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Smartkarma Daily Briefs

Jan 29
0

Daily Brief Equity Bottom-Up: LG Energy Solution: Consensus Likely to Lower Sales and OP Estimates in 2023 and more

By | Daily Briefs, Equity Bottom-Up

In today’s briefing:

  • LG Energy Solution: Consensus Likely to Lower Sales and OP Estimates in 2023
  • Jabil Inc: Major Drivers
  • Kimberly-Clark Corporation: Major Drivers
  • Dropbox Inc: The FormSwift Acquisition & Other Drivers
  • Schlumberger NV: Major Drivers
  • Textron Inc: Major Drivers
  • Levi Strauss & Co: Major Drivers

LG Energy Solution: Consensus Likely to Lower Sales and OP Estimates in 2023

By Douglas Kim

  • On 27 January, LG Energy Solution provided financial and operational guidance for 2023.
  • We believe that the consensus is likely to reduce sales estimate by 3% and operating profit estimates by 10-15% in 2023.  
  • Out of the total of 3.4% of ESOP shares, about 0.5% to 1.5% of the shares could be sold in the first few weeks after the end of the lock-up. 

Jabil Inc: Major Drivers

By Baptista Research

  • Jabil’s Q1 performance was impressive and the company delivered an all-around beat which helped propel its stock price.
  • The company’s strength resulted in the quarter’s double-digit rise in revenue, core operating income, and core diluted profits per 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.

Kimberly-Clark Corporation: Major Drivers

By Baptista Research

  • Kimberly-Clark delivered a mediocre performance in the last quarter of 2022 as it failed to meet the revenue expectations of Wall Street.
  • Despite that fact, the company managed to get 1/3rd of profit from the international market in the last quarter.
  • The new products created by Kimberly-Clark in the last 3 years have contributed to 60% of the total sales growth in 2022.

Dropbox Inc: The FormSwift Acquisition & Other Drivers

By Baptista Research

  • Despite a series of macroeconomic challenges, Dropbox had a good last quarter and managed an all-around beat.
  • They also continue to return a sizable percentage of their free cash flow to shareholders through share repurchases.
  • Although they are experiencing moderate growth in their Sign business, it is important to set Dropbox Sign apart from conventional eSign solutions.

Schlumberger NV: Major Drivers

By Baptista Research

  • Schlumberger maintained its growth momentum throughout the fourth quarter, producing significant revenue growth and additional sequential and annual margin increase.
  • They had sequential revenue growth and margin expansion in North America and internationally.
  • On the other hand, exploration data sales, INNOVATION FACTORI, and AI solutions saw a significant increase in the digital sector.

Textron Inc: Major Drivers

By Baptista Research

  • Textron delivered a decent result in the last quarter with revenues of $3.6 billion which surpassed Wall Street expectations.
  • The company faced a strong demand, a strong pricing net of inflation, and a higher aftermarket volume in this quarter.
  • It was a quarter of strong customer demand and solid cash flow.

Levi Strauss & Co: Major Drivers

By Baptista Research

  • Levi Strauss had a successful fourth quarter with strong fiscal 2022 performance.
  • Levi Stauss managed to enhance its brand positioning and market share in the global market.
  • 40% of the company’s revenues came from outside of denim bottoms in this quarter.

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Jan 29
0

Daily Brief Thematic (Sector/Industry): China Healthcare Weekly (Jan.27) – Surgical Robots New Policy and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Healthcare Weekly (Jan.27) – Surgical Robots New Policy, COVID-19 Update, Policy Vacuum Period
  • Japan Weekly | Bullish Markets, Suzuki, Shin-Etsu
  • Sands China Ltd: Breakthrough to Profitability Is First Forerunner of Macau Recovery Cycle

China Healthcare Weekly (Jan.27) – Surgical Robots New Policy, COVID-19 Update, Policy Vacuum Period

By Xinyao (Criss) Wang

  • New policy was released to support the development of surgical robots in China, which would be short-term catalyst for related companies, but it may not bring high profits.
  • In fact, since March, it may not be appropriate for healthcare companies to use the COVID-19 as a reason if their performance in the following months is not as expected.
  • Before DRGs/DIP policy becomes very “lethal”, there is a “policy vacuum period” in the next two or three years, which is a good opportunity to go long in China healthcare.

Japan Weekly | Bullish Markets, Suzuki, Shin-Etsu

By Mark Chadwick

  • Global markets continued positive momentum on peaking in global inflation and expectations that the rate hike cycle is approaching its end
  • There is a slew of economic data next week and some major US tech company results announcements. Japanese earnings announcements get into full swing
  • Suzuki was the start performer last week as investors cheered the company’s new mid-term strategy and decarbonization plans

Sands China Ltd: Breakthrough to Profitability Is First Forerunner of Macau Recovery Cycle

By Howard J Klein

  • Revenues for 2022 just missed forecast, but enough to put the Macau market share leader over the top and into positive profit territory.
  • Indications during CNY show average bet of US$101 per hand clearly put premium mass play back in action with mass segment spurts evident during the holiday.
  • CNY arrivals hit 90,000 on Tuesday, best in three years. Current run rate now reaching 40% of pre-covid baseline 2019.

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Jan 29
0

Daily Brief Event-Driven: Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback and more

By | Daily Briefs, Event-Driven

In today’s briefing:

  • Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback
  • Names to Watch for Inclusion in MSCI Korea May Review
  • Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation
  • Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting
  • Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani
  • Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises
  • Weekly Deals Digest (29 Jan) – AAG Energy, Acotec, Xingda, Origin Energy, Tyro, Kanematsu, Toyo
  • Kanematsu Electronics (8096) – ¥6200/Share Tender Offer by Parent – Easy Takeout
  • (Mostly) Asia-Pac Weekly Risk Arb Wrap: Osstem, Warrego, Norwest Energy, Acotec, Sabana, Jafco, Toyo
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback

By Brian Freitas

  • The Adani Group stocks have taken a dive following the Hindenburg Research report. Group market cap is down more than US$47bn with company promoters taking the biggest hit.
  • The Adani Enterprises FPO is almost certain to be undersubscribed. MSCI, in an unprecedented step, is monitoring publicly available information and is seeking feedback from the investment community.
  • We find that the real float of some Adani Group stocks is much lower than the headline numbers and there could be selling if MSCI lowers the FIF.

Names to Watch for Inclusion in MSCI Korea May Review

By Sanghyun Park

  • Posco International‘s recent merger with Posco Energy increased the share count. The distance from the float market cap borderline is catchable, given the current share price uptrend.
  • Hanwha Aerospace will likely fail inclusion in this February review. The gap with the hurdle is not large, so it can aim for inclusion in the May review.
  • Among Outside IMI, Korea Gas is tricky as it is a FOL stock. MSCI-concluded float is 30%, and the gap with the float market cap hurdle is still quite large.

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

By Arun George

  • Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 

Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting

By Travis Lundy

  • Kanematsu Corp (8020 JP) announced two tender offers late Friday to take out minorities in subsidiaries. One larger, safer deal. One smaller, illiquid, but potentially interesting one.
  • This is the interesting one. It is being done at the wrong price, and it has investors who might care who have been long-time holders.
  • This could get interesting. You have a buyer. A target. It’s pretty clean except for shareholder structure. And the buyer has room to pay up. 

Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani

By Brian Freitas

Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises

By David Blennerhassett

  • Be long Kawasaki Kisen Kaisha (9107 JP) vs MOL and NYK. The shares are cheap on a forward basis. KLine is reducing the Real World Float, causing further potential squeeze.
  • Sabana Industrial REIT (SSREIT SP)‘s Partial Offer at 0.88x book is not overwhelming, but it is also not a control stake. It is probably priced near-right.
  • IF Osstem (048260 KS)‘s price were to go higher, it is conceivable there could be a bump, but don’t bet on it as long as the stock trades <KRW 190,000. 

Weekly Deals Digest (29 Jan) – AAG Energy, Acotec, Xingda, Origin Energy, Tyro, Kanematsu, Toyo

By Arun George

Kanematsu Electronics (8096) – ¥6200/Share Tender Offer by Parent – Easy Takeout

By Travis Lundy

  • Kanematsu Corp (8020 JP) announced two tender offers Friday to take out subsidiaries. One more liquid one. One very small sub. This is the larger, easier deal. 
  • Kanematsu Electronics is an IT shop, designing and executing system integration and maintenance services. It is a great business. The takeout is a 33% premium to an all-time high.
  • It might still be a bit cheap, but it is not egregious, and it would be quite difficult to block. 

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Osstem, Warrego, Norwest Energy, Acotec, Sabana, Jafco, Toyo

By David Blennerhassett

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

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Jan 29
0

Daily Brief Macro: Positioning Watch – Is This a Bear Market Rally or the Beginning of a Bull Run? and more

By | Daily Briefs, Macro

In today’s briefing:

  • Positioning Watch – Is This a Bear Market Rally or the Beginning of a Bull Run?
  • Europolitics Watch – A Continued European Surge?
  • Japan’s Corporate Balance Sheet Recession: Still Impacting Attitudes Towards Risk-Taking

Positioning Watch – Is This a Bear Market Rally or the Beginning of a Bull Run?

By Andreas Steno

  • Equity positioning remains very bearish despite the recent spike in price action
  • The EUR remains a crowded long in FX space, while the AUD and JPY are still short
  • The market continues to expect market rates to increase despite falling inflation 

Europolitics Watch – A Continued European Surge?

By Mikkel Rosenvold

  • European equities have seen an incredible start to 2023 on top of strong performance in late 2022.
  • But European manufacturing and tech finds itself under pressure from massive public investments in both the US and China.
  • What to make of the EU’s response and how is the outlook for Europe?

Japan’s Corporate Balance Sheet Recession: Still Impacting Attitudes Towards Risk-Taking

By Said Desaque

  • Despite Abenomics, Japan’s non-financial corporations have continued to hoard cash since 2005 to its current level of 44% of GDP.  Overseas investment has increased since 2005, indicating higher profitability.
  • Although share buybacks have surged in recent years, they remain significantly below US levels, but are arguably more sustainable due to high cash balances.
  • Japanese equities are cheap on a cross-border basis, but corporations’ shift to focus on shareholder value under Abenomics has not produced richer valuations.

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Jan 29
0

Most Read: Oriental Land, Kepco Engineering & Construction, Jb Financial Group, Adani Enterprises, Surya Esa Perkasa, Douzone Bizon, Adani Transmission, Kanematsu Electronics, Posco International Corporation, SenseTime Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End
  • Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
  • KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)
  • Adani Enterprises FPO Update:  Hindenburg, Anchors, and Righteous Indignation
  • IDX30/​​LQ45/IDX80 Index Rebalance: 4 Days to Implementation
  • KRX New Deal Index Rebalance Preview: Some Big Impact Names
  • Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback
  • Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation
  • Names to Watch for Inclusion in MSCI Korea May Review
  • Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani

Nikkei 225 Index Rebalance Preview (March): Potential Changes as Review Period Nears End

By Brian Freitas

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes

By Brian Freitas

  • Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
  • Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
  • Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.

KOSPI200 Index Rebalance: JB Financial (175330 KS) To Replace Meritz F&M (000060 KS)

By Brian Freitas

Adani Enterprises FPO Update:  Hindenburg, Anchors, and Righteous Indignation

By Travis Lundy

  • The Adani Enterprises (ADE IN) Further Public Offering (“FPO”) expected to raise Rs 200bn has its first leg publicly complete with anchor investors taking Rs 59.849bn. 
  • Noted shortseller Hindenburg Research published a long report suggesting Adani Enterprises and indeed the Adani Group were over-priced according to fundamentals and were the result of  a “con.”
  • Now the book build starts. Deal structure and Adani Group CFO comments continue to suggest that Liquidity is a Bug, not a Feature.

IDX30/​​LQ45/IDX80 Index Rebalance: 4 Days to Implementation

By Brian Freitas

  • There are 3 changes for the IDX30 Index, 6 changes for the LQ45 Index, and 7 changes for the IDX80 Index at the rebalance to be implemented on 31 January.
  • Largest passive inflows are expected to be on Sumber Alfaria Trijaya Tbk Pt (AMRT IJ) and Surya Esa Perkasa (ESSA IJ). 
  • With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.

KRX New Deal Index Rebalance Preview: Some Big Impact Names

By Brian Freitas

  • The review period for the March rebalance ends on 31 January, the changes will be announced towards end February and implemented at the close of trading on 9 March.
  • We forecast one add/delete for the Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
  • The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).

Adani Group: Hindenburg Report Spurs MSCI to Invite Feedback

By Brian Freitas

  • The Adani Group stocks have taken a dive following the Hindenburg Research report. Group market cap is down more than US$47bn with company promoters taking the biggest hit.
  • The Adani Enterprises FPO is almost certain to be undersubscribed. MSCI, in an unprecedented step, is monitoring publicly available information and is seeking feedback from the investment community.
  • We find that the real float of some Adani Group stocks is much lower than the headline numbers and there could be selling if MSCI lowers the FIF.

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

By Arun George

  • Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 

Names to Watch for Inclusion in MSCI Korea May Review

By Sanghyun Park

  • Posco International‘s recent merger with Posco Energy increased the share count. The distance from the float market cap borderline is catchable, given the current share price uptrend.
  • Hanwha Aerospace will likely fail inclusion in this February review. The gap with the hurdle is not large, so it can aim for inclusion in the May review.
  • Among Outside IMI, Korea Gas is tricky as it is a FOL stock. MSCI-concluded float is 30%, and the gap with the float market cap hurdle is still quite large.

Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani

By Brian Freitas

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Jan 29
0

Daily Brief Energy/Materials: Schlumberger Ltd and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • Schlumberger NV: Major Drivers

Schlumberger NV: Major Drivers

By Baptista Research

  • Schlumberger maintained its growth momentum throughout the fourth quarter, producing significant revenue growth and additional sequential and annual margin increase.
  • They had sequential revenue growth and margin expansion in North America and internationally.
  • On the other hand, exploration data sales, INNOVATION FACTORI, and AI solutions saw a significant increase in the digital sector.

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Jan 29
0

Daily Brief Industrials: Posco International Corporation, Kanematsu Nnk, Adani Enterprises, Hong Kong Hang Seng Index, Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Names to Watch for Inclusion in MSCI Korea May Review
  • Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting
  • Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
  • Textron Inc: Major Drivers

Names to Watch for Inclusion in MSCI Korea May Review

By Sanghyun Park

  • Posco International‘s recent merger with Posco Energy increased the share count. The distance from the float market cap borderline is catchable, given the current share price uptrend.
  • Hanwha Aerospace will likely fail inclusion in this February review. The gap with the hurdle is not large, so it can aim for inclusion in the May review.
  • Among Outside IMI, Korea Gas is tricky as it is a FOL stock. MSCI-concluded float is 30%, and the gap with the float market cap hurdle is still quite large.

Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting

By Travis Lundy

  • Kanematsu Corp (8020 JP) announced two tender offers late Friday to take out minorities in subsidiaries. One larger, safer deal. One smaller, illiquid, but potentially interesting one.
  • This is the interesting one. It is being done at the wrong price, and it has investors who might care who have been long-time holders.
  • This could get interesting. You have a buyer. A target. It’s pretty clean except for shareholder structure. And the buyer has room to pay up. 

Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises

By David Blennerhassett

  • Be long Kawasaki Kisen Kaisha (9107 JP) vs MOL and NYK. The shares are cheap on a forward basis. KLine is reducing the Real World Float, causing further potential squeeze.
  • Sabana Industrial REIT (SSREIT SP)‘s Partial Offer at 0.88x book is not overwhelming, but it is also not a control stake. It is probably priced near-right.
  • IF Osstem (048260 KS)‘s price were to go higher, it is conceivable there could be a bump, but don’t bet on it as long as the stock trades <KRW 190,000. 

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

Textron Inc: Major Drivers

By Baptista Research

  • Textron delivered a decent result in the last quarter with revenues of $3.6 billion which surpassed Wall Street expectations.
  • The company faced a strong demand, a strong pricing net of inflation, and a higher aftermarket volume in this quarter.
  • It was a quarter of strong customer demand and solid cash flow.

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Jan 29
0

Daily Brief Consumer: LG Energy Solution, Kimberly Clark, Levi Strauss & Co and more

By | Consumer, Daily Briefs

In today’s briefing:

  • LG Energy Solution: Consensus Likely to Lower Sales and OP Estimates in 2023
  • Kimberly-Clark Corporation: Major Drivers
  • Levi Strauss & Co: Major Drivers

LG Energy Solution: Consensus Likely to Lower Sales and OP Estimates in 2023

By Douglas Kim

  • On 27 January, LG Energy Solution provided financial and operational guidance for 2023.
  • We believe that the consensus is likely to reduce sales estimate by 3% and operating profit estimates by 10-15% in 2023.  
  • Out of the total of 3.4% of ESOP shares, about 0.5% to 1.5% of the shares could be sold in the first few weeks after the end of the lock-up. 

Kimberly-Clark Corporation: Major Drivers

By Baptista Research

  • Kimberly-Clark delivered a mediocre performance in the last quarter of 2022 as it failed to meet the revenue expectations of Wall Street.
  • Despite that fact, the company managed to get 1/3rd of profit from the international market in the last quarter.
  • The new products created by Kimberly-Clark in the last 3 years have contributed to 60% of the total sales growth in 2022.

Levi Strauss & Co: Major Drivers

By Baptista Research

  • Levi Strauss had a successful fourth quarter with strong fiscal 2022 performance.
  • Levi Stauss managed to enhance its brand positioning and market share in the global market.
  • 40% of the company’s revenues came from outside of denim bottoms in this quarter.

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Jan 29
0

Daily Brief TMT/Internet: Kanematsu Electronics, SenseTime Group, Tencent, Tyro Payments, MongoDB Inc, Jabil Circuit, Dropbox Inc, Accenture Plc Cl A and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation
  • Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani
  • Kanematsu Electronics (8096) – ¥6200/Share Tender Offer by Parent – Easy Takeout
  • ECM Weekly (29th Jan 2023) – Adani, Oasis, Mankind Pharma, ZJLD, India IPO Bookrunners
  • Tyro Payments (TYR AU): Bid Revived as Potentia Secures Due Diligence
  • MongoDB Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)
  • Jabil Inc: Major Drivers
  • Dropbox Inc: The FormSwift Acquisition & Other Drivers
  • Accenture plc: Acquisition of FiftyFive5 & Other Drivers

Kanematsu Electronics (8096 JP): JPY6,200 Tender Offer from Kanematsu Corporation

By Arun George

  • Kanematsu Electronics (8096 JP) has recommended Kanematsu Corp (8020 JP)’s tender offer of JPY6,200 per share, an 32.9% premium to the undisturbed price (27 January).
  • The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
  • The tender offer is attractive as it represents an all-time share price high and a premium to peer multiples. This suggests a done deal. 

Index Rebalance & ETF Flow Recap: NKY, LQ45, New Deal, URA, NIFTY, Stock Connect, SenseTime, Adani

By Brian Freitas

Kanematsu Electronics (8096) – ¥6200/Share Tender Offer by Parent – Easy Takeout

By Travis Lundy

  • Kanematsu Corp (8020 JP) announced two tender offers Friday to take out subsidiaries. One more liquid one. One very small sub. This is the larger, easier deal. 
  • Kanematsu Electronics is an IT shop, designing and executing system integration and maintenance services. It is a great business. The takeout is a 33% premium to an all-time high.
  • It might still be a bit cheap, but it is not egregious, and it would be quite difficult to block. 

ECM Weekly (29th Jan 2023) – Adani, Oasis, Mankind Pharma, ZJLD, India IPO Bookrunners

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • While the holiday shortened week didn’t see much action in Asia, but there was one more ADR filing in the US, adding to the mini-pipeline.
  • Adani’s ongoing FPO was the only live deal this week, although it had enough drama to make up for the lack of other deals.

Tyro Payments (TYR AU): Bid Revived as Potentia Secures Due Diligence

By Arun George

  • Tyro Payments (TYR AU) has offered, Potentia, four weeks of due diligence access to “develop a significantly improved proposal.” The Board rejected Potentia’s previous A$1.60 offer on 12 December.
  • Since the rejection of the offer, the FY2023 guidance has been upgraded and peers have re-rated. Therefore, Potentia can afford to be more generous with its terms. 
  • Press reports suggest that an offer of around A$1.85 per share would be supported by shareholders. We would be buyers as Tyro is undervalued at the last close price.

MongoDB Inc: Major Drivers, Financial Forecasts, DCF & Comparables Valuation, Key Risks (01/23)

By Baptista Research

  • MongoDB performed well in the third quarter in both financial and operational terms.
  • In addition, ISVs are continuing to develop their solutions using MongoDB in an increasing number of cases.
  • MongoDB is looking to achieve profitable growth and focus on acquiring new workloads from both existing and new customers.

Jabil Inc: Major Drivers

By Baptista Research

  • Jabil’s Q1 performance was impressive and the company delivered an all-around beat which helped propel its stock price.
  • The company’s strength resulted in the quarter’s double-digit rise in revenue, core operating income, and core diluted profits per 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.

Dropbox Inc: The FormSwift Acquisition & Other Drivers

By Baptista Research

  • Despite a series of macroeconomic challenges, Dropbox had a good last quarter and managed an all-around beat.
  • They also continue to return a sizable percentage of their free cash flow to shareholders through share repurchases.
  • Although they are experiencing moderate growth in their Sign business, it is important to set Dropbox Sign apart from conventional eSign solutions.

Accenture plc: Acquisition of FiftyFive5 & Other Drivers

By Baptista Research

  • Accenture continued its acquisition-led growth strategy in the last quarter and delivered another all-around beat, increasing operating margin while making significant investments in related businesses.
  • Engineering and industrial digitization are still in high demand and experienced strong double-digit growth in Q1.
  • Furthermore, they are assisting Celanese to undergo a digital transformation that will boost their manufacturing production resilience, productivity, and plant operations predictability.

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Jan 29
0

Daily Brief Industrials: Posco International Corporation, Kanematsu Nnk, Adani Enterprises, Hong Kong Hang Seng Index, Textron Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Names to Watch for Inclusion in MSCI Korea May Review
  • Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting
  • Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises
  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
  • Textron Inc: Major Drivers

Names to Watch for Inclusion in MSCI Korea May Review

By Sanghyun Park

  • Posco International‘s recent merger with Posco Energy increased the share count. The distance from the float market cap borderline is catchable, given the current share price uptrend.
  • Hanwha Aerospace will likely fail inclusion in this February review. The gap with the hurdle is not large, so it can aim for inclusion in the May review.
  • Among Outside IMI, Korea Gas is tricky as it is a FOL stock. MSCI-concluded float is 30%, and the gap with the float market cap hurdle is still quite large.

Kanematsu Sustech (7961) ¥2250/Share Tender Offer by Parent – Supremely Illiquid But Interesting

By Travis Lundy

  • Kanematsu Corp (8020 JP) announced two tender offers late Friday to take out minorities in subsidiaries. One larger, safer deal. One smaller, illiquid, but potentially interesting one.
  • This is the interesting one. It is being done at the wrong price, and it has investors who might care who have been long-time holders.
  • This could get interesting. You have a buyer. A target. It’s pretty clean except for shareholder structure. And the buyer has room to pay up. 

Last Week in SPACE: Kawasaki Kisen Kaisha, Osstem, Fujitsu General, Adani Enterprises

By David Blennerhassett

  • Be long Kawasaki Kisen Kaisha (9107 JP) vs MOL and NYK. The shares are cheap on a forward basis. KLine is reducing the Real World Float, causing further potential squeeze.
  • Sabana Industrial REIT (SSREIT SP)‘s Partial Offer at 0.88x book is not overwhelming, but it is also not a control stake. It is probably priced near-right.
  • IF Osstem (048260 KS)‘s price were to go higher, it is conceivable there could be a bump, but don’t bet on it as long as the stock trades <KRW 190,000. 

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

Textron Inc: Major Drivers

By Baptista Research

  • Textron delivered a decent result in the last quarter with revenues of $3.6 billion which surpassed Wall Street expectations.
  • The company faced a strong demand, a strong pricing net of inflation, and a higher aftermarket volume in this quarter.
  • It was a quarter of strong customer demand and solid cash flow.

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