In today’s briefing:
- [Japan M&A] Sumi Elec Buys Out Minorities in Sumitomo Riko (5191 JP) For ¥2,600 – Low Price/Multiple
- Sumitomo Riko (5191 JP): Sumitomo Electric (5802 JP)’s Tender Offer Is Light but Likely Done
- Lenskart Solutions IPO – Is Pricey but Has a Strong Market Position
- BYD (1211 HK): 3Q25, No Surprise, Revenue Down for First Time
- 52TOYS Development IPO Preview: A “Must Own” Stock, Big Push In Overseas Markets Looks Promising
- Lenskart IPO: Fashioning Vision or Pricing Perfection?
- Oriental Watch (398 HK)
- Seres Group Hong Kong IPO Valuation Analysis
- Tri Pointe Homes’ 32
- How Hasbro Is Using Marvel, Star Trek, & The Hobbit to Supercharge Magic: The Gathering!
[Japan M&A] Sumi Elec Buys Out Minorities in Sumitomo Riko (5191 JP) For ¥2,600 – Low Price/Multiple
- Today with the earnings announcement, Sumitomo Electric Industries (5802 JP) announced it would buy out minorities in Sumitomo Riko Company (5191 JP), its rubber products subsidiary.
- The price is low, and especially so when one considers the significant net receivables and inventory number (about 2mos of revenue, but one turn of annual EBITDA).
- Crossholders and insiders, however, own nearly 15% of the company, and that makes blocking this deal difficult, despite its low price, and lack of synergies considered in the price.
Sumitomo Riko (5191 JP): Sumitomo Electric (5802 JP)’s Tender Offer Is Light but Likely Done
- Sumitomo Riko Company (5191 JP) has recommended a tender offer from Sumitomo Electric Industries (5802 JP) at JPY2,600, a 20.6% premium to the undisturbed price.
- The offer is arguably attractive as it is above the midpoint of the special committee/target IFA DCF valuation range and represents an all-time high.
- The offer is light as it implies a discount to peer multiples. However, the significant cross-holders on the register suggest that the minimum tendering condition should be met.
Lenskart Solutions IPO – Is Pricey but Has a Strong Market Position
- Lenskart Solutions is looking to raise about US$825m in its upcoming India IPO.
- Lenskart Solutions Limited (LSL) is a technology-driven eyewear company with integrated operations spanning designing, manufacturing, branding and retailing of eyewear products.
- We have looked at the past performance in our previous note. In this note, we talk about the RHP updates and valuations.
BYD (1211 HK): 3Q25, No Surprise, Revenue Down for First Time
- It is no surprise that BYD’s revenue decreased YoY in 3Q25 according to our previous sales volume note.
- The quarter-over-quarter margin improvement is not about seasonality, but about a sign of the margin recovery in 2026.
- We believe the stock has a downside of 25% for 2026.
52TOYS Development IPO Preview: A “Must Own” Stock, Big Push In Overseas Markets Looks Promising
- 52TOYS Development, a Beijing-based multi-genre IP toy company, is seeking Hong Kong IPO that would raise up to $200M.
- Founded in 2012 by Mr. Chen and Mr. Huang, 52TOYS positions itself as a toymaker with a strong emphasis on collectible mecha and sci-fi aesthetics.
- 52TOYS has made a big push online and in overseas markets. I believe the company has primary growth drivers such as international expansion and new licensed and proprietary IP products.
Lenskart IPO: Fashioning Vision or Pricing Perfection?
- Lenskart’s upcoming IPO marks India’s first major consumer-tech listing, positioning the eyewear disruptor as a vertically integrated D2C brand with around 75% share in organized retail and strong international traction.
- While Lenskart’s 75% revenue surge and 275% EBITDA jump over two years highlight its operational strength, but the proposed valuation (70x EV/EBITDA) far exceeds global peers raises serious concerns.
- Lenskart’s vertically integrated model, data-led omnichannel scale, and strong international playbook offer structural advantages. But the IPO’s frothy valuation and pre-IPO promoter stake sales warrant a cautious stance for investors.
Oriental Watch (398 HK)
- Alternative data suggests a turn in the luxury wristwatch market. But most likely, this turn is due to US tariffs on Swiss watch imports, causing US buyers to panic buy.
- Oriental Watch continues to be undervalued at just 8.3x P/E and a dividend yield of 12%
- However, the Chinese watch market remains weak and there’s no clear sign of a turnaround yet
Seres Group Hong Kong IPO Valuation Analysis
- Our base case valuation of Seres Group is target price of 189.9 CNY which represents a 17% upside from current levels over a 6-12 month period.
- Our target P/S multiple of 1.4x is 50% premium to the average valuation multiple of the comps in 2026.
- We used a premium valuation multiple for Seres Group due the company’s higher sales growth, EBITDA margins, and ROE.
Tri Pointe Homes’ 32
- Tri Pointe Homes has reported its financial performance for the third quarter of 2025, providing a mixed outlook on both its immediate results and strategic direction moving forward.
- During this period, the company closed 1,217 homes at an average selling price of $672,000, generating home sales revenue of $817 million.
- This exceeded the upper limit of their delivery guidance, showcasing their ability to navigate a challenging housing market environment.
How Hasbro Is Using Marvel, Star Trek, & The Hobbit to Supercharge Magic: The Gathering!
- Hasbro’s third-quarter 2025 financial performance indicates a mixed but generally positive trajectory for the company.
- Net revenue and operating profit increased year-over-year, driven by key brands such as Magic: The Gathering and various collaborations.
- The company reported an 8% rise in net revenue, reaching $1.4 billion, and a similarly robust increase in operating profit of 8%, resulting in an adjusted operating profit margin of 25.6%.
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