In today’s briefing:
- A Very Odd Change – Studio Alice (2305) Self-Demotes
- Event Driven: Delta Corp Demerger~ Separation Of Core Business From Problems
- Quiddity NIFTY Mar25 Rebal: Some Surprises; Combined Flows of US$1bn One-Way
- [Alibaba (BABA US,BUY, TP US$150) TP Change]: AI’s Inflection Point Arrived, Will E-Commerce’s Also?
- MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices
- Quiddity Leaderboard TDIV Mar25: US$448mn One-Way Flows; High-Impact for Cheng Shin Rubber
- Mixue Group IPO Valuation Analysis
- Breaking New Ground: Xiaomi, Trip Com and CATL Hit Record Highs
- MIXUE Group (2097 HK) IPO: Valuation Insights
- Prosus/Just Eat Takeaway: A Strategic Takeover in the Food Delivery Sector
A Very Odd Change – Studio Alice (2305) Self-Demotes
- Last Thursday, in an announcement which was very odd, photo studio Studio Alice (2305 JP) announced that it was voluntarily leaving TSE Prime.
- They said they would “demote” themselves to TSE Standard as of 27 February in order to save money by not responding to the requirements of Prime.
- That means a voluntary TOPIX deletion at end-March. The stock has an interesting shareholder structure and this event is 115 days of ADV to sell.
Event Driven: Delta Corp Demerger~ Separation Of Core Business From Problems
- Delta Corp Ltd (DELTA IN) announced a demerger to separate its Hospitality & Real Estate businesses from its GST-challenged Casino business. Additionally, it is divesting its online gaming business.
- The hospitality business plans to add 450 new rooms and the company owns a 100-acre land parcel near Moga Airport, which holds significant growth potential.
- The demerger will leave tax liability with the main company, while the demerged business, accounting for only 6% of revenue, will operate with focused execution and independent decision-making.
Quiddity NIFTY Mar25 Rebal: Some Surprises; Combined Flows of US$1bn One-Way
- The March 2025 Rebalance results for the NIFTY broad market Indices were announced after the close on Friday 21st February 2025.
- There will be two changes for NIFTY 50 and five changes for NIFTY 100 during the March 2025 index rebal event.
- All NIFTY 50 and NIFTY 100 changes will also be reflected in the NIFTY Next 50 index which could see US$366mn one-way capping flows.
[Alibaba (BABA US,BUY, TP US$150) TP Change]: AI’s Inflection Point Arrived, Will E-Commerce’s Also?
- Alibaba reported C4Q24 top line in-line with our estimate and consensus, but non-GAAP NI beat our estimate/consensus by 12%/11%, attributable to cost control and AntFin’s profitability improvement;
- But what drives the stock was the strong performance in AliCloud and an articulation of a clear investment logic on Generative AI (GAI),
- While the AI inflection point has arrived earlier than we expected, we remain eying for the domestic e-commerce turnaround with Jiang Fan at the helms.
MIXUE Group (2097 HK) IPO: Small Float to Keep Stock Out of Most Indices
- Mixue Group (MIX HK) has priced its IPO at HK$202.5/share and will raise up to HK$3.97bn (US$511m) if the oversubscription option is exercised, valuing the company at HK$76.35bn (US$9.8bn).
- Despite a US$10bn market cap, the stock will find it difficult to be added to global and local indices since 60% of the shares are unlisted.
- The stock is likely to remain in the shadows for one global index and could be added to the other in December. HSCI inclusion could take place in September.
Quiddity Leaderboard TDIV Mar25: US$448mn One-Way Flows; High-Impact for Cheng Shin Rubber
- The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
- In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the March 2025 index rebal event.
- We expect no changes for the TDIV index for March 2025 rebal and we estimate the one-way capping flow to be US$448mn.
Mixue Group IPO Valuation Analysis
- Mixue Group plans to complete its IPO, selling 17.1 million shares at the IPO price of HK$202.50 per share. The IPO is expected to start trading on 3 March.
- Our base case valuation of Mixue Group is implied market cap of HKD 96 billion or target price of HKD 254, which is 26% higher than the initial IPO price.
- Our valuation sensitivity analysis suggests a range of HKD 206 to HKD 308 per share for Mixue Group.
Breaking New Ground: Xiaomi, Trip Com and CATL Hit Record Highs
- Trip Com, Contemporary Amperex Technology and Xiaomi all hit fresh highs in EM fund ownership.
- Rotation in all three was among the most positive across all China stocks, with all measures of fund ownership moving higher.
- Conviction opens from GIB, Putnam and Aubrey we among the funds driving ownership higher.
MIXUE Group (2097 HK) IPO: Valuation Insights
- Mixue Group (2097 HK), a world-leading manufacturer of freshly made drinks, is seeking to raise US$445 million through an HKEx IPO.
- We previously discussed the IPO in MIXUE Group (2097 HK) IPO: The Bull Case and MIXUE Group (2097 HK) IPO: The Bear Case.
- There are five cornerstone investors. Our valuation analysis suggests Mixue is attractively valued at the IPO price range. Therefore, we would participate in the IPO.
Prosus/Just Eat Takeaway: A Strategic Takeover in the Food Delivery Sector
- Prosus’ €4.1bn all-cash offer for Just Eat Takeaway.com represents a 63% premium to the pre-announcement share price and an EV/NTM EBITDA multiple of 9.3x, above the sector median of 7.2x.
- The deal strengthens Prosus’ global food delivery footprint, complementing its stakes in iFood, Delivery Hero, and Meituan, with potential synergies in AI-driven logistics, customer acquisition, and operational efficiency.
- Regulatory approval remains a key hurdle, especially in markets where Just Eat Takeaway.com and Delivery Hero hold significant shares, potentially impacting the likelihood and timeline of deal completion.
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