In today’s briefing:
- Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity
- The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors
- J&T Global Express H224 Results: Levers That Drove Earlier Improvement Are Losing Power
- AviChina Industry (2357 HK): The Discount to Narrow
- Weekly Update (IDT, RHLD, SNRE, SNDK)
Daihatsu Diesel (6023) Buyback Tender Results Signal Overhang and Opportunity
- In late January, Daihatsu Diesel Mfg (6023 JP) announced its once/former parent would sell all its shares; in part to a private company in the industry and a 20% buyback.
- The buyback – a below-market own-share tender offer – was priced low enough to be a big win. Accretion added to that.
- Buyback Tender Results and External Changes signal overhang and opportunity. Either way, it’s cheap, but good governance could make it even cheaper.
The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors
- The USTR issued a Section 301 report in January 2025. The report suggests China has tried to achieve dominance in global shipping, to the detriment of US commerce.
- The report is flawed, in data (it somehow manages to make up data which is otherwise available from MARAD), analytics, and conclusions, but the Trump administration has run with it.
- In February, the USTR announced “Proposed Actions” – fees for Chinese liners and international liners with Chinese ships, and restrictions on future exports. US users lose. And there are loopholes.
J&T Global Express H224 Results: Levers That Drove Earlier Improvement Are Losing Power
- H224 showed moderating top-line growth, but solid Y/Y improvement in EBITDA margin
- However, the levers that drove margin improvement in 2024 appear to be losing power
- Within China’s express and logistics segment, we find SF Holding to be far more attractive
AviChina Industry (2357 HK): The Discount to Narrow
- The share price of AviChina Industry & Technology H (2357 HK) has picked up in Mar, and it will continue to chase the HSI and HSCEI, in our view.
- At 54.1%, AviChina’s discount to its A-share holdings has narrowed 4.2pp YTD, but is still behind the 6.2pp contraction for overall H-A shares. There is more room to catch up.
- The increase in defense spending, advancement in domestic commercial aviation and development of the low-altitude economy are major potential drivers.
Weekly Update (IDT, RHLD, SNRE, SNDK)
There were no new spin-off announcements this week.
The Middleby Corporation (MIDD) announced its plan to spin off its food processing business on February 25, 2025.
This strategic move aims to allow Middleby to concentrate on its core commercial foodservice and residential kitchen equipment sectors, while enabling the new entity to focus exclusively on food processing operations.
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