In today’s briefing:
- Fresh Low-PBR Policy Color Hitting the Local Tape Today
- SingPost (SPOST SP): More Non-Core Divestments – Slowly But Surely
- IHI Corporation (TSE:7013) – Rebound in Aero Drives Multi-Year Upside
- Fortive Spins Off Ralliant: Big US and Global Index Implications Ahead
- DH Shipbuilding IPO Preview
- Samyang Comtech IPO Valuation Analysis
- COSCO Shipping Energy (1138 HK): A Viable Play on the Israel-Iran Conflict
- Q4 Follow-Up – TEKKEN CORPORATION (1815 JP) – May 28, 2025
Fresh Low-PBR Policy Color Hitting the Local Tape Today
- The ruling party’s KOSPI 5,000 task force is now eyeing low PBR names with talk of direct penalties — a sharper shift from the prior admin’s soft-touch value-up approach.
- Low PBR penalties may bypass the Assembly, fast-tracked via KRX or enforcement rule tweaks — rollout could follow swiftly post commercial code passage, possibly within 2–3 months.
- Market’s zeroing in on low PBR, high ROE large caps — with 0.8x flagged as the penalty line, 56 KRW 1T+ names screen as potential re-rating plays.
SingPost (SPOST SP): More Non-Core Divestments – Slowly But Surely
- After selling its Aussie-based logistics ops earlier this year, Singapore Post (SPOST SP) continues to divest non-core assets and businesses.
- The latest is the sale and leaseback of 10 Housing & Development Board shophouses, which could net S$50mn.
- SPOST has declared a S$0.09/share special dividend from the Aussie sale. Shareholders will vote on the dividend at the AGM on the 23rd July.
IHI Corporation (TSE:7013) – Rebound in Aero Drives Multi-Year Upside
- Sharp turnaround from FY22–FY24, with revenue rising from ¥1.17 tn to ¥1.63 tn and operating profit swinging from losses to ¥143.5 bn, led by civil aero engines and defense.
- The order backlog has grown to ¥1.6 tn (↑¥226 bn YoY), underpinned by defense orders and aftermarket demand, with management guiding continued top-line and margin expansion.
- EPS is forecast to grow at a ~7% CAGR through FY27; at ~18x FY27E P/E and ~9x EV/EBITDA, valuations appear reasonable for a capital-efficient aero-led compounder.
Fortive Spins Off Ralliant: Big US and Global Index Implications Ahead
- Fortive (FTV US) to spin off its Precision Technologies segment, under the name “Ralliant”.
- Key details on dates, transaction rationale, structure and estimated market capitalisation of the spin-off company.
- Significant index implications ahead, across US and Global indexes, on an intra-quarter basis.
DH Shipbuilding IPO Preview
- DH Shipbuilding is getting ready to complete its IPO in KOSPI in August. DH Shipbuilding would be the second largest IPO in Korea after LG CNS so far this year.
- The IPO price range is 42,000 won to 50,000 won per share. At the high end of the IPO price range, it could raise as much as 500 billion won.
- The bankers used four companies including HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, and HD Hyundai Mipo as comps for DH Shipbuilding.
Samyang Comtech IPO Valuation Analysis
- Our comparable companies valuation analysis suggests implied market cap of 557 billion won or target price of 13,187 won per share.
- This represents a 71% upside from the high end of the IPO price range (7,700 won per share). Given the excellent upside, we have a Positive view of this IPO.
- One could argue that valuation discount on Samyang Comtech may be too conservative mainly due to higher sales growth, ROE, and operating margins of Samyang Comtech relative to the comps.
COSCO Shipping Energy (1138 HK): A Viable Play on the Israel-Iran Conflict
- Cosco Shipping Energy Transportation (1138 HK) will benefit from the oil supply worry as Israel and Iran are unlikely to reach a “real” peace agreement in the short term.
- The worry, or actual, closure of Hormuz will raise VLCC rates by escalating reserve building, increasing demand for alternative routes, a higher risk premium, and panic chartering.
- After yesterday’s retreat, CSET trades on an undemanding 5.8x PER and 8.8% yield for FY25F. With over 12% ROE, its 0.73x P/B is cheap, below the average since 2023.
Q4 Follow-Up – TEKKEN CORPORATION (1815 JP) – May 28, 2025
- On May 13, TEKKEN CORPORATION (hereinafter, the Company) announced its full-year FY2025/3 consolidated financial results.
- Net sales rose 0.8% YoY to JPY 185,114 mn, and operating profit surged 261% YoY to JPY 3,459 mn, almost in line with the Company’s revised estimate as of April 22, confirming its upward earnings momentum.
- However, SIR believes the results indicate lingering challenges in profitability and financial dynamics, as actual ROE remained at 4.8%, falling short of the Company’s Medium-Term Management Plan scenario, which emphasizes ROE improvement.
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