INDUSTRIALS Archives | Page 171 of 295 | Smartkarma

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, Tryt Inc (9164 JP) will announce its price range in the coming week, while Kelun Biotech tries to break the US$100m+ deal silence in HK. 
• On the placement front, even Singapore joined in the placement action this week, with only HK deal remaining absent over the past month.

• 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.

• 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 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 (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.

• 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.

• 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 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 (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.

• The share price of MTR Corp (66 HK) has not moved and lagged behind other transport operators in Asia.
• High-Frequency numbers from the company has shown improvement and signs that the Chinese tourists are gradually returning.
• The reopening of the checking in facility in downtown Hong Kong is another sign that more tourists are expected to come. 

• YTD performance of 61% has been stellar and index beating but the concern remains whether there will be more left. 
• Keisei Electric Railway Co (9009 JP) April 23 ridership and revenue growth provide momentum despite the still non-existence arrival of Chinese tourists. 
• Chinese tourists’ arrival in 2H 23 may be slow but chances are that they will arrive in Japan and will boost both ridership and revenue.

• We remain bullish on Komatsu despite returning a positive 37% return over the past year. 
• Q1 results are likely to exceed expectations and guidance is likely to be cautious, due to forex, pricing and cost factors.
• Komatsu is still attractively valued compared to its peers and historical averages, and has 20% upside potential.

Initiating coverage

• A successful market disruptor – Japan Elevator Service (JES) has been executing its growth strategy, increasing market share in the domestic elevator maintenance market via organic and acquisitive growth.
• Operating in a market dominated by OEMs, it is making solid headway by 1) offering a cost-effective solution, 2) a differentiated service offering technical services and availability of parts on par with the OEMs, and 3) experiencing rapid growth through by establishing a nationwide network providing regionally rooted services.
• Pursuing growth opportunities – we highlight two drivers for the company; 1) secular growth as building owners convert to reputable independent providers for cost management, and 2) structural demand from aging elevators requiring modernization.

• J&T’s China growth will slow from a lack of (1) M&A targets, and (2) cash to sustain a price war. SEA’s growth will slow, and profit margin decline due to
•  (1) Shopee in-sourcing of high-profit parcels(2) PE-backed rivals using price wars to gain market share. Lower penetration of China supply-chain platforms will stunt J&T’s growth in New Markets, we expect.
• In our base case we value J&T at US$ 10 bn, which is (25%) vs. J&T’s valuation in its latest round of funding.

• The share price of MTR Corp (66 HK) has not moved and lagged behind other transport operators in Asia.
• High-Frequency numbers from the company has shown improvement and signs that the Chinese tourists are gradually returning.
• The reopening of the checking in facility in downtown Hong Kong is another sign that more tourists are expected to come. 

• YTD performance of 61% has been stellar and index beating but the concern remains whether there will be more left. 
• Keisei Electric Railway Co (9009 JP) April 23 ridership and revenue growth provide momentum despite the still non-existence arrival of Chinese tourists. 
• Chinese tourists’ arrival in 2H 23 may be slow but chances are that they will arrive in Japan and will boost both ridership and revenue.

• We remain bullish on Komatsu despite returning a positive 37% return over the past year. 
• Q1 results are likely to exceed expectations and guidance is likely to be cautious, due to forex, pricing and cost factors.
• Komatsu is still attractively valued compared to its peers and historical averages, and has 20% upside potential.

Initiating coverage

• A successful market disruptor – Japan Elevator Service (JES) has been executing its growth strategy, increasing market share in the domestic elevator maintenance market via organic and acquisitive growth.
• Operating in a market dominated by OEMs, it is making solid headway by 1) offering a cost-effective solution, 2) a differentiated service offering technical services and availability of parts on par with the OEMs, and 3) experiencing rapid growth through by establishing a nationwide network providing regionally rooted services.
• Pursuing growth opportunities – we highlight two drivers for the company; 1) secular growth as building owners convert to reputable independent providers for cost management, and 2) structural demand from aging elevators requiring modernization.

• J&T’s China growth will slow from a lack of (1) M&A targets, and (2) cash to sustain a price war. SEA’s growth will slow, and profit margin decline due to
•  (1) Shopee in-sourcing of high-profit parcels(2) PE-backed rivals using price wars to gain market share. Lower penetration of China supply-chain platforms will stunt J&T’s growth in New Markets, we expect.
• In our base case we value J&T at US$ 10 bn, which is (25%) vs. J&T’s valuation in its latest round of funding.

• Napier (Temasek) is looking to raise around US$300m via its secondary selldown in Singapore Airlines (SIA SP).
• The deal isn’t very well flagged given that the investor hadn’t earlier given any explicit guidance of a selldown. 
• Post-Selldown, Temasek will still own over 50% of SIA’s shares outstanding, so the overhang will be a large one.

• 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 in our earlier notes, in this note we will undertake a peer comparison.

• AKR Corporindo provided an unseasonally upbeat indication for 2Q2023 for its petroleum and chemical product distribution businesses, and for the strong demand pick up for its retail JV with BP.
• Indications suggest that the company is well on track to meet its FY2023 guidance for its distribution businesses, and is optimistic about the build-out of its retail filling stations. 
• Its JIIPE industrial estate secured 17 hectares in 2Q2023 but its pipeline is now 300-350 hectares, underlining the increasing importance to AKR Corporindo (AKRA IJ).

• Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July. 
• In TRYT IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on mid-tier revenue growth rates, margin pressure led by rising labour expenses, bottom-tier FCF margin and high leverage.

• Redox (RDX AU), a chemical and ingredients distributor, raised around US$270m in its Australia IPO. The stock will begin to trade on 3rd July 2023.
• In 2022 it was ranked as the largest chemicals and ingredients distributor in Australia, as well as the 13th largest in the Asia Pacific region and the 35th largest worldwide
• We have looked at the company’s past performance in our previous note, in this note we will talk about the updates since then and the trading dynamics.

• Napier (Temasek) is looking to raise around US$300m via its secondary selldown in Singapore Airlines (SIA SP).
• The deal isn’t very well flagged given that the investor hadn’t earlier given any explicit guidance of a selldown. 
• Post-Selldown, Temasek will still own over 50% of SIA’s shares outstanding, so the overhang will be a large one.

• 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 in our earlier notes, in this note we will undertake a peer comparison.

• AKR Corporindo provided an unseasonally upbeat indication for 2Q2023 for its petroleum and chemical product distribution businesses, and for the strong demand pick up for its retail JV with BP.
• Indications suggest that the company is well on track to meet its FY2023 guidance for its distribution businesses, and is optimistic about the build-out of its retail filling stations. 
• Its JIIPE industrial estate secured 17 hectares in 2Q2023 but its pipeline is now 300-350 hectares, underlining the increasing importance to AKR Corporindo (AKRA IJ).

• Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July. 
• In TRYT IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on mid-tier revenue growth rates, margin pressure led by rising labour expenses, bottom-tier FCF margin and high leverage.

• Redox (RDX AU), a chemical and ingredients distributor, raised around US$270m in its Australia IPO. The stock will begin to trade on 3rd July 2023.
• In 2022 it was ranked as the largest chemicals and ingredients distributor in Australia, as well as the 13th largest in the Asia Pacific region and the 35th largest worldwide
• We have looked at the company’s past performance in our previous note, in this note we will talk about the updates since then and the trading dynamics.

• Nws Holdings (659 HK) announced a pre-conditional voluntary general offer from the Cheng family at HK$9.15 or HK$9.47 per share (with a potential 2HFY2023 dividend of HK$0.32 per share).
• The pre-condition related to regulatory approval from the Insurance Authority of Hong Kong and the Bermuda Monetary Authority is a formality due to the Cheng family’s current sway over NWS.
• The key condition is approval by independent New World Development (17 HK) shareholders which is likely as the offer is attractive, reduces NWD’s gearing and results in a special dividend.  

• Redox (RDX AU), a leading chemical and ingredients distributor, is looking to raise A$402m (US$268m) in its IPO and is expected to start trading on the ASX on 3 July.
• With the float expected to be over 30%, the stock is eligible for inclusion in the S&P/ASX indices but limited trading history could only mean S&P/ASX300 inclusion in March 2024.
• With 70% of the shares subject to lock-up arrangements, buying from ASX300 passive trackers will be small and there will be limited inclusion in other indices too.

• 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.
• In this note, we will talk about the not so positive aspects of the deal.

• J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• In this note, we talk about the positive aspects of the deal.

• In this insight, we take a look at Quiddity’s flow expectations for the September 2023 index rebalance.
• Since the semi-annual rebalance events are in June and December, there will not be any “regular” changes caused by dividend-yield rankings.
• However, external factors such as deletion from the selection universe and a shift in tracking AUM assumptions can still trigger US$130mn capping flows in September 2023.

• Walsin Lihwa (1605 TT) is looking to raise US$355m in its Taiwan GDS offering.
• The firm is offering 27m GDS at a 4.8-7.8% discount to last close. The deal isn’t a very large one for the firm to digest on an ADV basis.
• As per the firm, proceeds from this GDS issuance is expected to purchase raw materials in foreign currencies.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
• At present, I see two changes for the T50 index and one change for the T100 index.
• The T100 change is an important one as the expected DEL Wisdom Marine Lines (2637 TT) could also get deleted from the TDIV index.

• Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.   
• In 2022, Tyrt was the leading provider of personnel dispatch and personnel introduction services in Japan’s welfare and nursing sector.
• The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA margins and rising staff retention rates.

• J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• In this note, we talk about the not-so-positive aspects of the deal.

• We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.
• We continue to watch short-term support at 4300, and we cannot be bearish if the S&P 500 is above 4300.
• The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170

• Nws Holdings (659 HK) announced a pre-conditional voluntary general offer from the Cheng family at HK$9.15 or HK$9.47 per share (with a potential 2HFY2023 dividend of HK$0.32 per share).
• The pre-condition related to regulatory approval from the Insurance Authority of Hong Kong and the Bermuda Monetary Authority is a formality due to the Cheng family’s current sway over NWS.
• The key condition is approval by independent New World Development (17 HK) shareholders which is likely as the offer is attractive, reduces NWD’s gearing and results in a special dividend.  

• Redox (RDX AU), a leading chemical and ingredients distributor, is looking to raise A$402m (US$268m) in its IPO and is expected to start trading on the ASX on 3 July.
• With the float expected to be over 30%, the stock is eligible for inclusion in the S&P/ASX indices but limited trading history could only mean S&P/ASX300 inclusion in March 2024.
• With 70% of the shares subject to lock-up arrangements, buying from ASX300 passive trackers will be small and there will be limited inclusion in other indices too.

• 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.
• In this note, we will talk about the not so positive aspects of the deal.

• J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• In this note, we talk about the positive aspects of the deal.

• In this insight, we take a look at Quiddity’s flow expectations for the September 2023 index rebalance.
• Since the semi-annual rebalance events are in June and December, there will not be any “regular” changes caused by dividend-yield rankings.
• However, external factors such as deletion from the selection universe and a shift in tracking AUM assumptions can still trigger US$130mn capping flows in September 2023.

• Walsin Lihwa (1605 TT) is looking to raise US$355m in its Taiwan GDS offering.
• The firm is offering 27m GDS at a 4.8-7.8% discount to last close. The deal isn’t a very large one for the firm to digest on an ADV basis.
• As per the firm, proceeds from this GDS issuance is expected to purchase raw materials in foreign currencies.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the September 2023 Rebalance.
• At present, I see two changes for the T50 index and one change for the T100 index.
• The T100 change is an important one as the expected DEL Wisdom Marine Lines (2637 TT) could also get deleted from the TDIV index.

• Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.   
• In 2022, Tyrt was the leading provider of personnel dispatch and personnel introduction services in Japan’s welfare and nursing sector.
• The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA margins and rising staff retention rates.

• J&T Express, a global logistics service provider, is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• In this note, we talk about the not-so-positive aspects of the deal.

• We discussed last week how consolidation was likely, so far that has played out with the SPX back testing the 4300-4325 area which we anticipated would cap upside for 2023.
• We continue to watch short-term support at 4300, and we cannot be bearish if the S&P 500 is above 4300.
• The Russell 2000 (IWM) is back to test support at $180; we would expect to see this hold as support, but a failure to hold would mean a trip to $170

• IdeaForge Technology Limited (1475641D IN)‘s IPO opens for subscription this week. 
• The company is said to be the market leader in manufacturing of drones, an industry that is expected to grow rapidly in the next five years.
• However, there are several forensic takeaways that include disclosure errs relating to litigations, treatment of R&D, cash generation, etc.

• 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.
• In this note, we will talk about the positive aspects of the deal.

• Chow Tai Fook (CTFE) has made a voluntary cash Offer for New World Development (17 HK)‘s (NWD) 60.88%-held NWS Holdings (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed. 
• CTFE and connected parties hold 45.24% of NWD, therefore the parent is effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
• The Offer is subject to regulatory approvals in Hong Kong and Bermuda. These will not be an issue given CTFE is NWD’s ultimate shareholder. 

• A slew of bad news from weak China consumption, depreciating RMB to negative progress in an arbitration sent Meilan Airport stock down to below book value.
• Yet when it comes to the fundamental of the company itself, we believe concerns are over-blown and very much priced in.
• Meilan Airport is the most under-valued major airport in China airport space in our view. Patience will pay off.

• Global logistics and express delivery service provider J&T Express (1936374D CH) has filed for an IPO on the HKEx to raise about US$500m-1bn.
• J&T’s SEA operation is the only gross margin making business, however, the segment’s gross margin has been on a declining trend.
• Though the gross losses of China biz has reduced during 2020-2022, J&T continues to invest in China to capture market share which we think would delay profits.

• FY23/3 full-year results were announced in the last month.
• In its consolidated earnings, Operating profit rose 33.9%, ¥2,253 mn, on a 5.3% rise in sales, to ¥41,894 mn. Ordinary profit was up 22.9%, to ¥2,400 mn, and net profit rose 51.3%, to ¥1,460mn.
• Compared to the company’s forecast at the time of the 3Q results announcement, net sales fell short by about 7%, but operating profit and net profit were in line. 

• This note follows up on the Steelcase 1QFY24 earnings release, management’s earnings conference call, and our earnings analysis note from June 22.
• Herein, we refresh our estimates for Steelcase.
• Steelcase has been tied to the fortunes of commercial/contract furniture, where the company is a global leader.