In today’s briefing:
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – August 2025
- Meituan (3690 HK): Down 12% After 2Q25 – What Spooked Investors?
- Korea Small Cap Gem #44: Tovis
- Trip.com (9961HK, TCOM): 2Q25, Stock Surged On Release Day, But Still 24% Upside
- Orion Breweries Pre-IPO – Brewing Growth Beyond Okinawa, Headwinds Ahead
- Maruti E‑Vitara Launch: Make in India, Make for the World…
- US Foods Is Setting the Stage for Robust Growth With Pronto
- Meituan – Earnings Flash – Q2 FY 2025 Results
- Hyatt Hotels: Expansion of the Group Business Segment to Potentially Enhance Its Financial Profile!
- Live Nation Entertainment Dominates Sponsorships With High-Impact Festival Partnerships; What’s Next?
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – August 2025
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Asian Terminals (ATI PM), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Philippine Stock Exchange (PSE PM), and Ginebra San Miguel (GSMI PM).
- We have some very positive updates from Plover Bay Technologies (1523 HK) / Asian Terminals (ATI PM) and The Keepers Holdings (KEEPR PM), post their quarterly results.
Meituan (3690 HK): Down 12% After 2Q25 – What Spooked Investors?
- Meituan (3690 HK) shares fell 12.5% post – 2Q2025 results, reflecting investor concerns over prolonged subsidy wars and lack of visibility on when rational competition may resume.
- 2Q 2025 revenue growth lagged the pace of delivery transaction growth as incentives sharply reduced effective revenue capture while rising marketing costs nearly wiped out quarterly profit.
- Along side the rapid growth in China’s instant delivery market, where groceries and daily essentials are delivered in 30 minutes or less, competition among leading retail/delivery players have escalated.
Korea Small Cap Gem #44: Tovis
- Tovis is one of the key beneficiaries of continued opening of new casinos in Asia/globally. The company provides specialty monitors for slot machines, casino gaming cabinets, and arcade/gaming machines.
- The growth of the automotive/other displays unit has been driven mostly by domestic sales which increased from 36.6 billion won in 2022 to 239.2 billion won in 2024.
- Tovis is trading at EV/EBITDA of 4.5x based on LTM financials and recent prices. This is much lower than average EV/EBITDA multiple of 12.4x from 2020 to 2024.
Trip.com (9961HK, TCOM): 2Q25, Stock Surged On Release Day, But Still 24% Upside
- The stock price surged by 7.7% on the 2Q25 release day.
- Total revenue increased by 16% YoY in 2Q25 among which accommodation reservation revenue increased by 21% YoY.
- The operating margin was stable at a level significantly higher than the period before COVID.
Orion Breweries Pre-IPO – Brewing Growth Beyond Okinawa, Headwinds Ahead
- Orion Breweries Limited’s (409A JT) operations span across alcoholic beverages, tourism and hotel businesses, aiming to raise ~US$126m in its Japan IPO via a mix of primary and secondary offerings.
- Orion Breweries (OBL) has a strong Okinawa market position (~40% beer share). Share of overseas sales has been growing (~23% of FY25 revenues), while profitability has also largely been steady.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Maruti E‑Vitara Launch: Make in India, Make for the World…
- Prime Minister Modi kick‑started production and global dispatch of Maruti Suzuki’s e‑Vitara EV with a “Make in India, Make for the World” pitch.
- It marks India’s ascent as a global EV manufacturing hub while bolstering local EV infrastructure and Japan‑India industrial synergy.
- Suzuki is investing INR 70,000 crore (~US$8 billion) over 5–6 years and targeting 50k to 1L units of EV exports each year.
US Foods Is Setting the Stage for Robust Growth With Pronto
- US Foods Holding Corp. reported a solid second quarter for fiscal year 2025, exhibiting positive momentum across various strategic pillars.
- The company delivered a record adjusted EBITDA of $548 million, showcasing a 12% year-over-year increase and achieving an adjusted EBITDA margin of 5.4%, marking a 40-basis-point expansion.
- This growth was driven by disciplined cost management, strategic vendor initiatives, improved operational efficiency, and robust performance across its customer segments, particularly independent restaurants, healthcare, and hospitality sectors.
Meituan – Earnings Flash – Q2 FY 2025 Results
- Meituan’s Q2/25 performance was weaker than we had expected, with profitability plunging as irrational price competition in food delivery eroded margins (due to heightened courier incentives and aggressive marketing spend).
- The Q2 performance was also a stark contrast to the stronger than anticipated Q1 results, which included robust revenue growth (+18.1%) and a surge in profitability (operating profit: +102.8%) on the back of enhanced operational efficiency and operating leverage.
- While the Q2/25 development is of some concern, Meituan is clearly making strategic moves by absorbing short-term pain (through material investments in subsidies, marketing and incentives) to protect its commanding 60-70% share in the food delivery market.
Hyatt Hotels: Expansion of the Group Business Segment to Potentially Enhance Its Financial Profile!
- Hyatt’s second quarter of 2025 presented a mixed bag of strategic moves and operational results, demonstrating both growth opportunities and challenges.
- On the positive side, the company’s acquisition of Playa Hotels & Resorts and subsequent real estate sale for $2 billion are noteworthy, aligning with its asset-light strategy.
- The acquisition is expected to contribute significantly to management fees and earnings through Hyatt’s distribution platform by 2026.
Live Nation Entertainment Dominates Sponsorships With High-Impact Festival Partnerships; What’s Next?
- Live Nation Entertainment’s second quarter 2025 earnings pointed towards various aspects of its business and future prospects.
- A significant area of growth is its Latin America strategy, particularly with the OCESA partnership in Mexico and broader opportunities in Brazil and other Latin American markets.
- The company is optimistic about leveraging its capabilities in venue development, festival launches, and advancing Ticketmaster’s operations across the region, which remain relatively underdeveloped compared to North America.
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