In today’s briefing:
- Tryt IPO – Thoughts on Valuation – Even with Optimistics Forecasts, The Firm Isn’t Cheap
- Take Private Looming
- Nexteel IPO Preview
- Stark Corporation: Not the Guy from the Movie
Tryt IPO – Thoughts on Valuation – Even with Optimistics Forecasts, The Firm Isn’t Cheap
- Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- We have looked at the company’s past performance and track record against peers in our earlier notes. In this note, we will discuss our thoughts on valuation.
Take Private Looming
- On 28 June, after market close Fomento De Construcciones Y Co (FCC SM) announced the repurchase and redemption of 7% of its shares at €12.5/share (38% premium, €5.4 billion implied market cap).
- According to my calculations, Carlos Slim will hold, directly and indirectly, c. 88.2% of the share capital post repurchase. That, to me, heralds a delisting offer further down the road.
- The offer represents 7.1x EV/Fwd EBITDA, 8.9x Fwd P/E (on IBES forecasts). Median TP is €14.7. Gross spread is 5.3% (plus the €0.5 dividend). It seems a safe long.
Nexteel IPO Preview
- Nexteel is getting ready to complete its IPO in Korea in August. Nexteel is a steel pipe manufacturing company. The IPO price range is from 11,500 won to 12,500 won.
- The IPO offering size is from 80.5 billion won to 87.5 billion won. The expected market cap is from 299 billion won to 325 billion won.
- Nexteel’s sales increased at a CAGR of 76.4% from 2020 to 2022. The company’s operating profit surged from 1.5 billion won in 2020 to 181.3 billion won in 2022.
Stark Corporation: Not the Guy from the Movie
- STARK Corporation (STARK TB) (Stark) defaulted on its interest payments on 2-June, leading to a default event.
- Stark’s default has exposed the structural weakness in the Thai bond market which is worth discussion.
- We do not believe there is a reasonable basis for calculating the bond recovery value at this juncture.
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