In today’s briefing:
- Hitachi Transport (9086 JP): STILL Trading Too Wide
- Sanrio – Hello Kitty and Kuromi Characters to Expand in China But Valuations Remain Lofty
- Sanrio: The Market Is a Bit Too Excited About The Licensing Agreement With Alifish
- Yamato Builds Courier Ecosystem
Hitachi Transport (9086 JP): STILL Trading Too Wide
- Overnight we got news that the EU had cleared the purchase of Hitachi Transport System (9086 JP) by the KKR bidco.
- What started as an expected five-month process to gain regulatory clearances should now be down to two months. Risk arb is trading wide, but this is an “easy” deal.
- Now trading at 10% annualised to the cash-out date implied by a 30-Sep start date, this is a “good risk.”
Sanrio – Hello Kitty and Kuromi Characters to Expand in China But Valuations Remain Lofty
- On 30 June 2022, Sanrio reached a five year licensing deal with Alifish, which will cover Sanrio’s cast of popular characters including Hello Kitty and Kuromi in China.
- In July 2020, Shintaro Tsuji (founder of the company) handed over control of Sanrio to his 31 year old (as of 2020) grandson Tomokuni Tsuji.
- Despite the longevity of Hello Kitty as well as the recent partnership with Alifish (Alibaba’s subsidiary) to expand its business in China, we remain concerned with Sanrio’s lofty valuation multiples.
Sanrio: The Market Is a Bit Too Excited About The Licensing Agreement With Alifish
- Sanrio (8136 JP) , the company behind Hello Kitty, has bounced 12% since striking a deal with Alibaba’s IP licensing platform Alifish to produce and sell merchandise of 26 characters.
- This seems like a way to combat copyright infringements. However, we are sceptical that this agreement could stop cheap counterfeits from entering the market.
- Sanrio badly needs a revival. However, history is not on the company’s side as they have been trying to revive the business over the last 20 years.
Yamato Builds Courier Ecosystem
- Yamato Transport is Japan’s largest courier service, owning nearly 50% share, but even the biggest player needs to race to keep up with booming demand for e-commerce.
- Over the past six years, it has gradually built an ecosystem of online tools and physical infrastructure to help vendors and customers, importing knowhow when needed.
- So far, these measures have helped it stay on top of spiralling demand but there remain pressures.
💡 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
