Daily Brief Industrials: Toshiba Corp, Penguin International, Ventia, Growatt Technology, China Communications Construction, Coldspace Agrotech, Blu-Smart Mobility Pvt , Adani Ports & Special Economic Zone and more

• Toshiba is trading at a 12-13% annualised return on the arb when using the expected Tender Offer Start Date proposed in the Takeover Announcement on 23 March 2023.
• On Day 1-2 post-announcement, Toshiba traded at an 11-13% annualised spread. Since the announcement, a 12-name Peer Basket is up 11+% meaning Toshiba back end risk has shrunk.
• Forward consensus EPS ratios have fallen, in part due to the shift forward one fiscal year by comps. We’ll see where those lie in a week when earnings come.

• Penguin International (PBS SP) has disclosed a voluntary unconditional offer from Dymon Asia, Executive Chairman and Managing Director at S$0.82 per share, a 15.5% premium to the undisturbed price. 
• The offer price is attractive, represents an 8-year share price high, and is shy of the 10-year high of S$0.825. It is also 26.2% higher than the 2021 offer.
• The offeror aims to privatise Penguin. Hitting the 90% compulsory acquisition threshold implies a minority acceptance rate of around 44%, which is eminently achievable due to an attractive offer.

• Ventia (VNT AU) completed an A$300m placement overnight with Apollo and CIMIC Group Ltd (CIM AU) selling around 14% of the shares outstanding at a small discount to the close.
• The placement will significantly increase Ventia (VNT AU)‘s float and make the stock a high probability inclusion to the S&P/ASX 200 (AS51 INDEX) at the June rebalance.
• We now expect two changes to the S&P/ASX 200 (AS51 INDEX) in June and the impact on the stocks is over 5.5 days of ADV to trade.

• Ventia (VNT AU)‘s two largest shareholders, Apollo Global Management and CIMIC Group, aim to raise around US$166m via a secondary block deal. 
• The deal is a slightly large one to digest at 12.5 days of three month ADV, 23 days of ADV and about 11.5% of current mcap. 
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Growatt Technology (1833969D CH) is looking to raise about US$400m in its upcoming Hong Kong IPO, after downsizing from an earlier US$1bn float in Nov 2022.
• Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
• In this note, we will provide a quick peer comparison update and our latest thoughts on valuation.

• China Communications Construction (1800 HK) should see more valuation upside as it narrows the discount to book through more asset disposal, spin-off, restructuring and securitisation.
• Healthy 1Q23 earnings demonstrated underlying business strength. We expect new contract growth to accelerate in the rest of this year. Backlog estimated to cover 4.7x FY23F revenue.
• Gross margin has stabilised in 1Q23 when compared with 1Q in previous years. Contribution from concessions will improve as traffic recovers and projects get mature. 

• Coldspace, an Indonesian integrated cold chain solutions provider, today announced the completion of a US$3.8 million seed funding round
• With this funding, Coldspace plans to expand its service capacity, including greater capacity for cold storage, reefer trucks, fulfilment, and geographic expansions
• The company offers businesses and consumers cold storage facilities and reefer trucks through its own inventory as well as a third-party aggregated marketplace of cold chain partners empowered through the company’s tech stack.

• The use of electric vehicles (EVs) is on the rise in various parts of the world, including India.

• In recent years, companies have been racing to accelerate the adoption of the electrified tech in the country.

• BluSmart Mobility, for instance, provides a ride-hailing service with 3,500 EVs operating in Delhi and Bengaluru. The company is also developing an EV charging hub infrastructure.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone