In today’s briefing:
- Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction
- Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation
- Jiangsu Expressway (177 HK): A Decent Play Even After Rally
- Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair
Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Nexus Select Trust (NST IN), Tata Technologies (TATATECH IN), ADICON Holdings Limited (ADI HK), Horizon Construction Development (1887128D HK) IPOs.
- Event-Driven developments – ARTERIA Networks Corp (4423 JP), SBI Shinsei Bank (8303 JP), Toshiba Corp (6502 JP), Hailan Holdings (2278 HK), Inner Mongolia Yitai Coal Company Ltd (3948 HK), Allkem.
Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation
- Horizon Construction Development (1887128D HK) is looking to raise US$223m in its upcoming Hong Kong IPO.
- HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
- In our previous notes, we looked at the company’s past performance and refiled PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.
Jiangsu Expressway (177 HK): A Decent Play Even After Rally
- We find good value in Jiangsu Expressway (H) (177 HK) – its 8.3x PER is cheap relative to 10.4% EPS CAGR and P/B multiple of 1.06x is below historical average.
- It has an extremely secured dividend stream for the next two years, yielding at least 6.3%. 1Q23 result showed a solid recovery, and potentially adding upside to earnings outlook.
- Key drivers are stronger traffic recovery, rise in contribution from clean energy, margin expansion through cost control and completion of new projects in the next two years.
Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair
- In response to media feedback calling out the low-balled Offer, the Ong family bumped the Offer Price for Lian Beng (LBG SP) by 9.7% to S$0.68/share and declared terms final.
- At 0.43x P/RNAV, and with the bulk of the assets related to investment/development property, the price was still wrong,
- The Circular is now out. The IFA considered terms to be not fair and not reasonable. The same opinion as in the 2021 Offer.
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