In today’s briefing:
- Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
- The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now
- Jollibee Foods Close to Acquiring Norang Tongdak in Korea
- Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- BYD (1211 HK) Options: Unpacking the Top Trades of the Week
- Miniso: TOP TOY Spin-Off – Early Stage Pop Mart. Valuation Upside
- MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off
- NAV of Hanmi Science, Amorepacific Holdings, Youngone Holdings, OCI Holdings, & Orion Holdings
- PDD’s Q125 Profit Decline Occurred Before US Squeeze | April-May US Sales Far Weaker for Temu, SHEIN
- Taylor Wimpey Research Report
Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
- A couple of years ago, Sony Corp (6758 JP) announced they would spin off Sony Financial Holdings (8729 JP) (called Sony Financial Group Inc). That spinoff is due in Sep-2025.
- The extra capital required for a tech/industrial to hold the financial business is significant, but some of the other reasons Sony has offered are just management-speak hogwash.
- The problem? It creates a new event in the Nikkei 225 paradigm for which there was no rule. Now the Nikkei has proposed a rule. It isn’t perfect.
The Straight-Up Timelines on Three Big Econ Policy Bills Rattling Korea’s Local Market Right Now
- The Commercial Act passed committee but the floor vote set for the 12th was postponed unexpectedly today; inheritance tax and Samsung Life bills remain stuck at proposal stage.
- Presidential Office is pushing the Commercial Act reform hard; vote likely after new floor leader’s election. Passage is almost guaranteed, with enactment expected by early to late August.
- Inheritance tax bills face heavy backlog, delaying progress; the Samsung Life Law, proposed by another party, is pushed further back as the new government prioritizes easier wins.
Jollibee Foods Close to Acquiring Norang Tongdak in Korea
- It was reported in Chosun Business Daily that the Phillippine food giant Jollibee Foods (JFC PM) is close to acquiring Norang Tongdak.
- The entity to be sold is a 100% stake in Norang Food, the operator of Norang Tongdak. The sales price is expected to be around 150 billion won.
- EV/EBITDA multiple ranges from 7.2x to 9.3x if we assume equity value range from 130 billion won to 160 billion won.
Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
- Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
- There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
- The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.
BYD (1211 HK) Options: Unpacking the Top Trades of the Week
- This Insight analyzes sophisticated, live, multi-leg options strategies on BYD (1211 HK), executed over the period from 2 June to 9 June on the HKEX
- Highlights: Discover a range of noteworthy strategies, from an in-the-money bear put spread, to a bold short-term bullish iron condor, and a butterfly aiming at a narrow price target.
- Why read: In-depth breakdown of complex option strategies, shedding light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,
Miniso: TOP TOY Spin-Off – Early Stage Pop Mart. Valuation Upside
- MINISO has confirmed that it is considering a possible spin-off listing of TOP TOY, its pop toy division, signalling its intent to unlock value from its collectible toy business.
- Pop Mart International Group L (9992 HK), the leading player in the pop toy retail segment, is trading at nearly 50x forward earnings compared to Miniso’s 13.5x forward P/E.
- TOP TOY is in an early stage of its growth curve compared to Pop Mart and could be valued at a discount given notably lower operating margins.
MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off
- We preliminarily estimate TOP TOY may be valued at 19.1-40.3% of MINISO Group Holding (9896 HK)‘s market capitalisation, though there are still a lot of moving parts.
- TOP TOY is doing well in FY24 with a 41.1% surge in GMV, and for 1Q25, its revenue grew by 58.9%, reflecting exciting growth prospects.
- Bloks Group (325 HK) is a better comparable as its revenue is 2.3x TOP TOY’s, but its profit is 8x. A successful TOP TOY spin-off should benefit Miniso.
NAV of Hanmi Science, Amorepacific Holdings, Youngone Holdings, OCI Holdings, & Orion Holdings
- In this insight, we provide updated NAV valuations of Hanmi Science (008930 KS), Amorepacific Holdings (002790 KS), Youngone Holdings (009970 KS), OCI Holdings (010060 KS), and Orion Holdings (001800 KS).
- These five smaller holding companies have also outperformed the market this year (up 43% on average versus KOSPI which is up 20% in the same period).
- These holdcos’ outperformance has been driven by investors’ perception that the new Lee Jae-Myung administration will make real changes to improve corporate governance policies.
PDD’s Q125 Profit Decline Occurred Before US Squeeze | April-May US Sales Far Weaker for Temu, SHEIN
- Pinduoduo’s surprise Q125 OP & NP declines happened before US tariff, de minimis changes
- Recent data from Bain & Co. suggests extremely difficult US conditions for Temu, SHEIN
- If representative, the April-May US data suggest deep, lasting US challenges for the platforms
Taylor Wimpey Research Report
- Taylor Wimpey (TW) is the UK’s third largest homebuilder, managing 14,154 completions in 2022.
- Their share price has declined 44% over the last 2 years in response to rising mortgage rates.
- While we acknowledge the short to medium term impact of rising rates, we see Taylor Wimpey’s long-term profitability as strong, and worth twice their current valuation.
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