Daily Brief Industrials: Keppel Corp, Renesas Electronics, Sichuan Road&Bridge Co Lt A and more

In today’s briefing:

Keppel O&M Spin-Off Approaching Quickly

After 18mos of hints, and two rights recapitalisations at Sembcorp Marine (SMM SP), SMM and Keppel Corp (KEP SP) announced a deal to merge their O&M businesses at end-April.
Keppel shareholders would receive ~18 shares of SMM per share of Keppel owned, Keppel spins out the equity of its legacy rig assets and leaves the O&M biz clean.
The structure announced lets us examine “forward KEP”, and anticipate interest and valuations post-spin, which is “supposed to” happen in Q4. We’re in Q4 now, and Keppel is interesting here.

Acquisition of Steradian Semiconductors complements Renesas’ partnership with Tata Group and expands its presence in India.
Follows purchase of Reality Analytics of the U.S. and Celeno Communications of Israel. Global footprint growing, technological sophistication rising to meet ADAS, AI and IIoT requirements.
P/E below 10x on current guidance, but vulnerable to semiconductor down-cycle. Accumulate for long-term potential.

State-owned infrastructure construction firm Sichuan Road and Bridge Group Co. Ltd. (SRBG) is planning to acquire a 50% stake in a major potash mine in East Africa in its latest push into the mining industry.
Chengdu-headquartered SRBG has signed a $166 million deal to acquire half the stake in the Colluli Potash Project in Eritrea from Australian fertilizer developer Danakali Ltd.
Once the deal is finalized, the Colluli potash mine will be SRBG’s second mining project in Eritrea

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