Smartkarma Daily Briefs

• We had the heads up days (or a week plus) ago, and now it is official. Bain launches its Tender Offer for Hitachi Metals (5486 JP) tomorrow at ¥2,181/share.
• The company’s trade name will be changed to PROTERIALS (i.e. losing “Hitachi”) which should be fine. It was non-core anyway. 
• This is still a large-ish deal – up to ¥434bn. MktCap is ¥930bn. But minimum is only 56.8mm shares because they get the parent vote anyway. Done deal. 

• PT Avia Avian (AVIA IJ) is known for its position as the leading and best-quality paint manufacturer in Indonesia but it now has an increasingly diverse products portfolio. 
• The company has successfully offset raw material price pressure with price rises to keep margins relatively steady and also saw a sharp pick up in sales in 2Q2022.
• Avian continues to launch new products and build out new distribution centres to support future growth, with future M&A also a potential growth driver. Valuations reflect its leading market position. 

• Occidental Energy had become a buzzing stock after Warren Buffett’s Berkshire Hathaway boosted its stake in the energy major.
• It started to repurchase shares this quarter, thus advancing its framework of shareholder return as a part of the commitment for the company to return cash to the shareholders.
• We provide the stock of Occidental with a ‘Hold’ rating and a revision in the target price.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharat Petroleum Corp
• China Hongqiao
• Japfa Comfeed Indonesia

• Nucor managed to deliver an all-around beat as a result of strong performance in raw material operations, tabular, buildings, deck, joist, structural, sheet, plate, and bar.
• The flexible and sustainable business model of Nucor proves its ability to grow and create values for its shareholders.
• Nucor Corporation has recently announced that it has joined an agreement to acquire Summit Utility Structures LLC and Sovereign Steel Manufacturing LLC.

• Valero Energy reported an excellent result with revenues and earnings well above Wall Street expectations as the company maximized the refining rates.
• The refinery utilization rate of the company increased in the quarter and the refining margins were reinforced by sustained energy cost advantage for the U.S. refineries, low product inventories, and strength in product demand.
• We provide the stock of Valero Energy with a ‘Hold’ rating and a revision in the target price.

• On 23 September, Hanwha Solutions announced a set of restructuring measures which are probably the biggest ever moves by the company in the past 50 years.
• The spin-off of the Hanwha Galleria is a good move. Clearly, having both the renewable energy and a luxury department store business under one roof does not make much sense.
• We also like the company’s move expand its U.S. solar module production capacity. The total amount of potential benefit could be nearly US$2 billion over the next decade. 

• Growatt Technology (1833969D CH), a leading PV inverters manufacturer, will seek a listing hearing for a US$1 billion HKEx IPO in October, according to press reports.
• In Growatt Technology 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 rising customer concentration risk, high dependence on Brazil for growth, limited pricing power and a shift to FCF burn.