In today’s briefing:
- Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk
- Vesync (2148 HK): Trading Wide Ahead Of The Scheme Vote
- La Nina-triggered Floods Make Serious Dent In Thai Rubber Production
- HK-Listed Apparel & Footwear Screener: Parsing Lever Styles (1346 HK) Profit Alert
- Weekly Update (APTV, MRP, MEDXF, AAF, WDC)
- Korea Small Cap Gem #32: Pulmuone
- SSI Weekly Newsletter: Portfolio Exits, Strategic Updates and Key Developments
- Whirlpool Corporation: An Insight Into Its Tariff & Market Dynamics! – Major Drivers
- Seeing Disappointing Disclosures Raises Question of What Was the Skill Matrix of Board Directors?
- Fu Shou Yuan (1448 HK) – The Special Dividend Beat Expectations, but Concerns Remain
Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk
- On 27 December 2024, Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.
- Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition.
- The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.
Vesync (2148 HK): Trading Wide Ahead Of The Scheme Vote
- Back on the 27th December, Vesync (2148 HK), a manufacturer of small home appliances, announced an Offer, by way of a Scheme, from the Yang family controlling ~69.04% of Vesync.
- The Cancellation Price of $5.60/share, declared final, was a 33.3% premium to undisturbed, and above the 2020 IPO price of HK$5.52/share.
- The US anti-trust condition has now been fulfilled. The Scheme Doc dispatch has been extended to the 11 April. I estimate payment under the Offer late May.
La Nina-triggered Floods Make Serious Dent In Thai Rubber Production
- Rubber production in December suffers a loss of 30%
- Yokohama Rubber plays Good Samaritan in hour of crisis
- CMO enabling FSC Certification for Thai rubber for EUDR
HK-Listed Apparel & Footwear Screener: Parsing Lever Styles (1346 HK) Profit Alert
- We reviewed Lever Style’s (1346 HK) positive profit alert and project a final dividend of 7-7.5 cents, an increase from 3 cents per share in H1 FY24.
- The overall dividend of 10-10.5 cents indicates a yield over 9%, with positive remarks on new customer additions and increased penetration within the existing customer base.
- Our top sector picks include JNBY Design Ltd (3306 HK) and Pacific Textiles (1382 HK), with a favorable mention of Nameson Holdings (1982 HK) due to its attractive dividend yield.
Weekly Update (APTV, MRP, MEDXF, AAF, WDC)
There were no new spin-off announcements this week, but I’ve done some more work on the Aptiv (APTV) spin-off announcement.
Aptiv PLC (APTV), an automotive technology supplier, announced on January 22, 2025, that it plans to split into two distinct companies.
Aptiv will spin-off its electrical systems business. The RemainCo will concentrate on technological components, including sensor-to-cloud solutions and autonomous driving software.
Korea Small Cap Gem #32: Pulmuone
- Pulmuone has benefited from improved sales and profitability of its US subsidiary, driven by higher demand for Korean foods and plant based/non-meat based foods such as tofu.
- The company has nearly 70% market share in the tofu segment in the US. It has gained meaningful economies of scale of its tofu product in the United States.
- Pulmuone currently has a market cap of 390 billion won. Using the consensus net profit estimate of 37.6 billion won, this would suggest a P/E of 10.3x.
SSI Weekly Newsletter: Portfolio Exits, Strategic Updates and Key Developments
- Benson Hill exited after a +100% share price spike, despite a 38% loss; concerns over cash and buyout proposal persist.
- Marlowe position closed with a 23% return; buybacks had no impact on share price, concerns over future decline.
- DMC Global faces conflict with Steel Connect over valuation and acquisition proposals; Arcadia’s former president returns.
Whirlpool Corporation: An Insight Into Its Tariff & Market Dynamics! – Major Drivers
- Whirlpool Corporation’s fourth-quarter 2024 performance exhibited both areas of progress and challenges.
- The company acknowledged that while their financial outcomes have not fully met expectations, they have made strides in operational efficiency and portfolio transformation.
- Notably, the completion of the Europe transaction marked a significant transition in creating value opportunities.
Seeing Disappointing Disclosures Raises Question of What Was the Skill Matrix of Board Directors?
- With about 40% of companies having a P/B of less than 1x, the problem is that many disclosures do not understand management to create value and increase the stock price.
- It’s difficult for investors’ voices to reach small cap companies and companies with still high defensive walls of cross-held shares, which are not easily targeted for investment by institutional investors.
- Independent directors should be appointed with skillset to participate in developing management plans and scrutinize them for reasonableness and whether the projected corporate value is gapped from that of investors.
Fu Shou Yuan (1448 HK) – The Special Dividend Beat Expectations, but Concerns Remain
- The special dividend actually exceeded investors’ expectations. As long as the dividend yield is higher than the risk-free rate, then Fu Shou Yuan is worth holding for the long term.
- Fu Shou Yuan’s 2024 full-year performance could fall short of expectations. As the business model is not as excellent as previously imagined, long-term growth rate would fall to single digit.
- Since high valuation is unsustainable without the support of strong future growth momentum, investors who pursue for capital gains could consider taking profits by taking advantage of share price rally.
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