In today’s briefing:
- Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder
- [Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
- HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
- PointsBet (PBH AU): Mixi Returns with a Revised Offer and a Potential Takeover Offer
- PointsBet (PBH AU): MIXI Bumps To A$1.20. Betr’s DD Continues
- KOSPI 200 Update: Market Moves After Lee Jae-Myung’s Victory
- IFBH Ltd Pre- IPO – Growth Driven by Coconut Water Products Amid High Concentration Risks
- Primo Global Holdings: A Bridal Business with Long Presence, Short on Performance
- [Li Auto Inc. (LI US, SELL, TP US$20) Earnings Review]: Key Question Is Still the New Model Launches
- Dollar Industries: Navigating Market Headwinds with Strategic Investments and Focus
Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder
- Toyota Industries (6201 JP) disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.
- While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation.
- The offer undermines minorities as it lacks split pricing for the Toyota Motor (7203 JP) and its affiliates’ shareholding and likely undervalues the significant real estate holdings.
[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
- 2wks ago I said “a deal could be announced near-term.” 2wks later we have a deal. But it is a bad deal for TICO minorities. Low price. Minimal transparency. Awful.
- But if you dig through deal structure and economics, it is worse than it looks. It takes digging to understand how bad, and they could tell you, but they won’t.
- The deal will take time. Things will be in limbo til then. And Toyota Group governance and capital allocation is conditional on this deal getting done, which is also bad.
HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
- The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
- The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
- The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.
PointsBet (PBH AU): Mixi Returns with a Revised Offer and a Potential Takeover Offer
- PointsBet Holdings (PBH AU) has disclosed a revised Mixi Inc (2121 JP) offer at A$1.20, a 13.2% premium to the previous A$1.06 offer and a 10.6% premium to last close.
- Due to Betr’s 19.9% stake, which can effectively block Mixi’s scheme, Mixi will consider an off-market takeover offer of A$1.20 with a 50.1% minimum acceptance condition.
- Mixi’s revised offer is superior to Betr’s if synergies are not factored in. While the Betr’s all-cash offer is equivalent to Mixi’s, it is subject to scale-back.
PointsBet (PBH AU): MIXI Bumps To A$1.20. Betr’s DD Continues
- Back on the 26th Feb, PointsBet (PBH AU), an Australian/Canadian online wagering platform, entered into a Scheme Implementation Deed with MIXI (2121 JP), at $1.06/share, a 27.7% premium to undisturbed.
- An approach from BETR Entertainment (BBT AU), PointsBet’s key rival, was initially rebuffed. On the 12th May, both parties subsequently entered into mutual due diligence after Betr finagled terms.
- MIXI has now bumped terms to A$1.20/share. The Scheme Meeting has been delayed to the 25th June. DD continues to be carried out by PointsBet and Betr.
KOSPI 200 Update: Market Moves After Lee Jae-Myung’s Victory
- Lee Jae-myung’s is projected to win the Presidential Elections in South Korea. The Democratic Party of Korea candidate said he wants to revive the economy and stabilize the stock market.
- At the moment of writing (around midnight Singapore time) the KOSPI 200 INDEX‘s reaction is positive, the futures are rising towards the most recent, last week highs (363).
- This is a quick review of our most recent KOSPI 200’s tactical setups, in light of the political news coming out of the polls.
IFBH Ltd Pre- IPO – Growth Driven by Coconut Water Products Amid High Concentration Risks
- IFBH (IFBH HK) is looking to raise at least US$100m in its upcoming HK IPO.
- IFBH specializes in ready-to-consume beverages and food, with a focus on coconut water and plant-based products.
- In this note, we talk about the company’s historical performance.
Primo Global Holdings: A Bridal Business with Long Presence, Short on Performance
- Primo Global (367A JP) will debut on the Tokyo Stock Exchange’s Standard Market on June 24, offering 6.5m shares, with pricing set after the June 9–13 book-building period.
- Despite decades in operation, Primo has shown slow domestic growth and limited international traction, raising doubts about its ability to scale meaningfully in the bridal jewelry market.
- With net debt at 50% of assets and over half its balance sheet in goodwill and intangibles, Primo faces material financial risk, especially in a rising interest rate environment.
[Li Auto Inc. (LI US, SELL, TP US$20) Earnings Review]: Key Question Is Still the New Model Launches
- Li Auto (LI) reported mixed results with C1Q25 revenue (2.9%)/2.5% vs. our est./cons., and non-GAAP net income (11%)/(3.7%) vs. our est./cons..
- We see two negatives going forward: (1) renewed price promotion started in March, (2) cautious remarks regarding prospects of BEV SUV launch in July.
- We maintain SELL on LI and TP of US$20 on cautious outlook.
Dollar Industries: Navigating Market Headwinds with Strategic Investments and Focus
- Dollar Industries (DOLLAR IN) reported modest revenue growth in FY25 amidst a challenging market, with strong emphasis on retail expansion and brand-building initiatives.
- Despite a de-growth in sales volume, strategic investments in exclusive brand outlets (EBOs) and a renewed focus on premiumization are crucial for long-term growth.
- The company’s resilience in maintaining margins despite volume pressures, coupled with its aggressive retail strategy, signals a potential turnaround as market conditions improve.
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