IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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>The terms for the proposed combination of Keppel O&amp;M and <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> were announced. The agreed equity value exchange ratio between Keppel O&amp;M and Sembcorp Marine is 56%:44%. </li>
<li>The proposed combination will require <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> and Sembcorp Marine shareholder approvals at separate EGMs and is expected to close in 4Q2022.</li>
<li>The transaction is a big win for Keppel shareholders as the proposed combination creates S$9.4 billion of value, which is around 80% of Keppel’s market cap at the last close.</li>
</ul>


The terms for the proposed combination of Keppel O&amp;M and Sembcorp Marine (SMM SP) were announced. The agreed equity value exchange ratio between Keppel O&amp;M and Sembcorp Marine is 56%:44%. 
The proposed combination will require Keppel Corp (KEP SP) and Sembcorp Marine shareholder approvals at separate EGMs and is expected to close in 4Q2022.
The transaction is a big win for Keppel shareholders as the proposed combination creates S$9.4 billion of value, which is around 80% of Keppel’s market cap at the last close.


Keppel: A Massive Winner from Keppel O&M and Sembcorp Marine’s Combination

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yangzijiang-shipbuilding-holdings-limited" target="_blank" data-smartkarma-citation="entities:660:1" rel="noopener">Yangzijiang Shipbuilding (YZJSGD SP)</a> aims to spin off Yangzijiang Financial Holdings (YZJFH) through a dividend-in-specie of all the issued YZJFH shares to shareholders on a one-on-one basis.</li>
<li>YZJFH shares will be listed on the SGX-ST by way of an introduction. The EGM to approve the spin-off will be held on 18 April at 4 pm.</li>
<li>This transaction will unlock value. Our SoTP valuation is S$1.94 per share, which is a 22% upside to the last close price of S$1.59 per share.</li>
</ul>



Yangzijiang Shipbuilding (YZJSGD SP) aims to spin off Yangzijiang Financial Holdings (YZJFH) through a dividend-in-specie of all the issued YZJFH shares to shareholders on a one-on-one basis.
YZJFH shares will be listed on the SGX-ST by way of an introduction. The EGM to approve the spin-off will be held on 18 April at 4 pm.
This transaction will unlock value. Our SoTP valuation is S$1.94 per share, which is a 22% upside to the last close price of S$1.59 per share.


Yangzijiang: Proposed Spin-Off of YZJFH to Unlock Value

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE: Singapore Press Holdings, Afterpay, Link Admin, Razer, AusNet, 51job

Travis Lundy

When the <a href="https://www.smartkarma.com/entities/sembcorp-marine-ltd" target="_blank" data-smartkarma-citation="entities:11:1" rel="noopener">Sembcorp Marine (SMM SP)</a> Rights Offering which was backstopped by Temasek, traded near to terms, it became quasi-certain that Temasek would have to do an MGO on the back end - the so-called "Compliance Offer."There were advantages to sitting on the bid at S$0.08 and S$0.079, and perhaps even S$0.81/share, to take advantage of that because the skew of possibilities was heavily favored to the upside. Unfortunately, that upside has not materialised, despite stronger oil prices making offshore rigs more attractive and the possibly bad assets less bad. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/239/174/original/Screenshot+2021-11-02+at+1.24.35+PM.png?1635830735" class="editor-image img-responsive" data-smartkarma-image-id="239174"></figure></section>In the past four weeks, Sembcorp Marine shares have settled down at S$0.08/share or lower most of the time except for a brief excursion above the line. Last night, just before midnight, Temasek and investment unit Startree Investments Pte. <a href="https://links.sgx.com/FileOpen/MGO%20Unconditional%20Announcement.ashx?App=Announcement&amp;FileID=689132" target="_blank" rel="noopener">announced</a> that as of 6pm yesterday 1.249bn shares had been tendered. That gets Temasek over 50%.Normally, that would mean extension of the Mandatory Offer under Rule 22.6 of the Singapore Takeovers Code. This time, it does not, because of Rule 22.6 of the Singapore Takeovers Code. Yup. You read that right. The offer closes at 5:30pm 3 November 2021. That's tomorrow.

When the Sembcorp Marine (SMM SP) Rights Offering which was backstopped by Temasek, traded near to terms, it became quasi-certain that Temasek would have to do an MGO on the back end - the so-called "Compliance Offer."There were advantages to sitting on the bid at S$0.08 and S$0.079, and perhaps even S$0.81/share, to take advantage of that because the skew of possibilities was heavily favored to the upside. Unfortunately, that upside has not materialised, despite stronger oil prices making offshore rigs more attractive and the possibly bad assets less bad. In the past four weeks, Sembcorp Marine shares have settled down at S$0.08/share or lower most of the time except for a brief excursion above the line. Last night, just before midnight, Temasek and investment unit Startree Investments Pte. announced that as of 6pm yesterday 1.249bn shares had been tendered. That gets Temasek over 50%.Normally, that would mean extension of the Mandatory Offer under Rule 22.6 of the Singapore Takeovers Code. This time, it does not, because of Rule 22.6 of the Singapore Takeovers Code. Yup. You read that right. The offer closes at 5:30pm 3 November 2021. That's tomorrow. 

Sembcorp Marine MGO Goes Unconditional But No Extension. Deadline Is 3 Nov.

Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

Pan-Asia Equity Bottom-up

Equity Bottom-Up

<ul>
<li>Philippine airport service provider MacroAsia (MAC PM) is added to our list of Fallen Angels as the associated LT Group (LTG PM) company Philippine Airlines (PAL PM) declares ch.11 bankruptcy</li>
<li>Depressed valuations and strong balance sheets have led the Philippines to become an epicentre for buybacks</li>
<li>PlanB (PLANB TB) announced an acquisition of Master Ad’s (MACO TB) Thai billboard assets for Bt 639.5mn and includes a Bt1.5bn rights-issue and restructuring of the Bt700mn minimum revenue guarantee</li>
</ul>


Philippine airport service provider MacroAsia (MAC PM) is added to our list of Fallen Angels as the associated LT Group (LTG PM) company Philippine Airlines (PAL PM) declares ch.11 bankruptcy
Depressed valuations and strong balance sheets have led the Philippines to become an epicentre for buybacks
PlanB (PLANB TB) announced an acquisition of Master Ad’s (MACO TB) Thai billboard assets for Bt 639.5mn and includes a Bt1.5bn rights-issue and restructuring of the Bt700mn minimum revenue guarantee


Wickhams Hill Research | Under-The-Radar Issue 8

Singapore

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

Frencken Group Limited designs, develops, and produces complex and advanced modules and systems, based on precision mechanics, hardware and software.

Hong Leong Asia Limited manufactures and fabricates precast concrete products, trades and distributes steel and cement products,  The Company also manufactures and distributes refrigerators and freezers, assembles air-conditioners and diesel engines as well as manufactures and sells metal drums and containers, plastic packaging related products, and container components.

China Yuchai International Limited is a holding company.  Through its subsidiary, Guangxi Yuchai Machinery Company Limited (Yuchai), manufactures, assembles, and sells diesel engines in China.

China Yuchai International Limited (CYD US)

COSCO SHIPPING International (Singapore) Co., Ltd. provides ship building and repairing and marine engineering services. The Company offers bulk, liquefied natural gas, and special purpose carriers, as well as oil tankers. COSCO SHIPPING International serves customers worldwide.

COSCO SHIPPING International (Singapore) (COS SP)

InnoTek Ltd., through its subsidiaries, manufactures metal components.  The Company offers metal stamping, commercial tool and die fabrications, sub-assembly work and frame manufacturing.  InnoTek primarily serves customers in Japan and Europe.

World Precision Machinery Limited manufactures and supplies stamping machines and related metal components. The Company's other products include bending, cutting and CNC punching machines.

Sembcorp Industries Ltd provides utilities and integrated services for industrial sites such as power, gas, steam, water, wastewater treatment and other on-site services. The Company's businesses also include marine & offshore engineering and urban development comprising industrial parks and business, commercial and residential spaces.

Fu Yu Corporation Limited manufactures and sells precision plastic injection molds and plastic components.  The Company also manufactures and sells plastic, aluminum parts, electronic products, and equipment for medical use.

Grand Banks Yachts Limited, through its subsidiaries, builds and sells diesel-powered cruisers, and purchases and sells new and used yachts and boats. The Company also provides yacht repair and maintenance services, promotional and technical services, and manufactures and sells fiberglass yachts.

Terex Corporation is a diversified global manufacturer operating in four business segments: aerial work platforms; construction; cranes; and materials processing.  Terex manufactures a broad range of equipment for use in various industries including the construction, infrastructure, quarrying, mining, shipping, transportation, refining, energy and utility industries.

Avic Heavy Machinery Co., Ltd. develops, manufactures, and markets hydraulic pumps and motors, Rzeppa constant velocity joints, and other  related products.

EnPro Industries, Inc. designs, develops, manufactures, and markets proprietary engineered industrial products.  The Company's products include sealing products, metal polymer bearing products, air compressor systems and vacuum pumps, diesel and natural gas engines, and specialized tooling.  EnPro sells its products to customers located around the world.

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

Timken India Limited provides friction management solutions for a wide range of industry applications across the globe; from agriculture to construction, from heavy industrial applications to automobiles and from rail to related products. Timken provides a complete package solution for bearings and roll-shop maintenance.

Tian Di Science & Technology Co., Ltd. develops and manufactures mining automation control systems, mining machines, coal preparation equipment, and materials and equipment used for underground engineering. The Company also provides technical services and undertakes underground special construction projects.

Tian Di Science & Technology Co., (600582 CH)

HOSHIZAKI ELECTRIC CORPORATION manufactures and sells commercial use kitchen equipment such as freezers, refrigerators, food/beverage dispensers.  The Company has sales subsidiaries across Japan as well as overseas.

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

Sainty Marine Corp Ltd is a ship builder, designer, ship trader and heavy cargo ocean transporter.  The Company is based in Nanjing, China. Sainty Marine is also involved in financing support and technical services.

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

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Seatrium (STM SP)

Keppel: A Massive Winner from Keppel O&M and Sembcorp Marine’s Combination

The agreed equity value exchange ratio between Keppel O&M and Sembcorp Marine is 56%:44%. The transaction is a big win for Keppel shareholders as...

Arun George

Yangzijiang: Proposed Spin-Off of YZJFH to Unlock Value

The EGM to approve the spin-off of YZJFH will be held on 18 April at 4 pm. This transaction will unlock value. Our SoTP valuation is S$1.94 per...

Arun George

Last Week in Event SPACE: Singapore Press Holdings, Afterpay, Link Admin, Razer, AusNet, 51job

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

Sembcorp Marine MGO Goes Unconditional But No Extension. Deadline Is 3 Nov.

Usually when a Singapore MGO is declared UNCONDITIONAL it gets extended. Not this time. There is a carveout in the rules and Temasek warned of it....

Travis Lundy

Wickhams Hill Research | Under-The-Radar Issue 8

Philippine airport service provider MacroAsia (MAC PM) is added to our list of Fallen Angels as the associated LT Group (LTG PM)...

Lloyd Moffatt

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