Daily Briefs

EV adoption in the ASEAN is very low compared to developed markets including the US, the Europe and China due to higher ASPs and lack of logistics, maintenance and repair.
However, there has been a rapid growth in EV related investment in the region recently, focusing on developing domestic EV markets to make them more affordable while conserving the environment.
The governments have put forward several incentives such as government funding, tax incentives to buy EVs, while introducing measures to discourage the use of ICE vehicles.

Bajaj Finance: Q1FY24 Interim Update – Stellar Growth Continues

By Ankit Agrawal, CFA

Q1FY24 AUM growth came in stellar at 9%+ QoQ, led by highest-ever quarterly AUM addition of INR 22700cr vs INR 16537cr QoQ.
BAF recorded its highest-ever quarterly increase in customer franchise at 3.84mm, taking the total to 72.98mm vs 69.14mm QoQ. New loans booked were also strong at 9.94mm vs 7.56mm QoQ.
Deposits book grew strong to INR 49,900cr vs INR 44,666cr, a growth of 11.7%+ QoQ. Liquidity surplus is at INR 12,700cr vs INR 11,852cr QoQ.

Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.

By Robert C Prather Jr

Key customers & their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies
Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring & friend-shoring may prove margin dilutive
Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile

Fenbi (2469 HK): Rightfully Sold, Wrongfully Punished

By Steve Zhou, CFA

Fenbi Ltd (2469 HK) is a newly listed China edtech company that focuses on tutoring for China civil servant exams.
The company’s share price was caught by a perfect storm in June, dropping by as much as 70% during the month.
Very interesting opportunity to have exposure to a quality company in a sector that is very different from K12 tutoring.

Celltrion (068270 KS): Humira Biosimilar Launch in US; Filed New Biosimilar Marketing Application

By Tina Banerjee

Celltrion Inc (068270 KS) has launched Humira biosimilar Yuflyma in the U.S. market, with a list price of $6,576.50 per month, 5% cheaper than Humira.
Yuflyma is a citrate-free formulation that is highly concentrated. More than 80% of patients treated with Humira in the U.S. rely on a high-concentration and citrate-free formulation.
Celltrion has submitted marketing application to the FDA for Eylea biosimilar candidate, CT-P42. The company plans to file for approval for the same in Europe and other countries later.

Suncorp – Decision on ANZ Takeover In Weeks, Competition Can Worsen If Allowed

By Daniel Tabbush

One of main criteria for ACCC to allow ANZ’s takeover of Suncorp centers around competition, will it worsen as a result
There are 8 banks in Australia with over 100 branches, if the takeover is allowed, this puts the 127 Suncorp branches into the 668 branch stable of ANZ
There is plenty of expert and public testimony that such a merger would see less competition especially in SME and agribusiness loans, and possibly limit physical access to banking

Picton Property Income – Earnings and outperformance maintained

By Edison Investment Research

For FY23 Picton Property Income (PCTN) published resilient underlying (EPRA) earnings, which together with strong rent collection supported a 4% increase in DPS paid. The impact of market-wide property yield widening on NAV was mitigated by portfolio outperformance and low gearing. Continuing occupier demand, rent growth and mostly long-term, fixed-rate borrowings are positive indicators for further progress.

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Jul 05

Daily Brief Credit: Asia HY Monthly – June 2023 – Lucror Analytics and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Asia HY Monthly – June 2023 – Lucror Analytics
China South City – Earnings Flash – FY 2022-23 Results – Lucror Analytics
Morning Views Asia: Country Garden Holdings Co, First Pacific Co

Asia HY Monthly – June 2023 – Lucror Analytics

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

China South City – Earnings Flash – FY 2022-23 Results – Lucror Analytics

China South City’s (CSC) FY 2022-23 results were as weak as expected. Revenue decreased 58% y-o-y to HKD 4.1 bn, with property sales declining 65% to HKD 2.4 bn and recurring income down 26% to HKD 1.7 bn. Earnings-based credit metrics deteriorated substantially, as adjusted EBITDA turned negative. Liquidity stood at a very weak 16% at end-March 2023, while Net Debt/Net Property Assets was sound at 39%, thanks to CSC’s sizeable investment property portfolio.

Given the sustained weakness in CSC’s property sales, we do not expect the company to be able to generate adequate FCF organically. We believe asset disposals will remain key to debt repayment. CSC has been leveraging its new state ties by selling key assets to its SOE parent and accessing more onshore bank funding. Therefore, we maintain our “Hold” recommendation on the CSCHCN curve.

Morning Views Asia: Country Garden Holdings Co, First Pacific Co

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.

Country Garden Holdings Co
First Pacific Co

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Jul 05

Daily Brief Event-Driven: Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next? and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
Costa Group (CGC AU): Paine Schwartz Wants It Back
Arteria Networks (4423) Tender Launches 5 July.
HDFC/HDFC Bank Merger: Foreigners Sell HDFC; LTIM in NIFTY; JSP in NEXT50
Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision
Yachiyo Industry (7298 JP): Honda’s Pre-Conditional Tender Offer
Costa Group (CGC AU): Paine Schwartz’s Indicative Proposal
Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes
Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit
SSE50 Index Rebalance Preview: Potential Adds Powering Higher

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

Costa Group (CGC AU): Paine Schwartz Wants It Back

Costa Group Holdings (CGC AU) listed in 2015 when Paine & Partners sold 40% of its stake in the company.
Paine Schwartz Partners bought a 13.84% stake last year, increased it in March, and has now made an offer to buy out the remaining shares at A$3.5/share in cash.
Short interest was over nearly 11 days of ADV to cover and short covering could take the stock higher sooner. This is a buy here.

Arteria Networks (4423) Tender Launches 5 July.

Seven weeks ago, Marubeni Corp (8002 JP) and Secom Co Ltd (9735 JP) announced a joint deal to acquire the rest of ARTERIA Networks Corp (4423 JP).
As I wrote in the previous piece, the premium was good, but the price was not great. The Board rejected the price, then agreed when the bidders wouldn’t go further.
Now we have a deal and the Tender Offer starts 5 July. It was cheap to start. It’s still too cheap. But this one is tough to block.

HDFC/HDFC Bank Merger: Foreigners Sell HDFC; LTIM in NIFTY; JSP in NEXT50

HDFC Limited (HDFC IN) will stop trading at the close on 12 July and will be deleted from all indices at the close on that day.
As expected, LTIMindtree (LTIM IN) will be added to the NIFTY Index while Jindal Steel & Power (JSP IN) will be added to the NSE Nifty Next 50 Index.
Importantly, HDFC Limited (HDFC IN)‘s foreign shareholding has dropped over the quarter ended 30 June and that has index implications for future passive flows to HDFC Bank (HDFCB IN).

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision

The Nikkei has an article today with details of an interview with new Toyo Construction (1890 JP) Chairman Yoshida and President Obayashi. There will be a 2-3 month governance review.
It will review decision-making process, “profit management” (利益管理), and business investment decisions (事業への投資判断). Chairman Yoshida had a quote on neutrality on a YFO proposal. My wording there was carefully chosen.
The President also said they expect ongoing synergies with Infroneer, and will maintain MTMP/Mitsui OSK Partnership management plans. Their words were chosen carefully too.

Yachiyo Industry (7298 JP): Honda’s Pre-Conditional Tender Offer

By Arun George

Yachiyo Industry (7298 JP) has recommended Honda Motor (7267 JP)’s pre-conditional tender offer of JPY1,390 per share, a 17.5% premium to the undisturbed price.
Post-Completion, Honda will transfer a 81% stake to Samvardhana Motherson Automotive Systems Group BV. The pre-conditions relate to various country approvals (China, the US, Brazil, and India).
The offer is expected to open in October. Achieving the 66.67% minimum ownership ratio requires a 32.6% minority acceptance rate which is doable as the offer is reasonable.

Costa Group (CGC AU): Paine Schwartz’s Indicative Proposal

By Arun George

Costa Group Holdings (CGC AU) has disclosed an indicative non-binding proposal from Paine Schwartz Partners at A$3.50 per share (A$3.54 including potential interim dividend).
The Board has granted eight weeks of non-exclusive due diligence. The due diligence, which started on 6 June, ends on 1 August.
The offer price is attractive compared to peer multiples and historical trading ranges. At the current price of A$3.35, the gross spread is 4.5% (5.7% including dividend).

Quiddity Leaderboard BSE/SENSEX Dec 23: HDFC Intra-Review Replacements & Other Expected Changes

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the December 2023 Rebalance.
The HDFC/HDFC Bank Merger is expected to trigger index changes in the next few days and we take a look at our expectations for these intra-review changes.
Apart from that, I see no other changes for SENSEX in December 2023. However, there could be up to six changes for both BSE 100 and BSE 200.

Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit

By David Blennerhassett

Back On 29 September 2019, Hainan Meilan International Airport (357 HK) entered into a subscription agreement with Hopu-affiliate Aero Infrastructure, for 200mn new H shares at HK$4.69/share.
That issuance failed as CSRC approval was not secured by the Long Stop. Hopu reckoned HMIA reneged on its duties to secure approval and lodged a notice of arbitration.
HKIAC recently agreed and opines HMIA did not use its best endeavours to complete the subscription. Hopu is seeking up to HK$6.962bn in compensation. Quite the overhang.

SSE50 Index Rebalance Preview: Potential Adds Powering Higher

Two thirds of the way through the review period, we see 10 potential adds/8 potential deletes in December. However, there can be a maximum of 5 changes at a review.
We estimate a one-way turnover of 5.8% at the December rebalance leading to a one-way trade of CNY 4.67bn. Index arb balances could increase the impact on the stocks.
The potential adds have outperformed the potential deletes over the last six months and there has been renewed outperformance over the last month.

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Jul 05

Daily Brief Macro: ISM at 46: Recession Within Six Months and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

ISM at 46: Recession Within Six Months, or This Time Is Different?
The Economic Impacts of De-Risking on Asia
Asset Allocation Watch: Macro Regime Indicator – Introducing Our Brand New Asset Allocation Model
China’s Policy Dilemma: Getting Used to Mediocre Growth
CX Daily: Metal Magnate’s Fall From China’s Rich List to Bankruptcy
The Great Game – A Drunk Uncle in the Metaverse

ISM at 46: Recession Within Six Months, or This Time Is Different?

By Jeroen Blokland

US GDP growth has been negative on average in the six months following an ISM Manufacturing Index of 46 or lower.
The US unemployment rate rises significantly when the ISM Manufacturing drops to 46 or lower.
A in-depth analysis of the ISM pattern during major economic downturns reveals this time may still be different.

The Economic Impacts of De-Risking on Asia

By Manu Bhaskaran

Asia may be expected to suffer some loss in export demand due to emerging trends such as near-shoring that divert production activity away from China and Asia more broadly.
The process of undoing global trade interlinkages will also have negative spillovers on economic efficiency and the diffusion of knowledge and technology.
But emerging Asia need not be a hapless bystander; bolstering its internal adaptive capacity and promoting intra-regional trade will strengthen its position in this new world.

Asset Allocation Watch: Macro Regime Indicator – Introducing Our Brand New Asset Allocation Model

By Andreas Steno

Each month we assess the macro environment based on liquidity, inflation and growth models. Our models were right that inflation, growth and liquidity would all drop in June, but for July we see a possible slight uptick in growth, while inflation and liquidity will continue down.
Welcome to our monthly Macro Regime Indicator update. We aim at updating you on our base-case projections for liquidity, inflation and growth and how to optimally allocate according to the regime based on our empirical beta studies in the brand new asset allocation model available in our data-hub.
We highlighted how liquidity, inflation and growth would all decline through June, which proved to be the correct projection. Liquidity shrank around $300bn through the month, inflation declined from from 4.9% to 4% and ISM declined from 46.9 to 46.0.

China’s Policy Dilemma: Getting Used to Mediocre Growth

By Manu Bhaskaran

Past super-charged investment rates funded by excessive leverage meant that China borrowed growth from the future. Now the bills are coming due in the form of lower growth.
A deepening psychological malaise is affecting economic agents. This malaise is rooted in worries about China’s structural problems such as weak demographics and high debt.
The government may step up policy responses but shy away from the needed structural reforms. The 5% growth objective may still be achieved but downside risks will remain.

CX Daily: Metal Magnate’s Fall From China’s Rich List to Bankruptcy

By Caixin Global

Metal /: Cover Story: Metal magnate’s fall from China’s rich list to bankruptcy
Personnel /: China central bank Deputy Governor Pan Gongsheng named Communist Party chief
China-U.S. /: China, U.S. have shared interests in getting ties back on track, party official says

The Great Game – A Drunk Uncle in the Metaverse

By Mikkel Rosenvold

In an era that’s increasingly defined by technology, geopolitics too has embraced the trend. Case in point, the Shanghai Cooperation Organisation (SCO) Summit.
This year, the meeting is taking place virtually, with India taking on the mantle of host, guiding the event seamlessly through cyberspace – or should we say the SCO Metaverse?
Let’s take a look at the main acts and what we will remember.

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Jul 05

Daily Brief Energy/Materials: Energy Absolute, ABM Investama, Eastman Chemical Co, Trigon Metals and more

By Smartkarma Daily Briefs | Daily Briefs, Energy & Materials Sector

In today’s briefing:

ASEAN EV Ecosystem Series: Committed Towards Building a Regional EV Ecosystem
Asia HY Monthly – June 2023 – Lucror Analytics
Eastman Chemical Company: Unlocking Its Growth Potential With A Unique Strategic Approach! – Key Drivers
Mining Monthly: June Edition

ASEAN EV Ecosystem Series: Committed Towards Building a Regional EV Ecosystem

EV adoption in the ASEAN is very low compared to developed markets including the US, the Europe and China due to higher ASPs and lack of logistics, maintenance and repair.
However, there has been a rapid growth in EV related investment in the region recently, focusing on developing domestic EV markets to make them more affordable while conserving the environment.
The governments have put forward several incentives such as government funding, tax incentives to buy EVs, while introducing measures to discourage the use of ICE vehicles.

Asia HY Monthly – June 2023 – Lucror Analytics

Eastman Chemical Company: Unlocking Its Growth Potential With A Unique Strategic Approach! – Key Drivers

Eastman delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
The company made improvements in the Fiber business due to increased prices and operational performance.
Supply-side factors, such as capacity reduction and effective capacity loss, have created tight markets and a focus on the security of supply.

Mining Monthly: June Edition

By Atrium Research

What you need to know: • The precious metals markets were down slightly in the month of June, however, we view this as a healthy consolidation period following significant price increases since November 2022.
Sentiment Update June was similar to May for the gold price, posting a modest 2.2% decline to $1,919.1/oz, while silver fell 3.1% to $22.8/oz, and copper increased 2.8% to $3.7/lb.
We believe the last two months of consolidation for precious metals and other commodities is healthy considering the significant increase in prices since November 2022.

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Jul 05

Daily Brief Utilities: Silver Dragon Water Supply Group and more

By Smartkarma Daily Briefs | Daily Briefs, Utilities Sector

In today’s briefing:

Silver Dragon Water Supply Group Pre-IPO Tearsheet

Silver Dragon Water Supply Group Pre-IPO Tearsheet

By Clarence Chu

Silver Dragon Water Supply Group (2210081D CH) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are HSBC and Huatai International.
Silver Dragon Water Supply Group (SDW) is principally engaged in the supply of tap water, raw water and pipeline direct drinking water in China.
As per Frost & Sullivan (F&S), the firm had the largest water pipeline network in terms of water pipeline length among all water supply companies in China in 2022.

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Jul 05

Daily Brief Industrials: Toyo Construction, Hainan Meilan International Airport, Tryt Inc, J&T Global Express, Cintas Corp, Norcros PLC and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision
Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit
TRYT IPO: Margins on a Downward Trend
J&T Global Express Pre-IPO, Part 2: SE Asia Operation | Demand, Supply Profiles | Valuation Approach
Cintas Corporation: 4 Reasons Why Cintas is Leading the Way in Uniform Rental and Safety Services! – Financial Forecasts
Norcros – New CEO likely to pursue existing strategy

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision

The Nikkei has an article today with details of an interview with new Toyo Construction (1890 JP) Chairman Yoshida and President Obayashi. There will be a 2-3 month governance review.
It will review decision-making process, “profit management” (利益管理), and business investment decisions (事業への投資判断). Chairman Yoshida had a quote on neutrality on a YFO proposal. My wording there was carefully chosen.
The President also said they expect ongoing synergies with Infroneer, and will maintain MTMP/Mitsui OSK Partnership management plans. Their words were chosen carefully too.

Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit

By David Blennerhassett

Back On 29 September 2019, Hainan Meilan International Airport (357 HK) entered into a subscription agreement with Hopu-affiliate Aero Infrastructure, for 200mn new H shares at HK$4.69/share.
That issuance failed as CSRC approval was not secured by the Long Stop. Hopu reckoned HMIA reneged on its duties to secure approval and lodged a notice of arbitration.
HKIAC recently agreed and opines HMIA did not use its best endeavours to complete the subscription. Hopu is seeking up to HK$6.962bn in compensation. Quite the overhang.

TRYT IPO: Margins on a Downward Trend

TRYT Group is engaged in job placement and temporary staffing in the medical and welfare fields. The company has filed for an IPO and plans to raise around $450m.
The company’s top line has continued to expand; however, margins have continued to narrow down over the last 3-4 years.
We remain concerned over the company’s growth prospects and would only recommend subscribing if the IPO is priced attractively.

J&T Global Express Pre-IPO, Part 2: SE Asia Operation | Demand, Supply Profiles | Valuation Approach

By Daniel Hellberg

In this insight, we examine J&T Global Express (1936374D CH)‘s operation in SE Asia, where it’s the region’s dominant player, with market share of 22.5% by volume
We profile SE Asian demand and supply and compare these to the development of China’s express industry, acknowledging the key role Alibaba (ADR) (BABA US) has played there
We also present a framework for estimating the value of J&T’s SE Asian operation by identifying the most appropriate comps and EV valuation multiples

Cintas Corporation: 4 Reasons Why Cintas is Leading the Way in Uniform Rental and Safety Services! – Financial Forecasts

Cintas managed to exceed analyst expectations in terms of revenue as well as earnings.
The Uniform Rental and Facility Services segment experienced solid organic growth driven by increased volume and new customer acquisitions.
The company’s First Aid and Safety Services segment revenue grew 16.4% organically, driven by strong demand for first aid products and services, as well as training and compliance solutions whereas its All Other segment revenue grew 14.7% organically, driven by growth in fire protection services and direct sale uniform businesses.

Norcros – New CEO likely to pursue existing strategy

By Edison Investment Research

Norcros’s final results highlighted a solid FY23 performance, and although we have reduced our estimates to reflect a weaker macro outlook, we believe Norcros has an excellent base to evolve its strategy, which should allow it to unlock significant market share opportunities. We also believe that its key strengths are undervalued and that most, if not all, of the legacy issues, particularly the pension deficit, have been resolved. We have trimmed our valuation from 252p/sh to 246p, implying c 50% upside.

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Jul 05

Daily Brief TMT/Internet: ARTERIA Networks Corp, PhilEnergy, Samsung Electronics, Foxconn Industrial Internet, Fadu , IAC/InterActiveCorp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Arteria Networks (4423) Tender Launches 5 July.
PhilEnergy IPO Bookbuilding Results Analysis
At the Core Lies Why Anything Named Samsung Deserves a Discount
SSE50 Index Rebalance Preview: Potential Adds Powering Higher
Fadu IPO Valuation Analysis
IAC Inc.: 4 Ways In Which This Company Is Shaping Its Long-Term Growth Prospects! – Key Drivers

Arteria Networks (4423) Tender Launches 5 July.

Seven weeks ago, Marubeni Corp (8002 JP) and Secom Co Ltd (9735 JP) announced a joint deal to acquire the rest of ARTERIA Networks Corp (4423 JP).
As I wrote in the previous piece, the premium was good, but the price was not great. The Board rejected the price, then agreed when the bidders wouldn’t go further.
Now we have a deal and the Tender Offer starts 5 July. It was cheap to start. It’s still too cheap. But this one is tough to block.

PhilEnergy IPO Bookbuilding Results Analysis

By Douglas Kim

PhilEnergy’s IPO price has been determined a 34,000 won. The company will raise 95.6 billion won in this IPO offering.
A total of 1,955 institutional investors participated in the IPO offering with a competition demand ratio of 1,812 to 1.
Given the exceptional book building results, it is highly likely that PhilEnergy will have a strong price performance once it starts trading.

At the Core Lies Why Anything Named Samsung Deserves a Discount

By Ken S. Kim

Samsung Electronics (005930 KS) has been a nice outperformer relative to SK Hynix (000660 KS) and Micron Technology (MU US) due to valuation, tech merit and exposure to AI
For cyclical stocks, no matter defensive vs. peers, does it make more sense to play the pure plays?
On the recent settlement between Elliott and Samsung C&T (028260 KS) , there was a secret payment made to just Elliott. What about the other minority shareholders?!

SSE50 Index Rebalance Preview: Potential Adds Powering Higher

Two thirds of the way through the review period, we see 10 potential adds/8 potential deletes in December. However, there can be a maximum of 5 changes at a review.
We estimate a one-way turnover of 5.8% at the December rebalance leading to a one-way trade of CNY 4.67bn. Index arb balances could increase the impact on the stocks.
The potential adds have outperformed the potential deletes over the last six months and there has been renewed outperformance over the last month.

Fadu IPO Valuation Analysis

By Douglas Kim

Our base case valuation analysis suggests implied market cap of 2.2 trillion won or 43,676 won per share, representing 41% higher than the high end of the IPO price range.
At the high end of our valuation sensitivity analysis, it suggests implied price of 62,893 won per share, representing 103% higher than the high end of the IPO price range.
Fadu is a system semiconductor fabless company specializing in data centers, which is experiencing a strong growth due to higher data demand for cloud, AI/Big data, 5G, and autonomous driving.

IAC Inc.: 4 Ways In Which This Company Is Shaping Its Long-Term Growth Prospects! – Key Drivers

IAC managed to exceed analyst expectations in terms of revenue as well as earnings.
The company’s emphasis on core fundamentals and operational efficiency has yielded profitability and improved customer experiences.
IAC is also focused on driving revenue growth through investments in customer experience and strategic revenue reallocation.

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Jul 05

Daily Brief Industrials: Toyo Construction, Hainan Meilan International Airport, Tryt Inc, J&T Global Express, Cintas Corp, Norcros PLC and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision
Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit
TRYT IPO: Margins on a Downward Trend
J&T Global Express Pre-IPO, Part 2: SE Asia Operation | Demand, Supply Profiles | Valuation Approach
Cintas Corporation: 4 Reasons Why Cintas is Leading the Way in Uniform Rental and Safety Services! – Financial Forecasts
Norcros – New CEO likely to pursue existing strategy

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision

The Nikkei has an article today with details of an interview with new Toyo Construction (1890 JP) Chairman Yoshida and President Obayashi. There will be a 2-3 month governance review.
It will review decision-making process, “profit management” (利益管理), and business investment decisions (事業への投資判断). Chairman Yoshida had a quote on neutrality on a YFO proposal. My wording there was carefully chosen.
The President also said they expect ongoing synergies with Infroneer, and will maintain MTMP/Mitsui OSK Partnership management plans. Their words were chosen carefully too.

Hainan Meilan’s (357 HK)’s Arbitration Case Is Not Without Merit

By David Blennerhassett

Back On 29 September 2019, Hainan Meilan International Airport (357 HK) entered into a subscription agreement with Hopu-affiliate Aero Infrastructure, for 200mn new H shares at HK$4.69/share.
That issuance failed as CSRC approval was not secured by the Long Stop. Hopu reckoned HMIA reneged on its duties to secure approval and lodged a notice of arbitration.
HKIAC recently agreed and opines HMIA did not use its best endeavours to complete the subscription. Hopu is seeking up to HK$6.962bn in compensation. Quite the overhang.

TRYT IPO: Margins on a Downward Trend

TRYT Group is engaged in job placement and temporary staffing in the medical and welfare fields. The company has filed for an IPO and plans to raise around $450m.
The company’s top line has continued to expand; however, margins have continued to narrow down over the last 3-4 years.
We remain concerned over the company’s growth prospects and would only recommend subscribing if the IPO is priced attractively.

J&T Global Express Pre-IPO, Part 2: SE Asia Operation | Demand, Supply Profiles | Valuation Approach

By Daniel Hellberg

In this insight, we examine J&T Global Express (1936374D CH)‘s operation in SE Asia, where it’s the region’s dominant player, with market share of 22.5% by volume
We profile SE Asian demand and supply and compare these to the development of China’s express industry, acknowledging the key role Alibaba (ADR) (BABA US) has played there
We also present a framework for estimating the value of J&T’s SE Asian operation by identifying the most appropriate comps and EV valuation multiples

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