In today’s briefing:
- Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- Shinsung Tongsang (005390 KS): The Family Reloads At ₩4,100/Share
- Qualcomm’s Offer for Alphawave IP Group Plc
Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
- The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
- Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.
MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
- Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
- TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.
Shinsung Tongsang (005390 KS): The Family Reloads At ₩4,100/Share
- Back June last year, Yeom Tae-soon and family sought to take apparel manufacturer Shinsung Tongsang (005390 KS) private at ₩2,300, but fell short of the 95% delisting threshold.
- The family have returned to the well with a more respectable ₩4,100/share Offer, a 35.8% premium to undisturbed, and optically, a fair price. The family and related parties hold 83.87%.
- Should the family fall short of the 95% threshold, again, they may seek delisting through a comprehensive stock exchange.
Qualcomm’s Offer for Alphawave IP Group Plc
- The offer provides a 2.7% gross spread with a 7.7% annualized return, supported by board approval, firm structure, and high market-implied probability of success near 92%.
- Downside risk is significant if the deal breaks, but the structured offer, regulatory clarity, and low interloper risk support a small-to-moderate position in diversified event-driven portfolios.
- Further upside depends on unexpected bid competition, ticking fees, or faster-than-expected settlement; otherwise, the return is modest but acceptable in stable arbitrage environments.
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