IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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

On 31 July 2019, <a href="https://www.smartkarma.com/entities/essilor-international" target="_blank" data-smartkarma-citation="entities:21443:1" rel="noopener">Essilor International (EI FP)</a> announced an agreement to acquire HAL’s 76.72% stake in <a href="https://www.smartkarma.com/entities/grandvision-nv" target="_blank" data-smartkarma-citation="entities:21114:1" rel="noopener">GrandVision NV (GVNV NA)</a> for €28 per share, to be increased by 1.5% to €28.42 if the closing does not occur within 12 months from the announcement date i.e. 31 July 2020. After the transaction has closed, EssilorLuxottica will launch a mandatory cash public offer at the price per share paid to HAL. <div class="content-highlight">The spread averaged 2.0% from 31 July 2019 to 13 March 2020 but increased to a high of 57.7% on 18 March. The spread exploded due to a combination of high market volatility and concerns that the transaction will not meet completion conditions. Overall, we believe that the transaction risk is low. The gross spread currently sits at 17%. The annualised spread is 55% for 31 July 2020 completion and 25% for year-end completion.   </div>

On 31 July 2019, Essilor International (EI FP) announced an agreement to acquire HAL’s 76.72% stake in GrandVision NV (GVNV NA) for €28 per share, to be increased by 1.5% to €28.42 if the closing does not occur within 12 months from the announcement date i.e. 31 July 2020. After the transaction has closed, EssilorLuxottica will launch a mandatory cash public offer at the price per share paid to HAL. The spread averaged 2.0% from 31 July 2019 to 13 March 2020 but increased to a high of 57.7% on 18 March. The spread exploded due to a combination of high market volatility and concerns that the transaction will not meet completion conditions. Overall, we believe that the transaction risk is low. The gross spread currently sits at 17%. The annualised spread is 55% for 31 July 2020 completion and 25% for year-end completion.   

EssilorLuxottica/GrandVision Attractive Spread

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from JPY6,101 a share. While Hoya operates a solid business with good long-term growth potential, we believe, the company is presented with a strong opportunity to grow its earnings over the next 2-3 years driven by its Electronics business, EUV blanks and glass substrates in particular.Hoya is the largest supplier of mask blanks for EUV lithography which has just entered into mainstream production. In addition, we expect the process node migration to continue to drive demand for EUV mask blanks as further miniaturisation of semiconductor chips is not possible without EUV.Hoya has been the only supplier of glass substrates for HDDs and with growing data center capex and increased demand for large data storage, the HDD makers will switch to glass from aluminium and other materials which are currently being used. We expect this to offer growth in earnings for the segment. On the other hand, we expect Hoya’s Life Care business to remain solid and contribute to earnings.

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from JPY6,101 a share. While Hoya operates a solid business with good long-term growth potential, we believe, the company is presented with a strong opportunity to grow its earnings over the next 2-3 years driven by its Electronics business, EUV blanks and glass substrates in particular.Hoya is the largest supplier of mask blanks for EUV lithography which has just entered into mainstream production. In addition, we expect the process node migration to continue to drive demand for EUV mask blanks as further miniaturisation of semiconductor chips is not possible without EUV.Hoya has been the only supplier of glass substrates for HDDs and with growing data center capex and increased demand for large data storage, the HDD makers will switch to glass from aluminium and other materials which are currently being used. We expect this to offer growth in earnings for the segment. On the other hand, we expect Hoya’s Life Care business to remain solid and contribute to earnings.

2020 High Conviction: EUV Mask Blanks, Glass Substrates for HDDs Drive Next Phase of Growth for Hoya

France

EssilorLuxottica manufactures eyewear. The Company offers sun glasses, lenses, and other eye care products. EssilorLuxottica serves customers worldwide.

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EssilorLuxottica (ESLOY US)

EssilorLuxottica/GrandVision Attractive Spread

On 31 July 2019, Essilor International (EI FP) announced an agreement to acquire HAL’s 76.72% stake in GrandVision NV (GVNV NA) for €28 per share,...

Arun George

2020 High Conviction: EUV Mask Blanks, Glass Substrates for HDDs Drive Next Phase of Growth for Hoya

We have been covering Hoya for close to a year and the company’s share price has rallied 71% over the last 12-months to JPY10,450 a share from...

Shifara Samsudeen, FCMA, CGMA

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