In today’s briefing:
- Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
- China Meidong: Back the Porsche at 20 HKD
- Delhivery IPO: Offering Details & Index Inclusion Timeline
- Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
Yamada Denki – GINORMOUS Buyback To Dramatically Boost EPS and ROE
- Yamada Denki (9831 JP) reported earnings (Revs -7.6% (slight beat), OP -28.6% (slight miss), NP -2.4% (slight miss)), and slightly upbeat forecasts to Mar-2023 (Revs +4.6%, OP +12.5%, NP +2.9%)
- They also announced an unchanged dividend at ¥18/share, and a VERY BIG BUYBACK. This is one of the largest, most aggressive, on-market buyback programs I have ever seen.
- Previous buybacks have been duds. Yamada Denki is not playing around this time. This time it will be a buy.
China Meidong: Back the Porsche at 20 HKD
- China Meidong Auto (1268 HK) trades at a 12x/9x PE FY22/23E with a 6.5% dividend yield at a 20 HKD/share price (assuming an 80% payout ratio).
- In buying China Meidong Auto (1268 HK), you get an industry leader in the dealership space with supreme execution (35% ROE/47% CAGR profit growth/best capital allocator).
- The integration of the Starchase Porsche Dealerships provides an upside potential, as the management, with their superior track record, can significantly improve the target’s operations.
Delhivery IPO: Offering Details & Index Inclusion Timeline
- Delhivery (1058656D IN) is looking at raising INR 52,350m (US$685m) in its IPO by selling up to 113.3m shares at a range of INR 462-487/share.
- At the mid point of the IPO range, Delhivery (1058656D IN) will be valued at INR 344.8bn (US$4.5bn) while the free float market cap will be much lower.
- Delhivery (1058656D IN) could get entry to the FTSE All-World Index at the December QIR, while inclusion in the MSCI India Index could take place at the May 2023 SAIR.
Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
- Yashili International Holdings (1230 HK) has announced a pre-conditional Offer, by way of a Scheme, from China Mengniu Dairy Co (2319 HK).
- The cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price, is in line with the 16 March announcement.
- Conditions involve various business disposals and the exit of Danone SA (BN FP)‘s stake in Yashili; yet apart from timing, which is contingent on regulatory approvals, this looks done.
Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
- The review cutoff for the FTSE All-World/All-Cap June QIR is 11 May. The changes to the MSCI indices for the May SAIR will be announced on 13 May Asia time.
- The review period for the KOSPI2 INDEX, KOSDAQ 150 Index, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX and the SENSEX INDEX ended last week and there are changes.
- ETF inflows were larger than outflows for nearly all Asian markets. The largest inflows were in the Hang Seng H Share Index ETF (2828) and Vanguard Aust Shares Etf (VAS).
Before it’s here, it’s on Smartkarma