Smartkarma Daily Briefs

• Media reported last night that JIP would bid ¥2.2trln for Toshiba. That’s about ¥5,000-5,100/share. 
• This morning, there is a bit more clarification. Funnily, that means there is less info here than people think.
• But it is not a great look for either JIP or Toshiba at this point.

• Kawasaki Kisen Kaisha (9107 JP) had a shareholder return program in place in May. Earnings forecasts on 3 Nov were slightly disappointing so the stock sold off but…
• The large buyback allowed investors to try to game the situation. Some may have, but this morning on the execution, VERY few Real World Float holders sold. 
• That leaves the stock squeezy going into a buyback to repurchase 20% of the Max Real World Float (including short-created longs). 

• Delhivery (DELHIVER IN) raised US$675m in its IPO and started trading on 24 May. The stock dropped below its IPO price a couple of weeks ago.
• Lock-Ups on pre-IPO investors expire on 20 November with 598m shares (US$2.89bn) becoming available for sale. Sell before then or hold off on buying.
• Delhivery (DELHIVER IN) is a potential inclusion to the MSCI Small Cap and FTSE All-World indices in the next month. Passive buying will be overshadowed by lock-up expiry.

• Archean Chemical Industries (0810406D IN) is looking to raise about US$176m in its India IPO. 
• Archean Chemical Industries (ACI) is a specialty marine chemical manufacturer in India focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. 
• ACI has been growing on the back of increasing production capacity, sales volume and average selling prices in recent years. However, the firm had nearly defaulted previously. 

• An ideal timing of selling/shorting Sungeel Hitech would be after its stock is included in KOSDAQ 150 but before the end of the 6 months lock up period. 
• Sungeel Hitech is a likely candidate for an early entry in KOSDAQ 150 in December.
• Sungeel Hitech’s 6 months end of lock-up period is on 28 January 2023. There are 0.31 million shares (2.6% of total outstanding shares) that can be sold after this period.

Adani Ports and Special Economic Zone’s (APSEZ) H1/22-23 results were moderately strong. The company reported robust earnings growth and margin expansion, supported by organic growth in cargo volumes and improved pricing. Leverage improved, as the company applied positive FCF towards debt reduction. That said, we expect slightly negative FY 2022-23 FCF, owing to higher full-year capex and the Haifa port acquisition. 

We note APSEZ’s continued aggressive growth ambitions, which would keep Net Debt/EBITDA at a moderate 3-4x. The company’s intention to bid for the Container Corporation of India (valued at a hefty USD 5.8 bn) may present an event risk, though the impact on leverage would ultimately hinge on APSEZ’s funding plans.

• Media reported last night that JIP would bid ¥2.2trln for Toshiba. That’s about ¥5,000-5,100/share. 
• This morning, there is a bit more clarification. Funnily, that means there is less info here than people think.
• But it is not a great look for either JIP or Toshiba at this point.

• Kawasaki Kisen Kaisha (9107 JP) had a shareholder return program in place in May. Earnings forecasts on 3 Nov were slightly disappointing so the stock sold off but…
• The large buyback allowed investors to try to game the situation. Some may have, but this morning on the execution, VERY few Real World Float holders sold. 
• That leaves the stock squeezy going into a buyback to repurchase 20% of the Max Real World Float (including short-created longs). 

• Delhivery (DELHIVER IN) raised US$675m in its IPO and started trading on 24 May. The stock dropped below its IPO price a couple of weeks ago.
• Lock-Ups on pre-IPO investors expire on 20 November with 598m shares (US$2.89bn) becoming available for sale. Sell before then or hold off on buying.
• Delhivery (DELHIVER IN) is a potential inclusion to the MSCI Small Cap and FTSE All-World indices in the next month. Passive buying will be overshadowed by lock-up expiry.

• Archean Chemical Industries (0810406D IN) is looking to raise about US$176m in its India IPO. 
• Archean Chemical Industries (ACI) is a specialty marine chemical manufacturer in India focused on producing and exporting bromine, industrial salt, and sulphate of potash to customers around the world. 
• ACI has been growing on the back of increasing production capacity, sales volume and average selling prices in recent years. However, the firm had nearly defaulted previously. 

• An ideal timing of selling/shorting Sungeel Hitech would be after its stock is included in KOSDAQ 150 but before the end of the 6 months lock up period. 
• Sungeel Hitech is a likely candidate for an early entry in KOSDAQ 150 in December.
• Sungeel Hitech’s 6 months end of lock-up period is on 28 January 2023. There are 0.31 million shares (2.6% of total outstanding shares) that can be sold after this period.

Adani Ports and Special Economic Zone’s (APSEZ) H1/22-23 results were moderately strong. The company reported robust earnings growth and margin expansion, supported by organic growth in cargo volumes and improved pricing. Leverage improved, as the company applied positive FCF towards debt reduction. That said, we expect slightly negative FY 2022-23 FCF, owing to higher full-year capex and the Haifa port acquisition. 

We note APSEZ’s continued aggressive growth ambitions, which would keep Net Debt/EBITDA at a moderate 3-4x. The company’s intention to bid for the Container Corporation of India (valued at a hefty USD 5.8 bn) may present an event risk, though the impact on leverage would ultimately hinge on APSEZ’s funding plans.