In today’s briefing:
- [Japan M&A] Toyota Inds (6201) – Process ALWAYS Bad, Price Bad To Worse; Easily Worth ¥20k+
- Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (1 Dec)
- Criticism of Shareholder Proposals from Activist Investors Is a Comforting Word for Management
- Choice Hotels Reveals What’s Inside Its Bold Global Expansion Strategy!
- Meituan (3690 HK): 3Q25, Discount Campaign Not Ended After Authorities Warned Twice
- Taste Gourmet (8371 HK) H1 FY26 Earnings: 6.8x PE with 8.6% Yield, Cash Now 31% of Market Cap
[Japan M&A] Toyota Inds (6201) – Process ALWAYS Bad, Price Bad To Worse; Easily Worth ¥20k+
- In April there was a story suggesting Toyota Group would buy out Toyota Industries (6201 JP). In June, they announced a deal. It was a BAD DEAL.
- The price was low, but it was BAD governance because it was the WRONG DEAL. TICO’s Board declared a valuation fair for a deal not announced, ignoring the ACTUAL DEAL.
- The valuation? Assumed no changes to the business. Actual deal? Sell 90+% of net assets driving 50% of net income, buy back 24+% of shares at discount.
Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (1 Dec)
- Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
- Highlights: Currently twelve pair trade opportunities across four markets and five sectors persist.
- Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.
Criticism of Shareholder Proposals from Activist Investors Is a Comforting Word for Management
- Of foreign shareholding in 30% range, 1% is held by activist funds. Meanwhile, the cross-shareholding is around 10%, and ETFs held by BoJ account for 7% of TSE market capitalization.
- Passing shareholder proposals remains difficult, as conditions must align: a company must have fairly high foreign ownership, and its conduct must be bad that domestic institutions can endorse the proposal.
- Claiming that “shareholder proposals from activist investors often target short-term profit-seeking initiatives” merely serves as a comforting excuse for executives who are postponing management challenges.
Choice Hotels Reveals What’s Inside Its Bold Global Expansion Strategy!
- Choice Hotels International’s recent earnings call provides an intricate overview of the company’s financial performance and strategic initiatives during the third quarter of 2025.
- The company reported a 7% increase in adjusted EBITDA, reaching $190 million, primarily driven by an enhanced brand mix and increased business from small and medium enterprises and group bookings.
- However, the positive financial performance was countered by a flat global RevPAR compared to the prior year, with a notable dip of 3.2% in the U.S. market owing to softer government and international inbound demand.
Meituan (3690 HK): 3Q25, Discount Campaign Not Ended After Authorities Warned Twice
- Meituan (MT)’s revenue growth rate plummeted to 2% YoY in 3Q25.
- The discount campaign has not actually ended after the authorities warned twice.
- We expect that MT’s price has a downside of 30% in the next twelve months.
Taste Gourmet (8371 HK) H1 FY26 Earnings: 6.8x PE with 8.6% Yield, Cash Now 31% of Market Cap
- Taste Gourmet (8371 HK) reported H1 FY26 results of Revenues/Pat 11.8% YoY/17.8%YoY. Profits were in line with our expectations as the company reined in costs and showed slight margin improvements.
- Cash continues to pile on the balance sheet, with 242 mn HKD of net cash representing >30% of market capitalization. The company paid an 8-cent semi-annual dividend.
- The stock trades at a 6.8x PE for FY26e, has an 8.6% dividend yield, and plans to grow at a CAGR of at least 15%.
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