Daily Brief Consumer: Toyoda Gosei, Mandom Corp, Raccoon Holdings, Inc., Anhui Xinhua Media Co Ltd A, Beijing Wkw Automotive Parts, Duolingo and more

• Since the announcement of the US$0.8 billion secondary offering, Toyoda Gosei (7282 JP)’s shares have declined 4.9% to the undisturbed price of JPY3,754 per share (20 November).
• It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Toyoda’s share decline is better than the median of recent large placements.
• The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.

• I tally 35 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Three new deals were  discussed on Smartkarma this week: Qube Holdings (QUB AU), Monash IVF (MVF AU), and National Storage REIT (NSR AU).
• Key updates/news also took place on: Iress Ltd (IRE AU), ANE Cayman Inc (9956 HK), Digital Holdings Inc (2389 JP), and Grindr (GRND US).

• Revenue increased by 2.7% YoY to JPY3.1bn, with EC business up 6.8% and Financial business down 2.6%.
• Operating profit decreased 7.3% YoY to JPY575mn, with a 2.4pp rise in GPM and 4.3pp increase in SG&A ratio.
• Financial business segment profit rose 7.2% YoY to JPY402mn, with external payments handled growing 11.2% YoY.

• Dominant state-owned enterprise in Anhui province with an extensive distribution network, particularly for educational materials, which provides a stable revenue base.
• Diversification into digital education, supply chain management, and other cultural segments offers new avenues for growth beyond traditional publishing.
• The company operates within a highly regulated industry, which creates significant barriers to entry for new competitors but also exposes it to policy risks and censorship.

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• Exceptional Profitability Growth Amidst Revenue Contraction: The company has demonstrated a remarkable ability to grow net income and EPS, with a 3-year CAGR exceeding 51%, despite a concurrent decline in revenues. This suggests a successful strategic shift towards higher-margin products, significant operational efficiencies, or divestiture of underperforming assets.
• Strategic Positioning for the New Energy Vehicle (NEV) Transition: Beijing WKW is actively investing in and expanding its product lines to include components for electric vehicles (EVs). This forward-looking strategy positions the company to capitalize on the rapid growth of the NEV market in China, which is the largest and fastest-growing in the world.
• Attractive Shareholder Returns and Valuation: The company exhibits strong value and dividend characteristics, underscored by high Smartkarma scores in these categories. A consistent dividend yield, which stood at 1.86% in the most recent fiscal year, combined with a reasonable valuation, presents an attractive proposition for value-oriented investors.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Duolingo’s third quarter results reflect both strengths and areas of potential concern for investors.
• The company continues to show robust daily active user (DAU) growth, with a stated 36% year-over-year increase for Q3.
• Current guidance projects nearly $1.2 billion in bookings by year-end with 33% growth and an adjusted EBITDA margin of 29%.