In today’s briefing:
- Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker
- DH (Daehan) Shipbuilding IPO Book Building Results Analysis
- NIFTY NEXT50 Index Rebalance Preview: Potential Changes & Close Names
- Which Dividend Diamonds Will Sparkle?
- HEG IN – Graphite Leader Expands into Anodes; Capacity Edge and Battery Optionality Key
- Union Pacific Eyes Norfolk Southern: Is America’s First Coast-to-Coast Rail Giant Taking Shape?
- Markets in Motion: Turnover Gains Spark Sharper Spreads
- MMC Ports Pre-IPO – Monetization Event for Promoters
- Aberdeen Extends CLINT Deemed Interest to 6%
- Small-Caps Positioned to Benefit from Multi-Year Defence Spending Cycle
Kawasaki Heavy (7012 JP): Cheaper than Peers with Index Inclusion Kicker
- Kawasaki Heavy Industries (7012 JP) stock price has moved higher over the last few months, and the increased market cap should result in global index inclusion in August.
- Kawasaki Heavy Industries (7012 JP) has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics.
- There will be positioning in the stock that has been built up over the last month and a relative value trade could offer better risk reward here.
DH (Daehan) Shipbuilding IPO Book Building Results Analysis
- DH Shipbuilding reported a solid IPO book building results analysis. The IPO price has been finalized at 50,000 won per share (high end of the IPO price range).
- At the IPO price of 50,000 won, the expected market cap will be 1.9 trillion won. DH Shipbuilding will start trading on 1 August.
- Our base case valuation of DH Shipbuilding is target price of 67,576 won per share, which represents a 35% upside to the IPO price.
NIFTY NEXT50 Index Rebalance Preview: Potential Changes & Close Names
- With the review period nearing completion, there could be 4 changes (including 1 migration) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September.
- There is one stock close to inclusion zone and one stock close to deletion zone and price movements over the rest of the month will determine the final changes.
- Estimated one-way turnover is 7.8% resulting in a one-way trade of INR 30.06bn (US$350m). Six of the eight potential changes will have over 2x ADV to trade from passive trackers.
Which Dividend Diamonds Will Sparkle?
- Singapore’s yield superiority is not restricted to the REIT and Banking Sectors.
- There are 13 stocks (that are not REITs or Banks) that have been identified as high performing dividend stocks.
- These stocks trade more than US$3m ADT in the last six months and are outside the REIT and Banking sectors.
HEG IN – Graphite Leader Expands into Anodes; Capacity Edge and Battery Optionality Key
- Q4 FY25 delivered best operational quarter with 27% EBITDA margin and steady 80–85% utilization despite global steel demand weakness.
- Expanding graphite electrodes to 100 ktpa, commissioning 20 ktpa anode plant by FY27, and deepening exposure via GrafTech stake.
- Base case SOTP implies Rs614/share, valuing core at 8× EV/EBITDA and anode business at 2.5× invested capital.
Union Pacific Eyes Norfolk Southern: Is America’s First Coast-to-Coast Rail Giant Taking Shape?
- Norfolk Southern Corp. has emerged as a potential acquisition target for Union Pacific Corp., with early-stage discussions underway that could reshape the North American rail landscape.
- If the deal materializes, it would combine the largest and fifth-largest railroads by revenue, creating a network valued at nearly $200 billion and extending from coast to coast — an unprecedented footprint in U.S. rail history.
- Union Pacific CEO Jim Vena has publicly discussed the strategic merits of a transcontinental railroad, and Norfolk Southern CFO Jason Zampi has echoed support for such a structure, citing potential benefits.
Markets in Motion: Turnover Gains Spark Sharper Spreads
- Sanli Environmental and mDR saw significant increases in average daily trading turnover, with returns of 98.9% and 137.5% respectively.
- Q&M Dental led net institutional inflows with S$7.68 million, alongside increased CEO ownership and active share buybacks.
- OKP Holdings secured a S$258 million contract, boosting its order book to S$736 million, with visibility to 2031.
MMC Ports Pre-IPO – Monetization Event for Promoters
- MMC Port Holdings Berhad (2436494D MK) is looking to raise up to US$2bn in its upcoming Malaysian IPO.
- It is principally involved in port operations in Malaysia. The firm operates five sea ports and a solid product jetty terminal, and conducts ship-to-ship (STS) services at an offshore port.
- In this note, we talk about the not-so-positive aspects of the deal.
Aberdeen Extends CLINT Deemed Interest to 6%
- Institutions were net buyers of Singapore stocks, with a net inflow of S$113 million from July 11 to 17.
- Aberdeen Group plc increased its interest in CapitaLand India Trust to 6.15% after acquiring over 2.5 million units.
- United Overseas Bank led share buybacks, purchasing 1 million shares at an average price of S$36.80.
Small-Caps Positioned to Benefit from Multi-Year Defence Spending Cycle
- What you need to know: • Defence and aerospace small-cap equities are emerging as key beneficiaries of increasing government defence budgets.
- • Canada has committed to meeting NATO’s 2% GDP target by 2025-2026, with interim boosts totalling C$9B in new spending.
- • Demand for fighter jets, naval systems, NORAD upgrades, and drone defence create multi-year tailwinds for niche suppliers.
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