In today’s briefing:
- Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act
- Gravita India Ltd- Forensic Analysis
- Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14
- Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers
- ONEOK Inc.: Expansion of Data Centers
Greatview Aseptic (468 HK): Shandong Xinjufeng VGO Could Force Mengniu to Act
- Shandong Xinjufeng Technology Packaging (301296 CH) disclosed a pre-conditional voluntary offer for Greatview Aseptic Packaging (468 HK) at HK$2.65, a 26.2% premium to the undisturbed price.
- The pre-condition relates to Chinese regulatory approvals and Shandong Xinjufeng shareholder approval. The offer is conditional on a 50% minimum acceptance condition.
- Shandong Xinjufeng’s previous acquisition of Jardine Matheson’s 28.22% stake elicited a defensive move by China Mengniu Dairy Co (2319 HK). This development is likely to force a Mengniu competing VGO.
Gravita India Ltd- Forensic Analysis
- In FY24, Gravita India (GRAV IN) had faced qualified opinion from the auditors regarding its accounting pertaining to share based payments, which in a way boosted the earnings.
- However, the unusual accounting behaviour is not for the company. We have seen some irregular line items in the past as well, w.r.t. gains and losses on commodities and forex.
- Other key takeaways include negative free cash flows and difficulty in cash generation, revenues from traded goods not being in sync, fresh contingent liabilities, etc.
Underexposed Flow Trading Opportunity: LONG Banks & SHORT LG Chem/Energy on June 14
- Despite time until screening, predictions likely hold due to market cap gaps; all candidates are banks, benefiting from recent momentum.
- Historical patterns show profit-taking selling affecting price impact, particularly on additions with significant pre-inclusion price rises. Monitor banks’ pre-June 14th price appreciation to anticipate impact distortions.
- Shorting LG Chem and LG Energy Solution based on high price cointegration, consider basket-trading them before the rebalancing, using the battery sector as a long hedge.
Ecolab Inc.: Leveraging Digital Capabilities For The Pest Elimination Business! – Major Drivers
- Ecolab Inc.’s first-quarter 2024 earnings showcased strong progress with adjusted earnings per share increasing by 52%.
- This impressive outcome can be attributed to a 5% growth in organic sales and the expansion of organic operating income margin by 400 basis points.
- The company is also expected to maintain its long-term earnings growth of 12% to 15%.
ONEOK Inc.: Expansion of Data Centers
- ONEOK, a midstream service provider in the natural gas industry, revealed substantial financial growth in its first-quarter 2024 earnings call.
- The company reported healthy year-over-year volume growth in the Rocky Mountain region and meaningful contributions from the Refined Products and Crude segment.
- ONEOK’s satisfactory performance in Q1 2024 was driven by favourable industrial fundamentals and the realization of commercial and cost synergies – increasing its full-year financial guidance for 2024.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
