Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

European Event-Driven Analyst

Jesus Rodriguez Aguilar

On 24 April, <a href="https://www.smartkarma.com/entities/leonardo-spa" target="_blank" data-smartkarma-citation="entities:21190:1" rel="noopener">Leonardo SpA (LDO IM)</a> <a href="https://www.leonardocompany.com/en/press-release-detail/-/detail/24-04-2021-leonardo-acquista?f=%2Finvestors" target="_blank" rel="noopener">agreed to acquire</a> a 25.1% stake in <a href="https://www.smartkarma.com/entities/hensoldt-ag" target="_blank" data-smartkarma-citation="entities:33024:1" rel="noopener">Hensoldt AG (HAG GR)</a>  from KKR for €23 per share.<ul>
<li>For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.</li>
<li>The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.</li>
</ul>This follows conversations with other firms with interests in defence, which included <a href="https://www.smartkarma.com/entities/indra-sistemas-sa" target="_blank" data-smartkarma-citation="entities:21277:1" rel="noopener">Indra Sistemas Sa (IDR SM)</a>, Leonardo, <a href="https://www.smartkarma.com/entities/saab-ab" target="_blank" data-smartkarma-citation="entities:22469:1" rel="noopener">Saab AB (SAABB SS)</a> and <a href="https://www.smartkarma.com/entities/thales-sa" target="_blank" data-smartkarma-citation="entities:21483:1" rel="noopener">Thales SA (HO FP)</a>.Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

On 24 April, Leonardo SpA (LDO IM) agreed to acquire a 25.1% stake in Hensoldt AG (HAG GR)  from KKR for €23 per share.
For an implied equity value of €2,415 mn and an implied EV of €2,980 mn.
The consideration represents 1.6x EV/Fwd Revenue, 9.9x EV/Fwd EBITDA and 21.2x Fwd P/E.
This follows conversations with other firms with interests in defence, which included Indra Sistemas Sa (IDR SM), Leonardo, Saab AB (SAABB SS) and Thales SA (HO FP).Leonardo seeks to increase the defence electronics business and access new European defence programs. Both Hensoldt and Leonardo have co-operated on the Eurofighter and this tie-up will allow them to gain critical mass vs. other European champions such as Dassault and Thales.The German government has a golden share in the company, which allows the German government to block strategic decisions.KKR has succeeded in extracting value from its investment: from €12/share upon listing to €17.07/share in the 25.1% sale to KfW and now €23/share in this 25.1% sale to Leonardo. KKR retains c.18% of Hensoldt.On 23 April, Hensoldt closed at €15.58. Upon opening of the market on 26 April, expect Hensoldt to increase to levels c. €23 per share.Recommendation is long Hensoldt, TP €24.6 (implied EV/Fwd EBITDA valuation from comparables), c. 7% upside to the price agreed between KKR and Leonardo.

Leonardo/Hensoldt: Acquisition of Controlling Stake

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB and Federal Reserve. Considering overhead resistance and continued mixed economic and market signals, we remain squarely in the neutral camp.  We outline important technical levels across major indexes and highlight attractive opportunities within the Manufacturing, Transportation, and Materials Sectors, most of which hail from Europe and Japan.

The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB and Federal Reserve. Considering overhead resistance and continued mixed economic and market signals, we remain squarely in the neutral camp.  We outline important technical levels across major indexes and highlight attractive opportunities within the Manufacturing, Transportation, and Materials Sectors, most of which hail from Europe and Japan.

Global Equity Strategy: Overhead Resistance Looms

Co-founder & Managing Director, Marketnomix 

Rajan Govil

Co-founder & Managing Director

Marketnomix 

Macroeconomics

Industrial production in Eurozone continues to struggle to gain momentum and came in weaker than expected in June which poses a risk to our GDP outlook of 1.3% for 2016 (lowered from 1.6% after the Brexit vote). While the weakness in factory output was seen ahead of the Brexit vote, the effect of UK’s exit is clearly felt in the aftermath, and it is expected to come in weaker going forward.Industrial Production (IPI) in the Eurozone came in at 0.4% y-o-y in June 2016 similar to the growth seen…

Industrial production in Eurozone continues to struggle to gain momentum and came in weaker than expected in June which poses a risk to our GDP outlook of 1.3% for 2016 (lowered from 1.6% after the Brexit vote). While the weakness in factory output was seen ahead of the Brexit vote, the effect of UK’s exit is clearly felt in the aftermath, and it is expected to come in weaker going forward.Industrial Production (IPI) in the Eurozone came in at 0.4% y-o-y in June 2016 similar to the growth seen…

EUROZONE: Weak Industrial Production Poses Risk to GDP Growth

Weakness in industrial production growth in May was seen across most major sectors and economies, which clearly shows that the Euro Zone industry is struggling to gain momentum which poses a risk to our GDP outlook of 1.3% for 2016 (lowered from 1.6% after the Brexit vote).Industrial Production (IPI) in the Eurozone slowed to 0.6% y-o-y in May 2016 after having recorded a growth of 2.1% y-o-y in April 2016 on a seasonally and working day adjusted (swda) basis. On a 3 month moving average (3mma)…

Weakness in industrial production growth in May was seen across most major sectors and economies, which clearly shows that the Euro Zone industry is struggling to gain momentum which poses a risk to our GDP outlook of 1.3% for 2016 (lowered from 1.6% after the Brexit vote).Industrial Production (IPI) in the Eurozone slowed to 0.6% y-o-y in May 2016 after having recorded a growth of 2.1% y-o-y in April 2016 on a seasonally and working day adjusted (swda) basis. On a 3 month moving average (3mma)…

EUROZONE: Industrial Production GROWTh Slows ACROSS SECTORS AND COUNTRIES

Italy

Leonardo SpA operates as a technology company. The Company provides its services to the aerospace, defense, and security sectors globally. Leonardo works on helicopters, aircrafts, aerostructures, airborne and space systems, land and naval defense electronics, and defense systems.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Leonardo SpA (LDO IM)

Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Leonardo/Hensoldt: Acquisition of Controlling Stake

On 23 April, Hensoldt closed at €15.58. Upon opening on 26 April, expect share price to increase to c. €23 per share. On an EV/Fwd EBITDA basis,...

Jesus Rodriguez Aguilar

Global Equity Strategy: Overhead Resistance Looms

The broad global indexes (MSCI ACWI, ACWI ex-US, and EAFE) remain near logical resistance as investors await monetary policy decisions from the ECB...

Vermilion Research

EUROZONE: Weak Industrial Production Poses Risk to GDP Growth

Industrial production in Eurozone continues to struggle to gain momentum and came in weaker than expected in June which poses a risk to our GDP...

Rajan Govil

EUROZONE: Industrial Production GROWTh Slows ACROSS SECTORS AND COUNTRIES

Weakness in industrial production growth in May was seen across most major sectors and economies, which clearly shows that the Euro Zone industry...

Rajan Govil

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)