
Astra International (ASII IJ) – Resilience in Motion
- Astra International recently released finely balanced set of FY2024 results, with weaker auto sales offset by stronger 2W and financial segment performance, with other segments also performing above expectations.
- Financial services growth was driven by stronger multifinance growth, whilst the heavy equipment division saw stronger growth from mining contracting and gold offsetting slower growth from coal mining.
- Astra continues investing in sustainable energy, nickel, and healthcare and looks for new opportunities. Valuations remain attractive on less than 6x forward PER and yield > 8%.
Nongshim Raises Instant Noodles Prices
- Nongshim announced that it plans to increase the prices of its instant noodles and snack products starting next week.
- Nongshim plans to raise the retail prices of 14 instant noodle products by 7.2% on average and three snack products by 7.4% starting Monday (10 March).
- We estimate the consensus to raise their earnings estimates by 5-10%+ in 2025 and 2026, driven by the higher product prices of major instant noodles and snacks.
Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)
- Trial was already one of Japan’s leading discount retailers with a strong network of stores down south in Japan although rather low margins.
- Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.
- Together, the two will now be able to take on Aeon, Seven & I, PPI and other major retailers in building the first true national grocery chains in Japan.
Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!
- Booking Holdings, a major player in the global online travel industry, reported its fourth-quarter and full-year 2024 financial results, showcasing a strong performance across several key metrics.
- The company achieved a 13% year-over-year growth in room nights during the fourth quarter, surpassing its expectations and reflecting robust demand across all major regions.
- The growth in room nights contributed to a 17% increase in gross bookings and 14% revenue growth, both exceeding the company’s prior guidance.
The Beat Ideas: Kitex Garments- A Global Inflant Wear Play
- Kitex Garments (KTG IN) is the world’s second-largest manufacturer of ready-to-wear clothing for infants and children.
- KGL is expanding its manufacturing capabilities by establishing two new integrated units in Warangal and Sitarampur, Telangana which will increase capacity to 10.68L pieces per day.
- Kitex Garments is also planning to merge with Kitex Childrenswear Limited, which sell processed fabrics, rental agreements for factory premises, and special job work contracts for KGL.
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