In today’s briefing:
- IdeaForge Technologies IPO- Forensic Analysis
- Tryt IPO – The Positives – Supportive Macro Backdrop and Has Weathered the Pandemic Well
- Chow Tai Fooks’ Offer For NWS (659 HK). Buy NWD (17 HK)
- Meilan Airport (357 HK): Positive on The Only China Airport Trading Below Book Value
- J&T Global Express IPO: SEA Margins Declining and Other Businesses Far from Profitability
- Takamiya Co., Ltd (2445 JP) – 23/3 Full Year Follow-Up
- Update Note – Steelcase, Inc. (SCS)
IdeaForge Technologies IPO- Forensic Analysis
- 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 IPO – The Positives – Supportive Macro Backdrop and Has Weathered the Pandemic Well
- 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 Fooks’ Offer For NWS (659 HK). Buy NWD (17 HK)
- 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.
Meilan Airport (357 HK): Positive on The Only China Airport Trading Below Book Value
- 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.
J&T Global Express IPO: SEA Margins Declining and Other Businesses Far from Profitability
- 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.
Takamiya Co., Ltd (2445 JP) – 23/3 Full Year Follow-Up
- 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.
Update Note – Steelcase, Inc. (SCS)
- 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.
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