In today’s briefing:
- Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road
- Vesync (2148 HK): Scheme Vote on 23 April
- Vesync (2148 HK): 23rd April Scheme Vote. Done Deal
- The Reject Shop: Dollarama’s Done Deal
- Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse
- MFE Tunes In to ProSieben for a Pan-European Broadcast Power Play
- Sariguna Primatirta (CLEO IJ) – Pure Water on the Move
- J Front Diversifies to Generate More Income
- RPSG Ventures: FMCG Business Is Scaling Up Well | BPO Business Is Growing Now
- Mixue Vs Guming: Valuation Premium. Comparing Earnings Growth in 2024
Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
- Event-Driven developments: Seven & I Holdings (3382 JP), Topcon Corp (7732 JP), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Sinarmas Land (SML SP), Gold Road Resources (GOR AU).
Vesync (2148 HK): Scheme Vote on 23 April
- Vesync (2148 HK)’s IFA opines that the Yang family’s HK$5.60 cash offer is fair and reasonable. The IFA does not recommend the scrip option. The vote is on 23 April.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection). The offer price is final.
- The vote is low-risk due to a lack of opposition. At the last close and for the 15 May payment, the gross/annualised spread is 2.9%/28.7%.
Vesync (2148 HK): 23rd April Scheme Vote. Done Deal
- On the 27th December, Vesync (2148 HK), a manufacturer of small home appliances, announced an Offer, by way of a Scheme, from the Yang family controlling ~69.04% of Vesync.
- The Cancellation Price of $5.60/share – declared final – was a 33.3% premium to undisturbed, and above the 2020 IPO price of HK$5.52/share.
- The Scheme Doc is now out, with a Court Meeting on the 23rd April, and expected payment on or before the 15th May. The IFA (Somerley) says “fair & reasonable”.
The Reject Shop: Dollarama’s Done Deal
- Reject Shop (TRS AU), a discount variety store, has entered into a Scheme Implementation Deed with Canadian outfit Dollarama (DOL CN).
- Dollarama is offering A$6.68/share, a 112% premium to last close. The Offer does NOT require FIRB signing off. The Offer has the unanimous backing of both boards.
- The Offer also has the backing of TRS’ largest shareholder, Kin Group (20.8%). Implementation is expected July 2025. This is done.
Global Digital Niaga (BELI IJ) – Firmer Underfoot for the Dark Horse
- Global Digital Niaga (BELI IJ) booked a strong finish to 2024, driven by its 3P retail and institutional business, although 1P retail and physical stores also performed well.
- The company continues to see improving take rates in FY2024, whilst its average order value increased through a more favourable product mix, with gross margins and cash flows improving significantly.
- Global Digital Niaga continued to expand its physical stores for monobrand and multibrand stores, adding Huawei as a brand. Valuations look reasonable given growth prospects and progress towards profitability.
MFE Tunes In to ProSieben for a Pan-European Broadcast Power Play
- MFE’s €5.70/share offer reflects strategic aims, not a traditional control premium, and values ProSieben near peer multiples amid industry disruption and weak organic growth prospects.
- The deal structure and German takeover law enable MFE to carry out a creeping takeover strategy, allowing it to gradually increase its stake post-settlement without launching a new public offer.
- Estimated net synergies of €1.00–1.39 per share, boosting the deal’s potential strategic return.Market skepticism is visible in the -10.2% gross spread.
Sariguna Primatirta (CLEO IJ) – Pure Water on the Move
- Sariguna Primatirta (CLEO IJ) booked yet another quarter of impressive sequential growth in 4Q2024, hitting another record quarterly revenue, with margins improving at the same time, boosting profits.
- The company opened three factories in 2024 and plans three more in FY2025, with the total to 35 across Indonesia and further extending its scale and reach, and driving growth.
- The main driver for growth will come through general trade, which makes up 70% of distribution, with a factory opening push outside Java. Valuations are attractive versus growth.
J Front Diversifies to Generate More Income
- J Front has been pushing ahead with new ways to get younger (and richer) customers into its stores.
- It recently opened a high end art floor at Matsuzakaya Nagoya, continues to expand its fashion subscription business, and will shortly open the first joint store with Komehyo.
- It is also investing heavily in real estate in key cities as a third major platform to its business.
RPSG Ventures: FMCG Business Is Scaling Up Well | BPO Business Is Growing Now
- With INR 145cr revenue in the FMCG business in Q3FY25, RPSGV has sustained its INR 550cr+ annualized revenue run-rate from the last quarter, which implies it is scaling up well.
- The BPO business (“Firstsource”) has normalized after seeing tough times a few quarters ago. Q3FY25 revenue grew 30%+ YoY and 10%+ QoQ. EBIT margin has been steady at 11% QoQ.
- Within the Sports business, the IPL franchise, Lucknow Super Giants, announced a new captain, Rishabh Pant, under whose leadership there is likely to be more aggression towards result orientation.
Mixue Vs Guming: Valuation Premium. Comparing Earnings Growth in 2024
- The comparison between Mixue Group (2097 HK) and Guming (1364 HK)’s 2024 annual results highlight how their financial and operational performance diverged sharply.
- Mixue’s vertically integrated operations provide it a strong competitive edge and superior margins while Guming, operating in the mid-priced segment faced fierce competition
- Mixue’s high-quality earnings growth underscores a robust business model that attracts premium valuation multiples.
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