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

Hollysys Automation Technologies / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a> shareholders vote on Ascendent’s US$26.50 offer on 8 February. The special meeting will not be held as the 30% shareholding threshold is no longer satisfied.</li>
<li>The proxy statement shows that despite Dazheng Consoritum’s competing public campaign, it has withdrawn its court injunction and has struggled to provide proof of financing.</li>
<li>The proxy statement suggests that the special committee ran a fair process. While shareholders should approve Ascendent's offer, the 0.2% gross spread indicates an unfavourable risk/reward profile.</li>
</ul>



Hollysys Automation Technologies (HOLI US) shareholders vote on Ascendent’s US$26.50 offer on 8 February. The special meeting will not be held as the 30% shareholding threshold is no longer satisfied.
The proxy statement shows that despite Dazheng Consoritum’s competing public campaign, it has withdrawn its court injunction and has struggled to provide proof of financing.
The proxy statement suggests that the special committee ran a fair process. While shareholders should approve Ascendent's offer, the 0.2% gross spread indicates an unfavourable risk/reward profile.


Hollysys (HOLI US): Vote on 8 February as Hopes of a Rival Offer Fade

Independent Insight Provider, Japanese equities, LightStream Research

Scott Foster

Independent Insight Provider, Japanese equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Yokogawa is diversifying with integrated controls systems for green hydrogen plants in the Netherlands and Australia and a carbon neutral industrial park in Japan.</li>
<li>Holland Hydrogen I, the YURI hydrogen project and the Goi and Soga Complex take the company beyond oil, gas and petrochemicals.</li>
<li>Based on long-term energy and environmental priorities, these projects should be immune to recession.</li>
</ul>


Yokogawa is diversifying with integrated controls systems for green hydrogen plants in the Netherlands and Australia and a carbon neutral industrial park in Japan.
Holland Hydrogen I, the YURI hydrogen project and the Goi and Soga Complex take the company beyond oil, gas and petrochemicals.
Based on long-term energy and environmental priorities, these projects should be immune to recession.


Yokogawa Electric (6841 JP): Carbon-Neutral Industrial Park & Green Hydrogen

<ul>
<li>Strong 1H orders and the second upward revision to guidance this fiscal year have lifted the share price to a new high.</li>
<li>The energy shortage and high energy prices should continue to drive demand for Yokogawa's oil, gas and power related industrial control equipment. Demand from other users is also rising.</li>
<li>Valuations suggest 15% to 20% additional upside potential for the share price. Recession or a strengthening of the yen could put this at risk, so watch the order flow.</li>
</ul>


Strong 1H orders and the second upward revision to guidance this fiscal year have lifted the share price to a new high.
The energy shortage and high energy prices should continue to drive demand for Yokogawa's oil, gas and power related industrial control equipment. Demand from other users is also rising.
Valuations suggest 15% to 20% additional upside potential for the share price. Recession or a strengthening of the yen could put this at risk, so watch the order flow.


Yokogawa Electric (6841 JP): High Energy Prices Point to Further Upside

With oil prices above ¥70/bbl, economies recovering from the pandemic, and Yokogawa Electric down 38% from its 52-week high, it seems like a good time to have another look at Japan's world-class supplier of control equipment for the oil &amp; gas, petrochemical and other industries.Profits are likely to be weak again in FY Mar-22 but after years of under-investment in its main user industries, the stage is set for a rebound at Yokogawa. New orders began to pick up two quarters ago and should continue to rise this year and next.On a three-year view, we expect the company's sales and operating profit to regain their previous peaks, creating potential upside for the share price of more than 40%.We also recommend have another look at  <a href="https://www.smartkarma.com/insights/chiyoda-qatar-comes-through" target="_blank" data-smartkarma-citation="insights:47962" rel="noopener">Chiyoda – Qatar Comes Through</a> by Mio Kato for an insight into Chiyoda Corp., one of world's top EPC (Engineering, Procurement &amp; Construction) service providers to the LNG and petroleum industries.

With oil prices above ¥70/bbl, economies recovering from the pandemic, and Yokogawa Electric down 38% from its 52-week high, it seems like a good time to have another look at Japan's world-class supplier of control equipment for the oil &amp; gas, petrochemical and other industries.Profits are likely to be weak again in FY Mar-22 but after years of under-investment in its main user industries, the stage is set for a rebound at Yokogawa. New orders began to pick up two quarters ago and should continue to rise this year and next.On a three-year view, we expect the company's sales and operating profit to regain their previous peaks, creating potential upside for the share price of more than 40%.We also recommend have another look at  Chiyoda – Qatar Comes Through by Mio Kato for an insight into Chiyoda Corp., one of world's top EPC (Engineering, Procurement &amp; Construction) service providers to the LNG and petroleum industries.

Yokogawa Electric 6841 JP): Weak Share Price & Rebounding Oil Prices Create Opportunity

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Softbank stock ended up locked limit up towards the end of the trading day after the company announced a massive ¥4.5trn in asset sales/monetisation together with a ¥2.0trn share buyback on top of the already announced ¥0.5trn buyback. Together the two buybacks could soak up 45% of outstanding shares. Given that the stock had fallen 53% between the 12th of February and last Thursday, the 19th of March, it is not surprising that it went limit up. It would not be entirely surprising if the stock were limit up again tomorrow. If so, that could have some interesting implications for other Nikkei names. Details below.

Softbank stock ended up locked limit up towards the end of the trading day after the company announced a massive ¥4.5trn in asset sales/monetisation together with a ¥2.0trn share buyback on top of the already announced ¥0.5trn buyback. Together the two buybacks could soak up 45% of outstanding shares. Given that the stock had fallen 53% between the 12th of February and last Thursday, the 19th of March, it is not surprising that it went limit up. It would not be entirely surprising if the stock were limit up again tomorrow. If so, that could have some interesting implications for other Nikkei names. Details below.

What Do You Buy if the Softbank Mega-Buyback Drives a Nikkei Squeeze?

Japan

YOKOGAWA ELECTRIC CORPORATION develops, manufactures, and markets information technology (IT) solutions, measuring and control equipment, semiconductors, and electronic components.  The Company's products include IT controllers, flowmeters, pressure transmitters, analyzers, data recorder, switching power supplies, and AC (alternating current) adaptors.

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Yokogawa Electric (6841 JP)

Hollysys (HOLI US): Vote on 8 February as Hopes of a Rival Offer Fade

The vote should get up due to shareholder fatigue, Dazheng’s foot-dragging, a withdrawn injunction and no special meeting. With shares trading...

Arun George