In today’s briefing:
- Meilan Airport (357 HK): Mixed Takeaways from Conversations with the Company
- Inflexion/DWF: Deal Announcement
- Monthly Container Shipping Tracker | Rates Depressed, Stable | Worst of ‘Storm’ Passed (July 2023)
- Harvesting Gains
Meilan Airport (357 HK): Mixed Takeaways from Conversations with the Company
- We had a chance talking to the company about key topics about outlook of passenger traffic, recovery of duty-free sales and details about the arbitration.
- The takeaway is mixed as we see both positives and negatives relative to our expectations.
- We cut our forecast of 2023 net profit from RMB400 million to RMB300 million and expect the earnings to be back-end loaded.
Inflexion/DWF: Deal Announcement
- There were no surprises and Inflexion launched the offer for DWF Group (DWF LN) well ahead of the 7 August PUSU deadline. DWF shares increased by c. 15%.
- The final proposal maintains what was announced: 97p in cash plus a 3p dividend,8.0x EV/Fwd NTM EBIT and 8.2x Fwd P/E, and an 18% discount to the IPO price.
- The closing share price pre-first announcement was 56.5p, taking it as break, the market is pricing a 94% chance to complete the deal. Spread is 2.6%/6.2% (gross/annualised). Long.
Monthly Container Shipping Tracker | Rates Depressed, Stable | Worst of ‘Storm’ Passed (July 2023)
- Rates remain depressed but stable, and easier Y/Y comps will arrive in late Summer
- Fuel costs should be a tailwind in Q2 results; Danish giant Maersk reports on August 4th
- We expect Q2/H1 results to support our view that the worst of the storm has passed
Harvesting Gains
- In the past several years, the agricultural market has been subject to escalating uncertainty, catalyzed by a triad of disruptive forces, including a global pandemic, the geopolitical uncertainty exemplified by the ongoing war in Ukraine, and unpredictable climatic events leading to droughts and diminished yields.
- These factors have injected volatility into the market, causing prices to move unpredictably due to periods of shortages and excess supply.
- Despite the volatility, however, prices remain on a long-term upward trajectory.
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