In today’s briefing:
- Harita Nickel IPO – The Positives – Earnings Staged a Recovery in Recent Periods
- Trial Holdings IPO: The Bear Case
- Pre-IPO Shanghai Duoning Biotechnology – The Industry, the Business and the Concerns
- W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations
- Advance Auto Parts Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- Tata Technologies Pre-IPO Tearsheet
Harita Nickel IPO – The Positives – Earnings Staged a Recovery in Recent Periods
- PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) is looking to raise about US$650m in its Indonesian IPO.
- PT Trimegah Bangun Persada Tbk (Harita Nickel, HN) is a vertically integrated pure-play nickel company operating on Obi Island, Indonesia.
- In this note, we will talk about the positive aspects of the deal.
Trial Holdings IPO: The Bear Case
- Trial Holdings (5882 JP), a discount store operator in Japan, is seeking to raise US$380 million at the IPO reference price of JPY2,000. Pricing on 26 March.
- In Trial Holdings 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 bottom quartile gross and operating margin, mid-tier FCF generation and unusual cash collection cycle.
Pre-IPO Shanghai Duoning Biotechnology – The Industry, the Business and the Concerns
- The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.
- Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.
- A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns.
W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on W.W.
- Grainger, Inc., a global distributor of MRO materials and other related products and services.
- The company delivered an all-around beat for the final quarter of 2022 with a sales growth was 13.2% or 17.2% on a daily constant currency basis and solid growth in both segments.
Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations
- This is our first report on Rockwell Automation, a major provider of digital transformation and industrial automation solutions across the globe.
- Rockwell Automation produced an all-around beat in its last result as organic sales and earnings both exceeded market expectations and increased year over year.
- In a very dynamic supply chain environment, organic sales were 10% higher than they had been the previous year.
Advance Auto Parts Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on Advance Auto Parts, a leading provider of automotive aftermarket parts in the U.S.
- Advance Auto Parts had a difficult year in 2022 though it did manage to improve its top-line results in the fourth quarter and managed an all-around beat.
- Mid-single-digit comp sales growth in DIY multichannel dominated the fourth quarter.
Tata Technologies Pre-IPO Tearsheet
- Tata Technologies (TATATECH IN) is looking to raise about US$600m in its upcoming India IPO. The deal will be run by Bank of America, Citigroup and JM Financial.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- It has deep domain expertise in the automotive industry and serves clients in adjacent industries, such as aerospace, transportation and construction heavy machinery (TCHM), according to the company.
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