In today’s briefing:
- Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.
- Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering
- CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China
- Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground
- Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock
- GoTo Gojek Tokopedia (GOTO IJ) – Entering New Territory
- Lucror Analytics – Morning Views Asia
- #1 Leadership Bytes(07-Apr-25)
- Haad Thip Meeting (HTC TB)
- DigiPlus Interactive (PLUS PM): Gleanings From the Annual Report FY24 and Management Meeting
Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.
- Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
- While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering
- Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
- Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).
CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China
- The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) was less impacted than other indices by the global sell-off: on Monday it was down only -10% from the recent top.
- On Monday Donald Trump posted that if China does not withdraw immediately its +34% tariffs increase, the United States will impose ADDITIONAL Tariffs on China of +50%, effective April 9th!
- Although the CSI 300 Index is more insulated than other indices from global market volatility, it is not completely immune and remains vulnerable to the impact of US’s tariff threats.
Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground
- Chagee is the No. 6 largest teahouse chain in China according to store number.
- Very few teahouses have a per customer transaction higher than Chagee.
- We believe Chagee has advantages in the high price market.
Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock
- Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to offload their entire stakes in Suzuki Motor (7269 JP) by way of a secondary offering.
- With the size of the secondary offering less than 5% of the number of shares, there could be no index buying in the short-term and that will pressure the stock.
- If the overallotment option is exercised and the seller of the shares is currently considered as non-float, there could be small passive buying in the short-term.
GoTo Gojek Tokopedia (GOTO IJ) – Entering New Territory
- GoTo Gojek Tokopedia‘s 4Q2024 is likely just the start of the positive impact of its barbell strategy of enticing new users through affordable products before monetising through premium offerings.
- The rapid turnaround of the fintech business as it booked its first quarterly positive adjusted EBITDA was a key standout and was front and centre of management results comments.
- GOTO remains upbeat in its prospects for 2025, providing its first guidance for adjusted EBITDA, and highlighting the positive contribution from fintech and mid-teens growth for ODS.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Tata Motors
- In the US, the March nonfarm payrolls unexpectedly increased to 228 k (140 k e / 117 k revised p), albeit the February figure was revised downwards to 117 k (from 151 k). The unemployment rate edged up to 4.2% (4.1% e / 4.1% p).
- Average hourly earnings came in at 0.3% m-o-m (0.3% e / 0.2% revised p) and 3.8% y-o-y (4.0% e / 4.0% p).
#1 Leadership Bytes(07-Apr-25)
- Dixon Technologies India Ltd (DIXON IN), Metropolis Healthcare Limited (METROHL IN), Hitachi Energy India (POWERIND IN) have shared major updates on expansion plans, acquisitions, order growth, and strategic shifts across sectors.
- Each company is taking strategic steps to expand market share, strengthen operations, and tap into emerging growth sectors.
- These updates highlight diverse growth strategies, from Dixon’s manufacturing expansion to Apollo’s focus on defense, suggesting a balanced approach across market leaders.
Haad Thip Meeting (HTC TB)
- Last week, I had the great pleasure of meeting with Chief Financial Officer Amrit Shrestha and several of his colleagues at Coca-Cola bottler Haad Thip (HTC TB – US$193 million).
- The company is the exclusive producer and distributor of Coca-Cola products across Thailand’s 14 Southernmost provinces.
- The stock has performed beautifully over time, though sideways since 2021. It trades at a 9.6x P/E ratio and a 6.4% dividend yield.
DigiPlus Interactive (PLUS PM): Gleanings From the Annual Report FY24 and Management Meeting
- PAGCOR forecasts a strong FY25 industry GGR of 450 bn pesos (20% YoY), of which the share of bingo/casino games is expected to be 50% (~225 bn pesos).
- If DigiPlus Interactive (PLUS PM) maintains a share of 45% (vs last year’s 47%), revenue will increase by 33% to 100 bn pesos.
- With the recent correction due to the current geopolitical situation, the stock trades at 12.2x/9.5x FY24/FY25e, 35% ROCE, with multiple catalysts, e.g, a great Q1FY25 and expansion in Brazil.
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