In today’s briefing:
- Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering
- Toyoda Gosei Placement – Somewhat Expected but Relatively Large with Delayed Buyback
- Smart Share (EM US): On Stonewalling Hillhouse’s Offer
- Oriental Watch (398 HK) H1 FY26: Maintaining A 12% Yield With 60% Of Market Cap In Cash
- Ulta Beauty Vs CJ Olive Young (Let the Rumble Begin)!
- JD.com (9618 HK / JD US): Top Option Trades Reveal Strong Bearish Sentiment
- Decoding Asian Paints Execution Supremacy Amidst New Competition
- US: 19 IPOs Forecasted for Index Addition in December 2025
- Sa Sa Intl (178 HK): Positive Trend Beyond the Results
- Formosa Prosonic: Special Dividend of 80 Cents
Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering
- Toyoda Gosei (7282 JP) has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).
- Toyoda Gosei’s primary goal with the secondary offering is to reduce Toyota Motor (7203 JP)‘s shareholding to around 20% of outstanding shares.
- The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.
Toyoda Gosei Placement – Somewhat Expected but Relatively Large with Delayed Buyback
- Toyota Motor (7203 JP) and Sumitomo Mitsui Financial Group (8316 JP) plan to raise around US$700m via selling down some of their stake in Toyoda Gosei (7282 JP).
- The deal is a large one to digest at over 20% of the company and 90 days of ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Smart Share (EM US): On Stonewalling Hillhouse’s Offer
- After seven months had elapsed since receiving a preliminary non-binding proposal, Smart Share Global (EM US) announced on the 1st August a firm Offer (an MBO) had been entered into.
- The Offeror consortium, led by Mars Guangyuan Cai, Chairman and CEO, is offering US$1.25/ADS, a 74.8% premium to last close; but ~20% below net cash + short-term investments.
- Hillhouse upped the ante with a US$1.77/ADS NBIO. The share price hasn’t closed below US$1.25/share since; but the reason may not just hinge on Hillhouse firming its Offer.
Oriental Watch (398 HK) H1 FY26: Maintaining A 12% Yield With 60% Of Market Cap In Cash
- Oriental Watch (398 HK) maintained its dividend yield of ~12% (annualized), declaring 20.8 HKD cents of dividend for H1FY26. Cash and Investments were ~ HKD1 billion (60% of market cap).
- The company highlighted that the environment is challenging, given trade wars and tempered HK/Chinese demand. On our conservative numbers, the stock trades at 8.6x FY26PE.
- Oriental Watch (398 HK) will maintain its high dividend payout ratio of ~100%. Over the past 8 years, the company paid dividends of 3.8 HKD/share (> the current share price).
Ulta Beauty Vs CJ Olive Young (Let the Rumble Begin)!
- In this insight, we discuss how Olive Young is likely to be a serious long-term threat to Ulta Beauty (ULTA US) (market cap of US$22.3 billion) in the United States.
- CJ Corp is the largest shareholder of CJ Olive Young. On 19 November, CJ Olive Young announced that it plans to open its first store in California in May 2026.
- There is a growing probability that CJ Olive Young could successfully grow its business in the US, especially due to the continued strong demand for Korean cosmetics.
JD.com (9618 HK / JD US): Top Option Trades Reveal Strong Bearish Sentiment
- Context: Over the past few trading days, JD.com (9618 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
- Highlights: Strategies tend to have a short-term horizon, with approximately 40% of all strategies employing weekly options. Bearish views dominate with almost 70% of strategies being put spreads.
- Why read: This Insight breaks down complex option strategies and sheds light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,
Decoding Asian Paints Execution Supremacy Amidst New Competition
- Asian Paints achieved a 7-quarter high in Q2FY26 with 10.9% domestic volume growth, driven by easing raw material costs and strategic integration, leading to a 2% margin expansion.
- Despite heavy monsoons, strong execution drove a double-digit volume rebound, signaling stabilized consumer demand. This coupled with a key competitor’s executive loss, validates the firm’s defensive market position.
- Asian Paints’ strong performance deserves a premium valuation but justifying it hinges on the perfect execution of its backward integration project and defending its competitive position.
US: 19 IPOs Forecasted for Index Addition in December 2025
- All eligible US IPOs that went public from 1 August to 31 October will get added to a major US index in December 2025.
- The largest forecasted IPO additions in terms of market cap are Bullish US (BLSH US), FT Intermediate (FIGR US) and Fermi (FRMI US).
- The largest forecasted IPO additions in terms of passive fund impact include Legence (LGN US), Via Transportation (VIA US) and Avidia Bancorp (AVBC US).
Sa Sa Intl (178 HK): Positive Trend Beyond the Results
- Sa Sa International Hldgs (178 HK)‘s 1H FY25/26 profit came in at the top-end of the guidance. Its 3Q sales growth has so far increased 11.3%, a further acceleration.
- Hong Kong and Macau should capture some of the diverted traffic as Sino-Japanese relations soured, while a weaker USD, as rates are cut, should make shopping cheaper.
- With its ROE reaching 10-13% in FY26-28F (the best ones since FY21), its 5-year-low P/B multiple makes the stock a bargain.
Formosa Prosonic: Special Dividend of 80 Cents
- Formosa Prosonic announced an 80-cent Special Dividend as the management decided to return excess cash
- 3rd quarter results showed EPS of 7.92 cents, though there is a gain on the sale of PPE of 35% of profits
- Management but given the stock trading below cash we remain positive on the stock
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This report has been prepared by Vriddhi Consulting, founded by Punit and Debjani Khanna. A portion of the research was contributed by Shubham Khanna, an individual on the autism spectrum. We are grateful to Smartkarma for providing a platform to share this research and amplify its impact.
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