In today’s briefing:
- 7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
- CK Hutch (1 HK): Back To Square One
- USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
- HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake
- China ETF Inflows & Implications: Central Huijin’s Huge Buying
- Abacus Storage (ASK AU): Kirsh/Public Storage Buck Market Volatility With NBIO
- HKBN (1310 HK): TPG Cashes In Early
- BWGI’s Tender Offer for Verallia
- Trial Purchase of Seiyu Creates New Japanese Retail Power
7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
- Today, Seven & I Holdings (3382 JP) reported full-year earnings. The FY2025 guidance looks OK. Not overly exciting. Optically, it falls short, but 7&i guidance includes York only for H1.
- The basic outlines of strategy in the Presentation are unchanged from the 6 March strategy report. The company seems convinced an IPO of SEI is a good thing. I’m underwhelmed.
- The company also announced that it would bring forward ¥600bn of its planned 6-year ¥2trln buyback program, and execute it this year. That’s good.
CK Hutch (1 HK): Back To Square One
- The irony is that CKH (1 HK)‘s Panama-port sale was probably prompted, at least in part, by a desire to get out of a situation which was becoming increasingly political.
- Instead, it has thrust the company right into the heart of it. And the share price has now given up all of its initial gains. And then some.
- After Panama’s Attorney General recently determined CK Hutchison’s concessions were unconstitutional, the Comptroller-General has now announced that an audit had found “many breaches” of the concession.
USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
- The original issues were discussed in depth in The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors (now unpaywalled). Hearings took place 24-26 March 2025.
- The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April.
- We don’t yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.
HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake
- China Mobile (941 HK) has entered a share purchase agreement to acquire TPG’s HKBN Ltd (1310 HK) shares and vendor loan note conversion shares by 28 November.
- On completion, TPG will be released from its irrevocable, which has a competing offer clause. China Mobile’s agreement signals its expectation that I Squared will launch a competing proposal.
- The agreement will not change I Squared’s approach as it would not negatively impact regulatory approvals (a key risk) or prevent it from meeting a 50% minimum tendering condition.
China ETF Inflows & Implications: Central Huijin’s Huge Buying
- Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
- Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
- There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.
Abacus Storage (ASK AU): Kirsh/Public Storage Buck Market Volatility With NBIO
- Ki Corporation and Public Storage (PSA US) together announced a NBIO, by way of a Scheme, to acquire all of the outstanding securities of Abacus Storage (ASK AU) not held.
- The indicative offer of A$1.47/stapled security is a 26.7% premium to undisturbed and ~8% discount to the latest NTA/security. Nathan Kirsh directly/indirectly holds a 59.47% stake in ASK.
- Trading at a gross/annualised spread of 6.9%/10.9%, assuming late Nov completion. That’s tight given timing risk, and terms not being firm.
HKBN (1310 HK): TPG Cashes In Early
- Back in December, China Mobile (941 HK) made a pre-conditional HK$5.23/share voluntary Offer for HKBN (1310 HK). The wild card is whether I Squared launches a counter-proposal.
- This transaction has no shortage of intriguing developments. Last month, MBK mysteriously converted its VLNs. Now TPG has entered into an SPA with Mobile to sell its 15.46% stake.
- IF I Squared were to make a counter-proposal, I doubt it would secure the necessary regulatory approvals. Evidently TPG is not waiting around to find out.
BWGI’s Tender Offer for Verallia
- BWGI proposes a voluntary tender offer at €30 per share (cum dividend), aiming for majority control without delisting, supported by the Moreira Salles family’s substantial financial capacity and credibility.
- BWGI’s offer, backed by a $26 billion family office, presents a credible liquidity event; however, valuation and DCF analysis suggest room for a higher bid or competing interest.
- Market volatility may increase investor preference for deal certainty, potentially improving acceptance of BWGI’s offer despite its modest premium over Verallia’s recent trading levels and long-term valuation benchmarks.
Trial Purchase of Seiyu Creates New Japanese Retail Power
- Until last year, Trial was a Kyushu-based discount FMCG retailer, that had just completed its IPO.
- Today, it is one of the largest FMCG retailers in the country having won the bidding to acquire Seiyu from foster care under KKR.
- This is a massive development that will pressure other rivals to step up in order to compete.
Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
Unlock all research summaries