In today’s briefing:
- Meituan Index Flows Clarifications on the Tencent Distribution; Prosus Comments on Its Holdings
- Suzuki (7269 JT) | Ex-Maruti Valuation Now NEGATIVE
- Shiseido: International Cosmetics Brands Sent Packing by Chinese Rivals
- Skymark IPO – Ready For Takeoff
Meituan Index Flows Clarifications on the Tencent Distribution; Prosus Comments on Its Holdings
- Days after the Tencent (700 HK) announcement about its planned distribution of the bulk of the Meituan (3690 HK) shares it owns, the Hang Seng Index team clarified index treatment.
- It will be treated in HS Indices as a “listed non-cash distribution” for Tencent. There is theoretically wiggle room on the Meituan side, but it appears it will follow JD.com.
- That means Meituan selling on 4 January at the close, limbo for two months, then Meituan buying. Full model below.
Suzuki (7269 JT) | Ex-Maruti Valuation Now NEGATIVE
- Suzuki is our top pick in the auto sector in Japan as a key beneficiary of strong demand for autos in India
- Suzuki reported better-than-expected 2Q earnings – but the stock price has not reacted
- Suzuki remains mispriced. Suzuki’s market cap is negative if we strip out the value of Maruti
Shiseido: International Cosmetics Brands Sent Packing by Chinese Rivals
- The success of domestic brands in the low-cost cosmetics segment seems to be cascading into mid and high-price segments within the Chinese cosmetics market.
- This could be bad news for Shiseido Company (4911 JP), whose investors are expecting the company to maintain its historical superiority in the Chinese cosmetics market.
- We think that there’s a good chance for FY+2 EV/OP to return to the 12-20x range once the market price-in Shiseido’s weakening competitive position in the mainland China market.
Skymark IPO – Ready For Takeoff
- Skymark will be re-listing following a successful turnaround under the guidance of ANA and Integral.
- Listing proceeds will mainly be directed towards improving the fuel efficiency of its fleet.
- Skymark offers an attractive play on reopening in Japan as it is geared into the simpler domestic market where elevated cargo rates and revenue per passenger are not downside risks.
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