Daily BriefsIndustrials

Daily Brief Industrials: Kepco Engineering & Construction, Toshiba Corp, Samsung C&T, Nidec Corp, Adani Enterprises, Sany Heavy Industry and more

In today’s briefing:

  • Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes
  • Toshiba – Preparing for 2QFY23
  • Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023
  • Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted
  • Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More
  • Sany Heavy: Buy

Solactive Global Uranium & Nuclear Components Index Rebalance: 6 Adds, 5 Deletes

By Brian Freitas

  • Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There are 6 adds and 5 deletes with implementation at the close on 31 January.
  • Estimated one-way turnover is in excess of 12% and will result in a one-way trade of US$207m. There are 11 stocks with estimated passive flows greater than 5x ADV.
  • Some of the inclusions have had BIG rallies over the last couple of months and there could be profit taking on those names in the next few days.

Toshiba – Preparing for 2QFY23

By Mio Kato

  • We have turned slightly more bearish on Toshiba’s near term fundamental prospects as we now have concerns about the industrial side of its semiconductor business. 
  • The re-emergence of a WDC-Kioxia deal and the likelihood of a change in BOJ policy make us wonder whether bankers might want to wait a little on financing. 
  • As such, while recent weakness makes an aggressively negative view difficult we do not feel that upside risks are particularly threatening either.

Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

By Douglas Kim

  • In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
  • Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
  • We highlight 33 pair trades that involve Korean holdcos and opcos.

Nidec (6594): A V-Shaped Recovery Cannot Be Taken for Granted

By Scott Foster

  • Nidec is headed into the red due to market disruption in China, restructuring charges and stagflation.
  • The first two of these factors should be temporary, but the third points to longer term pressure on margins. Competition in EV motors is another problem that won’t go away.
  • In a weak economy characterized by stagflation, it is too early to turn bullish.

Adani Enterprises US$2.4bn FPO – Updates, Pricing, Structure, Anchor and Some More

By Sumeet Singh

  • Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.
  • Adani Enterprises is the flagship company of the Adani Group. The group’s entities’ stock performance over the past few years has made the founder one of the richest persons globally.
  • We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.

Sany Heavy: Buy

By Xin Yu, CFA

  • China’s construction engineering industry declined more than expected in 2022
  • The industry may reach the inflection point by the end of 2023 or 1H24
  • Sany Heavy is expected to recover earlier than its peers

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