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Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Tata Motors ADR
• Xiaomi Corp

• Unilever announced plans to separate its ice cream business into a separate publicly listed company (SpinCo), potentially via a spin-off transaction.
• Post separation, Unilever will focus on four core businesses: beauty and wellbeing, personal care, home care, and nutrition. The separation is expected to be completed by the end of 2025.
• The separation will allow Unilever to allocate capital and resources more efficiently towards higher growth categories with significant potential to scale.

• Nominal GDP grew 1.8% from 2012 to 2017, higher than the annual average over the past 33 years, in anticipation of an escape from deflation, but TOPIX gains have stalled.
• Nominal GDP from 2021 to 2023 will grow 3.8% per year, far above the average of the past 33 years, and the correlation with TOPIX is even higher.
• With average P/B showing little correlation with TOPIX after 2020, expanding nominal earnings without losing out to rising prices seems to be a more important factor for stock price appreciation.

• Jade Group has acquired Magaseek and will merge the online mall with its own fashion e-commerce platform, Locondo and hopes to create a growing rival to Zozo.
• Magaseek was founded by Itochu 20 years ago, and the deal underlines Itochu’s growing influence over Jade as a proxy for its ambitions in fashion e-commerce and distribution.
• However, Jade Group has seen little organic growth for its Locondo platform in recent years, and while its acquisitions have added scale, integration has been haphazard.

Melco Resorts and Entertainment (MLCO) announced yesterday that it is planning to issue USD 500 mn in 8NC3 notes. In addition, subsidiary Studio City has initiated a tender offer to repurchase up to USD 100 mn of the STCITY 6.0 ’25s. We view positively MLCO’s proposed bond issuance and the maturity extension of its credit facilities, as well as Studio City’s tender offer, as they demonstrate management’s proactive approach in managing the company’s debt maturities. The transactions will significantly reduce MLCO’s refinancing risk in FY 2025, as the company would have c. USD 1.5 bn of availability under its credit facilities that can be used to help repay the USD 1.0 bn MPEL 4.875 ’25s due in June 2025. Moreover, management has committed to prioritise debt reduction over dividend payments in FY 2024.

We view the price talk of 7.75-7.875% as fair.

• On the surface, FY23/12 consolidated OP -68% YoY, profit ATOP -53%, and FY24/12 initial guidance for a profit ATOP net loss may appear to indicate a challenging earnings environment.
• However, closer examination reveals steady earnings improvement, and the new MTP through FY26/12 targets recouping major overseas growth investments.
• The table below shows sequential improvement in the amount change YoY for Group EBITDA, OP and profit ATOP every quarter, with profits at all 9 levels posting YoY gains in the 4Q.

• Given that it has already been 6 months since I first bought Card Factory and the stock is currently trading only slightly above my average purchase price, I decided to send you guys a short and sweet thesis on why I believe $CARD.L is an attractive opportunity.
• Card Factory is a greeting card and other “celebration essentials” retailer operating primarily in the UK.
• What is unique about the Northern Europeans, particularly the British, is their habit of buying greeting cards. It is ingrained in their culture

• Decision to invest in Sleep Number Corporation (SNBR) due to cyclical downturn in mattress sector
• SNBR seen as potential opportunity for cyclical turnaround despite drop in stock value since COVID-19 peak
• SNBR targets older, affluent customers with high-end mattresses sold through physical stores; has maintained constant market share for past decade

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Kayou is looking to raise up to US$500m in its upcoming HK IPO.
• Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product.
• In this note, we talk about the not-so-positive aspects of the deal.

• Today, cram school operator Riso Kyoiku (4714 JP) and 20% owner real estate developer Hulic Co Ltd (3003 JP) amended their Capital and Business Alliance agreement. 
• Hulic will buy 25.5% of shares out in a Partial Offer at +43.5% vs last. Then post-tender, they will buy shares at last from the company to go to 51.%
• The founder will sell his 10%. The rest is interesting. It’s a high ROE high div stock. Some own it from higher. Pro-ration is tough to estimate. But we try.

• Riso Kyoiku (4714 JP) announced a partial tender offer and third-party allotment with Hulic Co Ltd (3003 JP), the largest shareholder. Hulic aims to make Riso Kyoiku a consolidated subsidiary.  
• The offer is for a maximum of 39.4 million shares (23.15% post-allotment ownership ratio) at JPY320 per share, a 46.8% premium to the undisturbed price (5 April).
• Irrevocable (from the founder and Chairman) represents a 9.26% post-allotment ownership ratio. The offer is light, but there is no minimum acceptance condition. 

• The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, Nippon Paper Industries (3863 JP). 
• The one likely inclusion is therefore Ryohin Keikaku (7453 JP). But there is more fun afoot with Fast Retailing (9983 JP) and Tokyo Electron (8035 JP). 
• The two stocks – of totally different sectors – interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns. 

• P N Gadgil Jewellers (1742652D IN) is looking to raise up to US$132m in its upcoming India IPO. The deal will be run by Motilal Oswal, Nuvama and BOB Capital. 
• P N Gadgil Jewellers (PNGJ from hereon) is an Indian organized jewellery player. According to Technopak, it is the second largest among prominent organized jewellery players in Maharashtra. 
• Its product offerings include traditional jewellery for special occasions such as weddings, engagements and festivities and modern and jewellery designs for everyday wear purpose, in gold, diamond, silver and platinum.

• Ace Hardware Indonesia (ACES IJ) results revealed a positive finish to 2023 and an optimistic outlook for 2024, with new store rollout and shorter promotion periods set to boost sales.
• ACES continues to roll out its new format stores and renovate existing stores with a positive result, with 20 stores expected to be renovated in 2024 and 15-20 new stores,
• The company has seen strong momentum in 2M2024 with +10% SSSG and remains confident about the outlook, with positive guidance for growth. Valuations remain attractive versus history. 

• Our NAV valuation suggests implied market cap of 1 trillion won or NAV per share of 15,983 won which is 11% higher than current price.
• Orion Holdings has attractive dividend yields and payouts. The company’s dividend yield increased from 4.1% in 2021 to 4.6% in 2022 and 5.1% in 2023. 
• The recent phenomenal performance of the movie Exhuma has resulted in a long-awaited revived positive sentiment on Showbox (which is 57.5% owned by Orion Holdings). 

• Kayou is looking to raise up to US$500m in its upcoming HK IPO.
• Kayou is a Chinese pan-entertainment product retailer of toys, with trading cards in particular as its core product.
• In this note, we talk about the positive aspects of the deal.

• Flowers Foods continued to show resilience in a challenging consumer environment in the fourth quarter and full year of 2023.
• The company’s brands gained unit and dollar share for the first time since Q1 2022.
• Dave’s Killer Bread was particularly noteworthy, reaching $1 billion in retail sales and growing unit volume by 10%.

• Freshpet Inc. delivered robust performance for the fiscal year 2023 and the fourth quarter, notching a significant growth in net sales and improving profitability.
• The management believes the pet food company reached an inflection point in its journey towards becoming a profitable business in the fresh/frozen segment of the pet food market.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Top Commodity Trader is Long Cocoa Pierre Andurand’s hedge fund bet on higher cocoa prices ahead of a massive surge last month, according to a Bloomberg article.
• Andurand said his firm expects cocoa-beans production globally to be down at least 18% on an annual basis, compared to most analysts’ expectations of 10-11%.
• “This means that we will finish the year with the lowest stocks-to-grinding ratio ever, and potentially run out of inventories late in the year,” he added.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We recently added Dream International (1126 HK). Read: Dream International (1126 HK): Dream Valuation of 3.7x PE and 12% Div Yield, >40% of Mkt Cap In Cash 

• Fu Shou Yuan’s 2023 performance was indeed not good, with negative growth in 23H2.Shanghai alone has limited market capacity.No matter how strong it is, it cannot drive the national market.
• Fu Shou Yuan has encountered difficulties in external expansion and M&A, so it chooses to increase dividends. However, this means the Company may have to say goodbye to high growth.
• The founder’s “past bad record” and uncertain business outlook hinder the upward potential of valuation, which requires a high margin of safety.It’s better bought at low price to collect dividends.

• ETF sale is pie in the sky if the dividend income from ETFs held by BOJ is used to cover the interest payments associated with lifting of negative interest rates.
• ETFs held by the Bank of Japan, which account for 7% of prime market capitalization, are actually reducing the number of actual tradable shares and hindering trading liquidity.
• Furthermore, ETFs held by BOJ, which don’t indicate their intention to be shareholders, may be voting in favor of the company’s proposal as new silent shareholders in place of cross-shareholdings.

• In March 2024, BYD’s Sales volume increased by 46% YoY and Li Auto’s sales volume increased by 39% YoY.
• AliPay announced that foreigners’ consumption amount in China in March was ten times of last year.
• Facing stagnancy and competition, Alibaba’s Taobao removed service charges from its retailers.

• Murakami to tender stake in JSR Corp (4185 JP)? Maybe the “double arb”: i.e. short on swap, long on cash, will tender the cash, remain short the back end.
• Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)‘s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
• If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.

• The Boston Beer Company’s Fourth Quarter 2023 Earnings revealed an operational performance meeting the midpoint of their forecast, with depletions down by 6% for the year and gross margins achieving an improvement of 120 basis points.
• However, net loss for the quarter indicated challenges, standing at $18.1 million, or $1.49 per diluted share.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• The Simply Good Foods Company achieved financial results that were in line with their estimates for the fiscal first quarter that ended on November 25, 2023.
• The company reported an increase in its net sales by 2.6% to $308.7 million, propelled by the continuous momentum from its Quest range.
• The 40-basis point increase in the gross margin, which improved to 37.3%, was attributed mainly to lower ingredient and packaging costs.

• L’Occitane (973 HK) announced two solid moves this week:  1) Disposing the 70% stake in Grown Alchemist;
• And 2) granting additional call options to Sol de Janeiro CEO Heela Yang of up to 7%.
• The stock is trading at 19x FY25 PE (fiscal year ending March), up from just 14x six months ago.

• After flagging a proposed delisting exercise last month, direct seller Best World International (BEST SP) has announced an Exit Offer lead by Best World founders Dora Hoan and Doreen Tan.
• The Offer Price is S$2.50/share, a 42.86% premium to undisturbed. The Offer requires approval from 75% of disinterested shareholders. Hoan, Tan and concert parties holding 65.12%, are required to abstain.
• Best World shares resumed trading on November 2022 after 42 months of suspension, subsequent to media reports and a short seller raising regulatory concerns over its Chinese business model.

• Kura Sushi US Weighting as of writing: 4% 5th April 2024 – Q2 FY24 Results On April 4th, Kura Sushi US reported earnings for the second quarter of FY24.
• Nothing major to report and similar themes to previous quarters so will keep this one short. The market valuation is astronomically stupid.
• Average unit volumes at Kura are $4.28 million and have improved significantly; up 22% since 2019.

• BellRing Brands Inc. has reported the results from their first quarter ending fiscal year 2024.
• These results have come out better than the management’s expectations, with net sales increasing by 19% in comparison to the previous year.
• The company’s adjusted EBITDA also showed considerable growth, rising by 18%.

• Reynolds Consumer Products managed to maintain strong growth in Q4 2023, raising its share in some of its largest categories, including household foil and waste bags, achieving record profits, and boosting its cash flow.
• This was driven by double-digit profit growth across its various businesses.
• The operational stability of its Reynolds Cooking business has been restored and it has returned to historical earnings.

• While more companies should include the cost of capital in their disclosures, investors are demanding that management present specific solutions discussed by the board of directors to solve their company’s problems.
• Many companies with high foreign shareholding disclose their own management strategies, while companies without high foreign shareholding tend to lack the ability to think of measures to increase profitability.
• The TSE’s newly established department supports such companies to ensure that all listed companies are not left behind, but that seems to go against the quality of the market.

• Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
• A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
• Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. 

• Best World International (BEST SP) has disclosed an exit offer through selective capital raising and delisting. The offer of S$2.50 is a 42.9% premium to the undisturbed price of S$1.75. 
• The key conditions are approval for the selective capital reduction (at least 75% of eligible shareholders) and delisting resolution (a majority holding not less than 75% in value).
• The headcount test is a risk. The offer is light as only 66.7% of retained earnings will be distributed and the consideration will be covered 1.6x by the net cash.

• Crizac is looking to raise US$120m in its upcoming India IPO. The bookrunners on the deal are Equirus and Anand Rathi.
• Crizac is an education platform offering international student recruitment solutions to global institutions of higher education in the United Kingdom, Canada, Republic of Ireland, Australia and New Zealand (ANZ).
• Crizac is one of the largest student recruitment solutions providers from India to the UK with a market share of 13.0%, in terms of the number of students in 2023.

• After a solid FY23, Anta Sports Products (2020 HK)‘s outlook for FY24 looks equally encouraging. Its various brands are expected to grow by 10-30% YoY still.  
• Listing of Amer Sports (AS US) will provide Rmb1.6bn non-recurring gain in 1H24. For the full year, there will be a positive swing in its profit contribution. 
• Anta Sports can be considered as a sportswear brand incubator, and its premium PERs of 18.3x and 15.9x for FY24 and FY25 reflect the ability to brew new brands. 

• Papa John’s International, Inc. reported another year of record global system-wide sales for the fourth consecutive year of positive North America comps in 2023.
• The company’s success is attributed to the dedication and focus of its team, franchisees, and the restructuring efforts, especially the foundation improvements to restaurant operations, menu amelioration with novel products, the digital advancements of their operations platforms, and the expansion of the restaurant footprint.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• We believe consensus has not fully captured the company’s margin upside for FY24/25, likely due to management’s excessively conservative guidances.
• Our confidence is underpinned by positive SSSG trend, accelerating store expansion and clear trajectory for store margin improvement.
• We expect the company to generate RMB150/320 million adjusted net profit for FY24/25 respectively, compared to RMB30/150 million baked in consensus. Reiterate buy with HK$80 target price (30x FY25 earnings).  

• Arcos Dorados Holdings Inc., also known as “Golden Arches,” recorded a strong performance for the full financial year and fourth quarter of 2023, supported by the company’s 3D’s strategy – Digital, Delivery, and Drive-thru.
• This strategy emphasizes expanding digital sales using mobile apps and self-order kiosks, which have quickly penetrated every market.
• Arcos Dorados also emphasized delivery sales and modernizing its restaurants to improve customer experience.

• Post Holdings began fiscal 2024 with a strong first quarter, with manufacturing performance, pricing and cost management aiding in growth momentum.
• Diverse channel, product, and price point offerings have allowed the company to weather various volume fluctuations.
• Although volume decreases were observed in branded retail businesses, Foodservice remained strong with shifts toward value offerings and positive momentum in their Refrigerated Retail business.

• Sprouts Farmers Market’s 4th Quarter 2023 Earnings demonstrated a decent performance.
• Positives include a 7% sales growth for the year while maintaining a stable margin, as well as a 19% increase in their adjusted diluted earnings per share.
• The company’s focus on specialty positioning in order to provide quality, differentiated, and healthy food products appears to be paying off, as indicated in the results.

• Calavo, a key player in the avocado industry, is currently experiencing a minor turnaround
• The investment thesis is based on “information arbitrage” and potential growth in earnings and share price
• Despite previous short write-ups, the focus now is on Calavo’s near-term turnaround rather than industry issues

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• It is somewhat unusual that there is still a spread of over 5%. This likely reflects concerns about the relatively high intensity of allocation risk.
• Retail: 30%, Institutions: 16% of float shares (46%). Retailers may contribute 20%, institutions 10-15%. Total tender rate: 30-35%.
• In that case, it means that roughly 70% of our holdings could be tendered. And at this level, it seems reasonable enough to target the current spread of 5%.

• With no stocks in outright inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June.
• Capping changes will result in a one-way turnover of 5.3% leading to a round-trip trade of US$1.51bn.
• Li Auto (2015 HK) is expected to be the largest buy in June following the stock being the largest sell at the March rebalance (also due to capping).

• On 3 April, it was reported that Hyundai G.F. Holdings will be conducting a tender offer of 3 million shares of Hyundai Home Shopping (25% of outstanding shares). 
• The tender offer price is 64,200 won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025. 
• We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings.

• Aditya Birla Fashion and Retail Ltd (ABFRL IN) on 1st April announced a vertical demerger and separate listing of its matured and asset-light Madura brand portfolio.
• Assessment of demerger: whether it is seriously a value creation opportunity or just a strategic gimmick for merger-demerger in Mega Bull Run.
• Valuation of Aditya Birla Fashion and Retail Ltd (ABFRL IN) , whether any juice left in the company?

• Nongfu Spring (9633 HK) announced a set of strong 2023 results last week, with 2H23 net profit up 62% yoy and sales up 33% yoy. 
• The best performing category in 2023 has been tea beverage products (30% of sales), which grew 83% yoy for the year and 105% yoy in 2H23, picking up speed.
• Nongfu Spring is trading at 33x 2024 earnings, which I believe is attractive. 

• Q1 Deliveries trailed plunging market consensus, my even lower number, and Tesla’s expectations as sales crashed while it overproduced to a new record cumulative excess inventory which jumped 70% y/y
• This doesn’t square with Tesla’s explanation that sales were hurt by ongoing production issues—much like when the company used the same excuse for the disappointing Q3 2023. 
• This time deliveries were much lower, the miss versus market expectations much worse, and the deep well of unsold inventories even more formidable.

• Oriental Watch (398 HK)  has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).
• As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.
• The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property. 

• Century Communities has reported its Q4 and Full-Year 2023 results, which demonstrated notable growth and profitability.
• The company’s Q4 deliveries hit a record high of 3,157 homes, reflecting a 9% year-on-year increase, and the year 2023 marked the firm’s 21st consecutive year of profitability.
• The housing market also witnessed considerable improvement, contributing to the company’s success.

• D.R. Horton is a leading homebuilder with high returns on equity and strong balance sheets, yet trades at a low price-to-earnings ratio.
• The company has shifted to being asset-light, generating significant free cash flow and maintaining a strong balance sheet.
• With a focus on market share expansion and efficiency, D.R. Horton is positioned as a growth company in a stable industry.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The essence of the declining birthrate problem is the increasing number of young people who aren’t getting married, but the government has been mismatched in focusing support on married couples.
• Since the reasons for unwillingness to marry are “financial reasons” for men and “limitation of activities and time” for women, along with increased income, child-rearing and housework shouldn’t burden women.
• Companies should shift to business model that allows them to raise profit margins without resorting to cost-cutting, raise employee salaries, and create work environment that supports child-rearing and family responsibilities.

• Midea Group Co Ltd A (000333 CH) posted strong 4Q23 results, with net profit up 18% yoy and sales up 10% yoy. 
• In terms of 2024 outlook, management targets a 5-10% yoy growth in both the top and bottom line. 
• The stock is has rerated up to 12x 2024E earnings, compared to an average of 13x over the last 10 years. 

• We like Dream International (1126 HK), the plush toy maker listed in HK for its long-term association with Disney and revenue growth profile (12% CAGR over 15 years).
• The 15-year ROE has averaged 18%, and the company currently has 40% of the market capitalization (1.3 bn HKD) in net cash on the balance sheet. 
• Trading at 3.7x FY23 PE, with a 12% dividend yield (and the company’s high likelihood of maintaining a payout ratio), this is an idea worth exploring.

• Spirits were high as we attended the TCL Electronics (1070.HK ) (“TCL”) investor conference last Thursday (28 March) at the Shangri-La in Hong Kong, following its after-market earnings release.
• The results topped our own expectations in some areas, which we outlined in our recent write-up on the Company .
• We decided to summarize the results, as well as management insights shared at the conference for added context.

The second full year of Greggs’ five-year growth plan to double revenue by FY26 should be marked down as very successful, especially so given the challenging external environment. Unlike many consumer-facing companies, high selling price inflation was accompanied by volume growth, leading to good market share gains. The consumer is responding well to new initiatives to grow revenue in new dayparts and digital channels. Profitability was well-managed with better recovery of input cost inflation than FY22. We look for more of the same in FY24, which will be a significant year from a capital investment perspective, and beyond.

• VIC has featured HGV multiple times, with the latest update in April 2021
• Stock price has remained stagnant, but potential upside of over 100% in next 2-3 years
• HGV became independent in 2017, acquired Diamond Resorts International in August 2021, and Bluegreen Vacations in November 2023, becoming the largest timeshare operator

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• A couple of years ago, Rakuten (4755 JP) – burning through cash to start its mobile business – announced it would its Bank and Securities units. Bank listed. Securities didn’t.
• Mizuho ended up buying 49% of Securities. Today, it was announced there would be discussions to put Bank, Securities, Card, and Insurance in a new listed Holdco.
• How this works will end up being complicated. More complicated than it should be. But the complexity would make this more of a win-win for everyone. 

• Isetan Singapore (ISET SP) disclosed privatisation through a scheme of arrangement from Isetan Mitsukoshi Holdings Ltd (3099 JP) at S$7.20 per share, a 153.5% premium to the last close.
• The high takeover premium reflects the fair value of investment properties of S$300.4 million, i.e., S$7.28 per share, marginally above the offer price.
• The offer is attractive and 2.1% higher than the all-time high. The vote should comfortably get up. The scheme meeting is from early to mid-July. 

• In this insight, we discuss numerous gap trades involving Korean preferred and common shares in 2Q 2024.
• Although the discount on the preferred shares versus the common shares has been gradually narrowing in the past decade, this discount increased from end of 2021 to 1 April 2024.
• On a longer timeframe (3-4 years), we believe this discount could narrow further to the 20-25% range, which provides additional opportunities for the Korean preferred shares to further make gains.

• Isetan Mitsukoshi Holdings Ltd (3099 JP), the controlling shareholder of department store operator Isetan Singapore (ISET SP), is offering $7.20/share, by way of a Scheme.
• That’s a whopping 153.5% premium to last close. And a 178.9% premium to ISET’s NAV (as at 31 Dec 2023). 
• Apart from Mitsukoshi’s 52.73% stake, no other shareholder has >5%. This is a done deal. But why the large premium?

• Tencent Music Entertainment Group (TME) posted robust results in its fourth quarter and full year 2023 earnings call.
• Increasing subscribers and expedited revenue growth were notable positives, taking the total number of subscribers to the 100 million milestone due to the company’s focus on content leadership, platform value, and offering a high-quality user experience.
• Yet, the company also faced some headwinds, particularly in the social entertainment business.

• Market structure is the main factor hindering trading liquidity. In addition to the cross-holdings that remain, ETFs held by the Bank of Japan cast a shadow over trading liquidity.
• Companies are key on this issue. In addition to accelerating to reducte cross-shareholdings, English-language disclosure of annual securities reports, which are in high demand by long-term investors, should be promoted.
• If long-term overseas investors get serious about investing in Japanese equities, the increase in trading liquidity in Japanese equities will be sustainable, and broker coverage will naturally expand.

• This is our first report on Polestar.
• The company saw their highest-ever delivery volume for the Q3 2023 period.
• The said period witnessed record deliveries of 13,976 vehicles, representing a growth of 51% compared to the same period in the previous year.

• Delta Djakarta (DLTA IJ) came out with subpar FY23 results, with revenues/profits down 5%/13% YoY with a loss of marketshare to Multi Bintang Indonesia (MLBI IJ) 
• Q4 2023 showed an improvement, with revenues/profits up 1.5%/4% YoY, breaking a sequence of three consecutive quarters of negative growth.
• Trading at 13x FY23 PE with 25% of the market cap in cash and 9-10% dividend yield, the stock is worth exploring, although we prefer Multi Bintang Indonesia (MLBI IJ) 

• This is our first report on Nordstrom, Inc., a company that has captured the market’s attention given the recent rumors of a takeover offer from the founding family.
• The company’s fourth quarter results delivered revenues of $4.3 billion and an earnings per share of $0.96, an improvement over the previous year.
• Importantly, 2023 results met or exceeded company guidance.

• Group 1 Automotive presented solid performance in the fourth quarter of 2023 through all lines of business, reaching a total revenue of $17.9 billion, marking the highest for the company and attaining a record of total gross profit exceeding $3 billion.
• Though the company reported $131.2 million in adjusted net income, it is clearly driven by the parts and service gross profit, which amounted to $1.2 billion.This is our first report on retail player, the Kohl’s Corporation.
• The company’s Fourth Quarter 2023 Earnings showed a mix of positives and negatives in terms of the company’s financial performance and future outlook.

• Chinese outbound travel demand continued to recover nicely in February
• Major airlines’ decision to slow capacity rebuild now looks very prudent
• But the airlines have underperformed, surprisingly; Buy Trip.com below US$43

• Centurion Corp (CENT SP) is the leading light in purpose workers’ accommodation in Singapore and Malaysia, with high occupancy rates and healthy rental reversions, with a long-term secular growth backdrop.
• The company is also involved in purpose-built student accommodation in centres of excellence for education including the UK, Australia, and the US in a highly sought-after asset space.
• The outlook for both worker and student accommodation looks positive for the coming two years. Valuations look attractive with Centurion Corp trading at a 56% discount to NAV.

• Characteristic of companies TSE introduced as good disclosure examples is that they include more companies with a high foreign ownership and those that pay relatively close attention to cash allocation.
• Not all companies that are good examples have increased their valuations noticeably compared to before TSE market restructuring, but TSE has chosen them based on the content of their initiatives.
• These companies didn’t create their cash allocation policies abruptly, but had more opportunities to think through cost of capital, return on capital and stock price through engagements with overseas investors.