Value Investing

Vladimir Dimitrov, CFA

Equity Bottom-Up

<ul><li>United Rentals continues to perform well as the risk of a recession grows.</li><li>The share price is not expensive as profitability and utilization rates remain strong.</li><li>United Renters remains a sold long-term opportunity, but near-term risks should not be ignored, but United Rental remains a selling long- term opportunity.</li></ul>

United Rentals continues to perform well as the risk of a recession grows.The share price is not expensive as profitability and utilization rates remain strong.United Renters remains a sold long-term opportunity, but near-term risks should not be ignored, but United Rental remains a selling long- term opportunity.

United Rentals: Be Mindful Of Short-Term Risks, But Don't Lose The Long-Term Focus

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.

Equity Capital Markets

Horizon Construction Development / Equity Capital Markets

Horizon Construction Development (1887128D HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a>/HCD, a subsidiary of <a href="https://www.smartkarma.com/entities/far-east-horizon-ltd" target="_blank" data-smartkarma-citation="entities:420:1" rel="noopener">Far East Horizon (3360 HK)</a>, has launched its HKEx listing at HK$4.52-4.80 per share to raise up to US$223 million.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/horizon-construction-development-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:100813" rel="noopener">Horizon Construction Development IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/horizon-construction-development-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:100922" rel="noopener">Horizon Construction Development IPO: The Bear Case</a>. </li>
<li>Our valuation analysis suggests that HCD is fully priced at the IPO price range. Therefore, we are inclined to pass on the IPO. </li>
</ul>



Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), has launched its HKEx listing at HK$4.52-4.80 per share to raise up to US$223 million.
We previously discussed the IPO in Horizon Construction Development IPO: The Bull Case and Horizon Construction Development IPO: The Bear Case. 
Our valuation analysis suggests that HCD is fully priced at the IPO price range. Therefore, we are inclined to pass on the IPO. 


Horizon Construction Development IPO: Valuation Insights

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a>/HCD, a subsidiary of <a href="https://www.smartkarma.com/entities/far-east-horizon-ltd" target="_blank" data-smartkarma-citation="entities:420:1" rel="noopener">Far East Horizon (3360 HK)</a>, is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.</li>
<li>In <a href="https://www.smartkarma.com/insights/horizon-construction-development-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:100813" rel="noopener">Horizon Construction Development IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.</li>
</ul>



Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
In Horizon Construction Development IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.


Horizon Construction Development IPO: The Bear Case

<ul>
<li>
<a href="https://www.smartkarma.com/entities/horizon-construction-development" target="_blank" data-smartkarma-citation="entities:35117:1" rel="noopener">Horizon Construction Development (1887128D HK)</a>/HCD, a subsidiary of <a href="https://www.smartkarma.com/entities/far-east-horizon-ltd" target="_blank" data-smartkarma-citation="entities:420:1" rel="noopener">Far East Horizon (3360 HK)</a>, is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.</li>
<li>HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost &amp; Sullivan.</li>
<li>The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.</li>
</ul>



Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost &amp; Sullivan.
The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.


Horizon Construction Development IPO: The Bull Case

<ul>
<li>The leader in rental equipment industry offers attractive returns, in spite of short-term risk of recession.</li>
<li>United Rentals' well thought out growth strategy has created an important competitive advantage.</li>
<li>High free cash flow allows the management to increase shareholder distributions, while also reinvesting back into the business, according to the company.</li>
</ul>


The leader in rental equipment industry offers attractive returns, in spite of short-term risk of recession.
United Rentals' well thought out growth strategy has created an important competitive advantage.
High free cash flow allows the management to increase shareholder distributions, while also reinvesting back into the business, according to the company.


United Rentals: This Capital Intensive Business Deserves Attention

United States

United Rentals, Inc., through its subsidiary, is an equipment rental company operating a network of locations in the United States and Canada.  The Company serves the construction industry, industrial and commercial concerns, homeowners, and other individuals.

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United Rentals (URI US)

United Rentals: Be Mindful Of Short-Term Risks, But Don't Lose The Long-Term Focus

United Rentals continues to perform well as the risk of a recession grows. The share price is not expensive as profitability and utilization rates...

Vladimir Dimitrov, CFA

Horizon Construction Development IPO: Valuation Insights

Our valuation analysis suggests that HCD is fully priced at the IPO price range. Therefore, we are inclined to pass on the IPO.

Arun George

Horizon Construction Development IPO: The Bear Case

The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and...

Arun George

Horizon Construction Development IPO: The Bull Case

The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating...

Arun George

United Rentals: This Capital Intensive Business Deserves Attention

High free cash flow allows the management to increase shareholder distributions, while also reinvesting back into the business, according to the...

Vladimir Dimitrov, CFA

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52-week Range

Market Cap (USDm)

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