IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a> disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.</li>
<li>While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.</li>
<li>The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  </li>
</ul>



Japfa Ltd (JAP SP) disclosed privatisation through a scheme of arrangement from the Santosa family at S$0.62 per share, a 34.8% premium, to the undisturbed price of S$0.460.
While the offer is attractive compared to historical share price ranges, it is light compared to peer and historical multiples.
The offer has not been declared final. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail ownership minimises the vote risk.  


Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Equity Bottom-Up

Charoen Pokphand Indonesia / Equity Bottom-Up

<ul><li>CPIN booked a lower 3Q24 net profit of Rp619bn (-52% yoy, -41% qoq), dragged by lower DOC and LB margin; yet 9M24 earnings were in line. </li><li>3Q24 net profit was supported by resilient revenues and tax gains but was partly offset by losses in changes in fair value of biological assets.</li><li>We maintain our Buy rating with a TP of Rp6,400 (unch.), reflecting a 30/26x FY24/25F PE ratio.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CPIN booked a lower 3Q24 net profit of Rp619bn (-52% yoy, -41% qoq), dragged by lower DOC and LB margin; yet 9M24 earnings were in line. 3Q24 net profit was supported by resilient revenues and tax gains but was partly offset by losses in changes in fair value of biological assets.We maintain our Buy rating with a TP of Rp6,400 (unch.), reflecting a 30/26x FY24/25F PE ratio.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Charoen Pokphand Indonesia - Compressed Margin in 3Q24

<ul><li>CPIN booked 4Q23 net losses of Rp357bn, surpassing 4Q22’s net losses of Rp257bn driven by a lower feed margin and poultry business losses.</li><li>Despite the inline FY23 operating profit, we trim our FY24/FY25F net profit forecasts by -9/-5% on lower other income.</li><li>We downgrade our rating to Hold with a TP of Rp5,200 based on 15.4x FY24F EV/EBITDA (-1SD of 5-year avg), implying 29/21x FY24/FY25F PE.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CPIN booked 4Q23 net losses of Rp357bn, surpassing 4Q22’s net losses of Rp257bn driven by a lower feed margin and poultry business losses.Despite the inline FY23 operating profit, we trim our FY24/FY25F net profit forecasts by -9/-5% on lower other income.We downgrade our rating to Hold with a TP of Rp5,200 based on 15.4x FY24F EV/EBITDA (-1SD of 5-year avg), implying 29/21x FY24/FY25F PE.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Charoen Pokphand Indonesia (CPIN IJ) - FY23 Results: Another Year with a Negative Ending

<ul>
<li>On March 8, <a href="https://www.bloomberg.com/news/articles/2024-03-08/top-asia-poultry-firm-japfa-owners-said-to-mull-go-private-deal?embedded-checkout=true" target="_blank" rel="noopener">Bloomberg reported</a> that <a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a> owners were considering taking it private and started talks about a loan of around US$150 million. </li>
<li>Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years. </li>
<li>An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.  </li>
</ul>


On March 8, Bloomberg reported that Japfa Ltd (JAP SP) owners were considering taking it private and started talks about a loan of around US$150 million. 
Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years. 
An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.  


Japfa (JAP SP): Evaluating a Potential Privatisation

<ul><li>CPIN booked robust 3Q23 net profits of IDR1.3tr, supported by higher gross revenues of IDR30tr despite flat q-o-q margins amid rising feed raw material costs.</li><li>We raised our FY23/24F net profit estimates by 16/12% and maintain our BUY recommendation on the stock with a higher TP of Rp7,200.</li><li>9M23 earnings above expectations on strong downstream performance. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CPIN booked robust 3Q23 net profits of IDR1.3tr, supported by higher gross revenues of IDR30tr despite flat q-o-q margins amid rising feed raw material costs.We raised our FY23/24F net profit estimates by 16/12% and maintain our BUY recommendation on the stock with a higher TP of Rp7,200.9M23 earnings above expectations on strong downstream performance. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Charoen Pokphand Indonesia (CPIN.IJ) - 3Q23 Earnings Beat from Solid Downstream Business

Indonesia

PT Charoen Pokphand Indonesia Tbk is a leading Indonesian company primarily engaged in the poultry and egg production industry. It manufactures and sells poultry feed, day-old chicks, and processed chicken products under various brands, and also operates in food processing, preservation of meat, and animal pharmaceutical products. The company was founded on July 2, 1972, and is headquartered in Jakarta, Indonesia.

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Charoen Pokphand Indonesia (CPIN IJ)

Japfa (JAP SP): Santosa Family’s S$0.62 Scheme Offer

The offer is arguably light. However, the irrevocable, the lack of a disinterested shareholder holding a blocking stake and moderate retail...

Arun George

Charoen Pokphand Indonesia - Compressed Margin in 3Q24

3Q24 net profit was supported by resilient revenues and tax gains but was partly offset by losses in changes in fair value of biological assets.

BRI Danareksa Research