In today’s briefing:
- Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
- SONY (6758) | Going into Earnings
- Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung
- Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China
- Ebay’s Qoo10 Surges on K-Style Boom
- [Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales
- Ginebra San Miguel (GSMI PM) Q1 2025: Steady Pricing Led Growth
- TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?
- Nihon Chouzai (3341 JP): Full-year FY03/25 flash update
Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
- Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
- As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
- If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.
SONY (6758) | Going into Earnings
- Content-Driven growth: Strong performance in music and gaming supports Sony’s shift toward high-margin content, insulating it from trade and macro headwinds.
- Upcoming catalysts: Spin-off of Sony Financial and potential restructuring could unlock value and address the long-standing conglomerate discount.
- Attractive valuation: Trading at 14x EV/EBIT with defensive sector exposure, Sony remains undervalued relative to global peers despite YTD outperformance.
Lee Myung-Hee Transfers All of Her 10.2% Stake In Shinsegae to Her Daughter Chung Yoo-Kyung
- On 30 April, Lee Myung-Hee (Chairwoman of Shinsegae Group) decided to transfer all of her 10.2% stake in Shinsegae (004170 KS) as a gift to her daughter Chung Yoo-Kyung.
- After this gift, Chung Yoo-Kyung’s ownership in Shinsegae will rise from 18.95% to 29.16%.
- We are positive on this share transfer of 10.2% stake in Shinsegae from mother (Lee Myung-Hee) to her daughter Chung Yoo-Kyung on the share price impact on Shinsegae.
Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China
- Kayou Inc., early-mover in the trading card industry in China, filed for an IPO in Hong Kong. The company sells trading cards, toys, figures, badges, pens, and notebooks, among others.
- Kayou Inc. received capital of ~$135M from HongShan Capital and Tencent Holdings in 2022. Mr. Li Qibin founded trading card and collectible toy firm in 2011.
- Founder led company has delivered 250%+ growth and FCF of $500M+ in 2024. The market opportunity is large enough to support sustained high growth for Kayou for several years.
Ebay’s Qoo10 Surges on K-Style Boom
- Qoo10 is tiny in comparison to Amazon, Rakuten and Yahoo but it punches well above its weight by specialisation.
- The online mall’s focus on Korean cosmetics and lifestyle has given it a depth of loyalty among young women that was once the preserve of Zozo.
- Along with its other platform Move, Ebay Japan has built a solid presence in the Japanese market which looks set to continue to expand.
[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales
- Luckin reported C1Q25 revenue in-line/6% vs. our estimate/consensus, and non-GAAP operating profit 9%/75% higher than our estimate/consensus, thanks to warmer weather and constrained marketing spending;
- Despite Luckin pre-emptive lock-ins, rising coffee bean price shall still take its toll as Luckin’s biggest rival Starbucks should be equally capable of managing the commodity price risk.
- We keep Luckin as BUY rating but cut TP to US$39.
Ginebra San Miguel (GSMI PM) Q1 2025: Steady Pricing Led Growth
- Ginebra San Miguel (GSMI PM) reported steady growth in Q1 2025, with revenues and profits increasing by 7.6% and 10.8% YoY. Volume/Pricing grew 1%/6.6% YoY as company offset excise-duty increases.
- EBITDA margins were maintained at 16.2%, while the company saw a massive increase in cash and investments to 16.2 bn pesos from 12.8 bn pesos, led by working capital inflows.
- Trading at 10x PE with 20% of the market cap in cash and investments, and demonstrating pricing power/profit growth of 10-15% CAGR, this is a name to explore.
TVS Motor Q4FY25 Review: Premium Valuation Backed by Strategic Execution or Investor Over-Optimism?
- Robust Operating Performance:TVS Motor (TVSL IN) reported 17% YoY revenue growth in Q4FY25 with EBITDA margins at 12.5% (ex-PLI) — stable despite input cost pressures.
- EV Momentum & Premium Product Strength: EV sales rose 54% YoY, and TVS continued to gain traction in the premium segment through its Apache and Ntorq models.
- Valuation Demands Flawless Execution:At 58x P/E TTM EPS,TVS commands a steep premium over peers.Justifying this requires sustained outperformance in EV adoption, export monetization, and premium product cycles without margin erosion.
Nihon Chouzai (3341 JP): Full-year FY03/25 flash update
- Sales increased by 5.9% YoY to JPY360.5bn, but operating profit decreased by 31.8% YoY to JPY6.2bn.
- Pharmaceutical Manufacturing faced a JPY630mn operating loss due to NHI drug price revisions and manufacturing deficiencies.
- FY03/26 forecasts sales of JPY372.8bn (+3.4% YoY) and net income of JPY3.5bn (+151.6% YoY).
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