IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>On March 8, <a href="https://www.bloomberg.com/news/articles/2024-03-08/top-asia-poultry-firm-japfa-owners-said-to-mull-go-private-deal?embedded-checkout=true" target="_blank" rel="noopener">Bloomberg reported</a> that <a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa Ltd (JAP SP)</a> owners were considering taking it private and started talks about a loan of around US$150 million. </li>
<li>Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years. </li>
<li>An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.  </li>
</ul>


On March 8, Bloomberg reported that Japfa Ltd (JAP SP) owners were considering taking it private and started talks about a loan of around US$150 million. 
Japfa has faced ongoing profitability issues since 2022 due to cost-of-living pressures. Privatisation interest is unsurprising, as the shares have been down 72% over the last three years. 
An attractive premium would be required, irrespective of the offer structure. At a S$0.26 offer (20% premium to last close), Japfa would trade in line with peer multiples.  


Japfa (JAP SP): Evaluating a Potential Privatisation

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>Prabowo-Gibran’s team indicated its free lunch program (MSG) would be fully rolled out by FY29F needing 1.2mn tons of chicken p.a.</li><li>We see no clear evidence yet that MSG will bring additional demand, while uncertainty on the program poses downside risk for integrators.</li><li>We maintain the sector’s rating at Neutral, with CPIN (Buy TP of Rp5,200) as our top pick.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prabowo-Gibran’s team indicated its free lunch program (MSG) would be fully rolled out by FY29F needing 1.2mn tons of chicken p.a.We see no clear evidence yet that MSG will bring additional demand, while uncertainty on the program poses downside risk for integrators.We maintain the sector’s rating at Neutral, with CPIN (Buy TP of Rp5,200) as our top pick.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Poultry - Still Unclear Benefits from the Potential MSG Program on Poultry Demand

<ul><li>We cut our FY23/FY24F earnings estimates for the sector by 34.5/23.2% due to lower-than-expected LB and higher-than-expected corn prices.</li><li>We see downside risks to valuations from potentially soft 4Q23 results, high corn prices, and relatively higher local fund positions.</li><li>We downgrade the sector’s rating to Neutral, with CPIN (Buy, TP of Rp5,200) as our top pick.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We cut our FY23/FY24F earnings estimates for the sector by 34.5/23.2% due to lower-than-expected LB and higher-than-expected corn prices.We see downside risks to valuations from potentially soft 4Q23 results, high corn prices, and relatively higher local fund positions.We downgrade the sector’s rating to Neutral, with CPIN (Buy, TP of Rp5,200) as our top pick.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Poultry: ST Negatives from Earnings, Data and Fund Positioning (NEUTRAL)

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

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Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/lippo-malls-indonesia-retail-trust' target='_blank' rel='noopener'>Lippo Malls Indonesia Retail Trust</a></li><li><a href='/entities/vedanta-resources-ltd' target='_blank' rel='noopener'>Vedanta Resources</a></li><li><a href='/entities/renew-energy-global-plc' target='_blank' rel='noopener'>ReNew Energy Global </a></li><li><a href='/entities/china-jinmao-holdings-group' target='_blank' rel='noopener'>China Jinmao Holdings</a></li><li><a href='/entities/geely-automobile-holdings-ltd' target='_blank' rel='noopener'>Geely Auto</a></li></ol>and more...

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Indonesia

PT Japfa Comfeed Indonesia Tbk manufactures animal feed, breeds and processes chickens, and operates aquaculture farms.  The Company trades its products domestically and internationally.

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Japfa Comfeed Indonesia (JPFA IJ)

Japfa (JAP SP): Evaluating a Potential Privatisation

An attractive takeover premium would be required, irrespective of the offer structure. Funding could be an issue due to the high current leverage.

Arun George

Poultry - Still Unclear Benefits from the Potential MSG Program on Poultry Demand

Prabowo-Gibran’s team indicated its free lunch program (MSG) would be fully rolled out by FY29F needing 1.2mn tons of chicken p.a.

BRI Danareksa Research

Poultry: ST Negatives from Earnings, Data and Fund Positioning (NEUTRAL)

We cut our FY23/FY24F earnings estimates for the sector by 34.5/23.2% due to lower-than-expected LB and higher-than-expected corn prices.

BRI Danareksa Research

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