Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Refocusing a business takes time, especially when it involves replacing legacy systems, renegotiating framework agreements, integrating numerous acquisitions and rebuilding the balance sheet. The process becomes even more challenging if it coincides with weak market conditions and a significant level of geopolitical uncertainty. Dustin Group’s management is actively addressing these challenges, including a rights issue announced with its results. The business is well positioned, leaving investors with one key question: when is the right time to buy? We believe the next six months may provide the answer.

Refocusing a business takes time, especially when it involves replacing legacy systems, renegotiating framework agreements, integrating numerous acquisitions and rebuilding the balance sheet. The process becomes even more challenging if it coincides with weak market conditions and a significant level of geopolitical uncertainty. Dustin Group’s management is actively addressing these challenges, including a rights issue announced with its results. The business is well positioned, leaving investors with one key question: when is the right time to buy? We believe the next six months may provide the answer.

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. </li>
<li>
<a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops</li>
<li>A residual <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (9432 JP)</a> individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. </li>
</ul>


The Naspers (NPN SJ) / Prosus (PRX NA) circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile. 

Swire Pacific (19 HK) was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops
A residual NTT (9432 JP) individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn't mean much, but it's an interesting artefact. 


Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>On 27 June, Axel Johnson said it had crossed the 30% threshold and would launch a mandatory offer for all shares of <a href="https://www.smartkarma.com/entities/dustin-group-ab" target="_blank" data-smartkarma-citation="entities:22346:1" rel="noopener">Dustin Group AB (DUST SS)</a> at SEK 28.5/share</li>
<li>Axel Johnson doesn't seem particularly interested in completing a takeover, rather being able to increase its stake after offer completion. The offer document isn't even available in English.</li>
<li>The offer represents -4.2% to 1-month VWAP,  0.31x EV/Fwd sales (vs. 0.66x average since IPO). I wouldn't get involved unless the share price drops below SEK 28.5.</li>
</ul>


On 27 June, Axel Johnson said it had crossed the 30% threshold and would launch a mandatory offer for all shares of Dustin Group AB (DUST SS) at SEK 28.5/share
Axel Johnson doesn't seem particularly interested in completing a takeover, rather being able to increase its stake after offer completion. The offer document isn't even available in English.
The offer represents -4.2% to 1-month VWAP,  0.31x EV/Fwd sales (vs. 0.66x average since IPO). I wouldn't get involved unless the share price drops below SEK 28.5.


Axel Johnson/Dustin Group AB: Mandatory Offer

Sweden

Dustin Group AB offers IT products and related services to businesses, governments and individuals. The Company sells computers, printers, copiers, tablets, mobile phones and other electronics and accessories.

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