Daily Brief Consumer: VGI PCL, Guming Holdings, SHEIN, WH Group, Foshan Haitian Flavouring & Food Company, Daily Journal, TSE Tokyo Price Index TOPIX, Ferrari N.V. and more

• The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
• In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in June 2025.
• Currently, we see three expected changes. However, since the reference period is yet to start, the rankings can fluctuate significantly before the base date.

• Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, has launched an HKEx IPO to raise up to US$202 million.
• We previously discussed the IPO in Guming Holdings (Good Me) IPO: The Bull Case and Guming Holdings (Good Me) IPO: The Bear Case.
• There are five cornerstone investors. Our valuation analysis suggests that Guming is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

• SHEIN (1895674D HK) returns to India after a five-year hiatus under a license agreement with Reliance Industries (RIL IN) owned Reliance Retail ltd.
• India’s vast, untapped market for fast fashion, driven by a large and growing young population, rising disposable incomes, and increased e-commerce penetration presents an attractive growth opportunity for Shein.
• Shein faces growing challenges in the US due to new trade restrictions. Its partnership with Reliance could serve as a strategic move to develop alternative supply chains outside China.

• After reducing the IPO price, and the placement size, WH Group (288 HK) has now completed the spin-off of Smithfield Foods (SFD US).
• Preceding my comments on the WH Group are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Foshan Haitian Flavouring & Food Company (FHF HK), the largest condiment company in China, is seeking an H-share IPO in Hong Kong. 
• It has established brand recognition and leadership positions, product innovation and diversification, opportunities from industry consolidation, and steady earnings with net cash.
• Assuming a 28% HA discount, the same as the HS Stock Connect, this implies an FY25 PER of 23.2x. Versus Kikkoman Corp (2801 JP)‘s 23.8x, this seems not attractive enough. 

• Lack of transparency and inadequate financial disclosures at Daily Journal Corporation
• Detailed analysis suggests the stock is severely overvalued
• Significant downside risk for investors in DJCO

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Dividends are still the mainstay of shareholder returns, but shareholder returns, including share buybacks, became a standard “P/B raising measure,” which is why share buybacks increased on a company-by-company basis.
• Share repurchases increased significantly this year as large cross-holding share dissolutions were undertaken through share repurchases. Share buybacks will continue increasing due to share repurchases for dissolution of cross-shareholdings.
• Companies that have been reluctant to retire treasury stock are finally moving to do so. This is expected to be a change of the companies.

• Ferrari N.V. (RACE US) reported Q4 FY24 revenue and earnings growth of 14% and 32%, exceeding analyst profit estimates by 14% due to improved product mix and pricing.
• Management provided conservative guidance for FY25, projecting baseline revenue and EPS growth of 5% and 2% YoY, consistent with Ferrari’s conservative historical approach to guidance.
• The stock trades at 47x FY25 PE and 26x EV-EBITDA. With 81% repeat customers and 48% multiple owners, Ferrari is expected to sustain pricing power and grow high-margin revenues.