Category

Industrials

Mar 17
0

Daily Brief Industrials: Berli Jucker, ZKH Group, AviChina Industry & Technology H, Green Li-ion Pte Ltd, AEye and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story
  • ZKH IPO: Neither Good nor Bad
  • AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
  • Battery Recycling Startup Green Li-Ion Secures US$20.5M Pre-Series B Funding
  • New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story

By Angus Mackintosh

  • Berli Jucker (BJC TB) released a strong set of 4Q2022 numbers reflecting the benefit of increasing tourism numbers in Thailand significantly positively impacting 25 of its stores. 
  • The company strategically reduced its B2B business, whilst growing its Don Chai stores quite aggressively. Berli Jucker plans to increase its store numbers further in 2023.
  • Berli Jucker‘s packaging supply chain business will see new aluminium can capacity this year in Thailand and should see a 2H2023 growth pick-up. Overall a more positive outlook for 2023.

ZKH IPO: Neither Good nor Bad

By Shifara Samsudeen, ACMA, CGMA

  • ZKH Group (ZKH US) is a leading MRO procurement service platform in China offering digital and fulfilment solutions for participants in the industry value chain.
  • The company has filed for an IPO to list its shares in the US and plans to raise about US$200-300m through the IPO.
  • Having analyzed the limited information available, we are indifferent on ZKH’s operating performance and would only recommend if shares are priced attractively

AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction

By Osbert Tang, CFA

  • The slight dip in FY22 earnings for AviChina Industry & Technology H (2357 HK) is due to product restructuring at Avicopter (600038 CH) and higher impairment/fair value losses.
  • It should return to growth track in the next two years, with rise in product demand, recovery in Avicopter, further restructuring and M&As being major drivers. 
  • Share price has increased 15.9% YTD but it is just on 9.2x FY23 PER. Its market cap is at 58.5% discount to holdings in its four listed A-share subsidiaries. 

Battery Recycling Startup Green Li-Ion Secures US$20.5M Pre-Series B Funding

By e27

  • Green Li-ion, a lithium-ion battery recycling technology company based in Singapore, has raised US$20.5 million in pre-Series B funding.
  • Green Li-ion has developed a novel technology that processes 100 per cent of all used lithium batteries.
  • It recycles and reuses all metals to directly re-manufacture battery-grade cathode material ready for reuse in new batteries.

New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

By Water Tower Research

  • CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.
  • CFO Bob Brown announced that he is leaving the company effective March 31.
  • Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”

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Mar 17
0

Daily Brief Industrials: Berli Jucker, ZKH Group, AviChina Industry & Technology H, Green Li-ion Pte Ltd, AEye and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story
  • ZKH IPO: Neither Good nor Bad
  • AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction
  • Battery Recycling Startup Green Li-Ion Secures US$20.5M Pre-Series B Funding
  • New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

Berli Jucker (BJC TB) – A Retail and Packaging Fuelled Growth Story

By Angus Mackintosh

  • Berli Jucker (BJC TB) released a strong set of 4Q2022 numbers reflecting the benefit of increasing tourism numbers in Thailand significantly positively impacting 25 of its stores. 
  • The company strategically reduced its B2B business, whilst growing its Don Chai stores quite aggressively. Berli Jucker plans to increase its store numbers further in 2023.
  • Berli Jucker‘s packaging supply chain business will see new aluminium can capacity this year in Thailand and should see a 2H2023 growth pick-up. Overall a more positive outlook for 2023.

ZKH IPO: Neither Good nor Bad

By Shifara Samsudeen, ACMA, CGMA

  • ZKH Group (ZKH US) is a leading MRO procurement service platform in China offering digital and fulfilment solutions for participants in the industry value chain.
  • The company has filed for an IPO to list its shares in the US and plans to raise about US$200-300m through the IPO.
  • Having analyzed the limited information available, we are indifferent on ZKH’s operating performance and would only recommend if shares are priced attractively

AviChina Industry (2357 HK): Still Well-Placed as Our High Conviction

By Osbert Tang, CFA

  • The slight dip in FY22 earnings for AviChina Industry & Technology H (2357 HK) is due to product restructuring at Avicopter (600038 CH) and higher impairment/fair value losses.
  • It should return to growth track in the next two years, with rise in product demand, recovery in Avicopter, further restructuring and M&As being major drivers. 
  • Share price has increased 15.9% YTD but it is just on 9.2x FY23 PER. Its market cap is at 58.5% discount to holdings in its four listed A-share subsidiaries. 

Battery Recycling Startup Green Li-Ion Secures US$20.5M Pre-Series B Funding

By e27

  • Green Li-ion, a lithium-ion battery recycling technology company based in Singapore, has raised US$20.5 million in pre-Series B funding.
  • Green Li-ion has developed a novel technology that processes 100 per cent of all used lithium batteries.
  • It recycles and reuses all metals to directly re-manufacture battery-grade cathode material ready for reuse in new batteries.

New CEO Looking to Leverage Continental and Other Partners for 4Sight Rollouts

By Water Tower Research

  • CEO Matt Fisch’s first earnings call announced revenue of $1.1 million in 4Q22, in line with quarterly expectations.
  • CFO Bob Brown announced that he is leaving the company effective March 31.
  • Fisch said the company is “in the process of developing a strategic plan and timeline that builds on [our] significant achievements made to date.”

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Mar 16
0

Daily Brief Industrials: Toshiba Corp, LG Corp, MonotaRO Co Ltd, Volkswagen (Pref), Tata Technologies, Rockwell Automation, Ww Grainger Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,
  • An Increasing Probability of LG Corp Preferred Shares Cancellation
  • MonotaRo: Hasn’t Been This Cheap For Quite a Long Time
  • Liquid Universe of European Ordinary and Preferred Shares: March ‘23 Report
  • Tata Technologies Pre-IPO Tearsheet
  • Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations
  • W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers

Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,

By Travis Lundy

  • Bloomberg has an article today after the close saying Toshiba Corp (6502 JP)‘s board will meet tomorrow to discuss the JIP bid, and the Special Committee will give its recommendations. 
  • The article suggests the Board may proceed with a vote. If they do, an announced bid could come as early as the afternoon.
  • The world is quite volatile now, and funding is probably more precious today than yesterday. But a bid is too. All in all, I see no reason for a position. 

An Increasing Probability of LG Corp Preferred Shares Cancellation

By Douglas Kim

  • In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.
  • We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp’s share price. 
  • We believe a 5-10% buyback and cancellation of LG Corp’s preferred shares in the next 1-2 years is a higher probability.

MonotaRo: Hasn’t Been This Cheap For Quite a Long Time

By Oshadhi Kumarasiri

  • After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRO Co Ltd (3064 JP)’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.
  • We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.
  • Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.

Liquid Universe of European Ordinary and Preferred Shares: March ‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-February, spreads have generally tightened across our liquid universe (9 have widened, 10 tightened, 0 at same level).
  • Trade preferences long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
  • Trade preferences long preferred / short ordinary shares: Sixt, VW, Danieli, MFE-Media for Europe, Grifols, Atlas Copco, Ericsson.

Tata Technologies Pre-IPO Tearsheet

By Ethan Aw

  • Tata Technologies (TATATECH IN) is looking to raise about US$600m in its upcoming India IPO. The deal will be run by Bank of America, Citigroup and JM Financial.  
  • Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers. 
  • It has deep domain expertise in the automotive industry and serves clients in adjacent industries, such as aerospace, transportation and construction heavy machinery (TCHM), according to the company. 

Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations

By Baptista Research

  • This is our first report on Rockwell Automation, a major provider of digital transformation and industrial automation solutions across the globe.
  • Rockwell Automation produced an all-around beat in its last result as organic sales and earnings both exceeded market expectations and increased year over year.
  • In a very dynamic supply chain environment, organic sales were 10% higher than they had been the previous year.

W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on W.W.
  • Grainger, Inc., a global distributor of MRO materials and other related products and services.
  • The company delivered an all-around beat for the final quarter of 2022 with a sales growth was 13.2% or 17.2% on a daily constant currency basis and solid growth in both segments.

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Mar 16
0

Daily Brief Industrials: Toshiba Corp, LG Corp, MonotaRO Co Ltd, Volkswagen (Pref), Tata Technologies, Rockwell Automation, Ww Grainger Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,
  • An Increasing Probability of LG Corp Preferred Shares Cancellation
  • MonotaRo: Hasn’t Been This Cheap For Quite a Long Time
  • Liquid Universe of European Ordinary and Preferred Shares: March ‘23 Report
  • Tata Technologies Pre-IPO Tearsheet
  • Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations
  • W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers

Toshiba (6502) – Funding Possibly Re-Secured, Deal Possibly In Play,

By Travis Lundy

  • Bloomberg has an article today after the close saying Toshiba Corp (6502 JP)‘s board will meet tomorrow to discuss the JIP bid, and the Special Committee will give its recommendations. 
  • The article suggests the Board may proceed with a vote. If they do, an announced bid could come as early as the afternoon.
  • The world is quite volatile now, and funding is probably more precious today than yesterday. But a bid is too. All in all, I see no reason for a position. 

An Increasing Probability of LG Corp Preferred Shares Cancellation

By Douglas Kim

  • In this insight, we discuss an increasing probability of the cancellation of LG Corp preferred shares.
  • We provide five major reasons as to why LG Corp should cancel its entire preferred shares and how this could have a positive impact on LG Corp’s share price. 
  • We believe a 5-10% buyback and cancellation of LG Corp’s preferred shares in the next 1-2 years is a higher probability.

MonotaRo: Hasn’t Been This Cheap For Quite a Long Time

By Oshadhi Kumarasiri

  • After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRO Co Ltd (3064 JP)’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.
  • We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.
  • Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.

Liquid Universe of European Ordinary and Preferred Shares: March ‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-February, spreads have generally tightened across our liquid universe (9 have widened, 10 tightened, 0 at same level).
  • Trade preferences long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
  • Trade preferences long preferred / short ordinary shares: Sixt, VW, Danieli, MFE-Media for Europe, Grifols, Atlas Copco, Ericsson.

Tata Technologies Pre-IPO Tearsheet

By Ethan Aw

  • Tata Technologies (TATATECH IN) is looking to raise about US$600m in its upcoming India IPO. The deal will be run by Bank of America, Citigroup and JM Financial.  
  • Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers. 
  • It has deep domain expertise in the automotive industry and serves clients in adjacent industries, such as aerospace, transportation and construction heavy machinery (TCHM), according to the company. 

Rockwell Automation Inc.: Initiation of Coverage – Logix & Other Innovations

By Baptista Research

  • This is our first report on Rockwell Automation, a major provider of digital transformation and industrial automation solutions across the globe.
  • Rockwell Automation produced an all-around beat in its last result as organic sales and earnings both exceeded market expectations and increased year over year.
  • In a very dynamic supply chain environment, organic sales were 10% higher than they had been the previous year.

W.W. Grainger Inc.: Initiation of Coverage – Business Strategy & Key Drivers

By Baptista Research

  • This is our first report on W.W.
  • Grainger, Inc., a global distributor of MRO materials and other related products and services.
  • The company delivered an all-around beat for the final quarter of 2022 with a sales growth was 13.2% or 17.2% on a daily constant currency basis and solid growth in both segments.

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Mar 15
0

Daily Brief Industrials: ZKH Group, Snowman Logistics, DSV A/S, Lasertec Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • ZKH Group Pre-IPO – If Only Its Growth Was Sustainable
  • Snowman Logistics- Forensic Analysis
  • DSV: Long-Term Structural Winner
  • Lasertec (6920 JP): Negative Potential of Sculpta Not in the Price

ZKH Group Pre-IPO – If Only Its Growth Was Sustainable

By Ethan Aw

  • ZKH Group (ZKH US) is looking to raise about US$300m in its upcoming US IPO.  
  • ZKH Group is a leading maintenance repair and operations (MRO) procurement service platform in China, according to CIC, providing one-stop MRO procurement and management services and digital and fulfillment solutions.
  • ZKH Group’s revenue has been primarily driven by its product sales segment during the track record period. However, its GMV growth slowed dramatically and its sales growth doesn’t appear sustainable. 

Snowman Logistics- Forensic Analysis

By Nitin Mangal

  • Snowman Logistics (SNLL IN)  is principally engaged in the business of providing integrated cold chain solution to users in India.
  • The company is in capex phase as it looks to increase the pallet capacity. 
  • Forensic concerns include inability to deliver cash flows after the last capex cycle, alongside governance issues such as directorial pay, churn in board, etc.

DSV: Long-Term Structural Winner

By Alexis Dwek

  • DSV is a global leading logistics provider with a strong track record of both organic and inorganic growth
  • With its asset-light model, DSV delivers industry-leading margins. Best in class management
  • Potential for more acquisitions. Market consolidator. Long-term structural winner. Buy and hold 

Lasertec (6920 JP): Negative Potential of Sculpta Not in the Price

By Scott Foster

  • Applied Materials’ new Sculpta pattern-shaping tool could greatly reduce demand for EUV mask inspection on a medium- to long-term view. High-NA EUV is likely to do the same.
  • Lasertec’s high valuations are predicated on a multi-year high growth trajectory. That trajectory is now being called into question. 
  • We have cut our FY Jun-25 profit forecast by 32%, but the projected P/E ratio is still 40x. More downside ahead.

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Mar 15
0

Daily Brief Industrials: ZKH Group, Snowman Logistics, DSV A/S, Lasertec Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • ZKH Group Pre-IPO – If Only Its Growth Was Sustainable
  • Snowman Logistics- Forensic Analysis
  • DSV: Long-Term Structural Winner
  • Lasertec (6920 JP): Negative Potential of Sculpta Not in the Price

ZKH Group Pre-IPO – If Only Its Growth Was Sustainable

By Ethan Aw

  • ZKH Group (ZKH US) is looking to raise about US$300m in its upcoming US IPO.  
  • ZKH Group is a leading maintenance repair and operations (MRO) procurement service platform in China, according to CIC, providing one-stop MRO procurement and management services and digital and fulfillment solutions.
  • ZKH Group’s revenue has been primarily driven by its product sales segment during the track record period. However, its GMV growth slowed dramatically and its sales growth doesn’t appear sustainable. 

Snowman Logistics- Forensic Analysis

By Nitin Mangal

  • Snowman Logistics (SNLL IN)  is principally engaged in the business of providing integrated cold chain solution to users in India.
  • The company is in capex phase as it looks to increase the pallet capacity. 
  • Forensic concerns include inability to deliver cash flows after the last capex cycle, alongside governance issues such as directorial pay, churn in board, etc.

DSV: Long-Term Structural Winner

By Alexis Dwek

  • DSV is a global leading logistics provider with a strong track record of both organic and inorganic growth
  • With its asset-light model, DSV delivers industry-leading margins. Best in class management
  • Potential for more acquisitions. Market consolidator. Long-term structural winner. Buy and hold 

Lasertec (6920 JP): Negative Potential of Sculpta Not in the Price

By Scott Foster

  • Applied Materials’ new Sculpta pattern-shaping tool could greatly reduce demand for EUV mask inspection on a medium- to long-term view. High-NA EUV is likely to do the same.
  • Lasertec’s high valuations are predicated on a multi-year high growth trajectory. That trajectory is now being called into question. 
  • We have cut our FY Jun-25 profit forecast by 32%, but the projected P/E ratio is still 40x. More downside ahead.

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Mar 14
0

Daily Brief Industrials: Halcyon Agri, ZTO Express, LX International, SK Networks, JD Logistics, ZKH Group, Hanwha Aerospace, MonotaRO Co Ltd, Parker Hannifin and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept
  • China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com
  • Shorting Event on LX International’s Potential Rights Offer for HMM Takeover
  • SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation
  • JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy
  • ZKH Group IPO: The Bull Case
  • MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility
  • Monotaro (3064) | Pricing in Downside Risks
  • Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers

Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept

By David Blennerhassett

  • Halcyon Agri (HACL SP) has issued the circular in response to China Hainan Rubber Industry (601118 CH)‘s conditional MGO.
  • The IFA reckons the Offer is fair and reasonable. The Independent Directors recommend that shareholders accept the Offer.
  • The first close is the 24 March. Hainan Rubber is under no obligation to extend the Offer beyond this date. 

China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com

By Ming Lu

  • Grizzly Research LLC publishes a short selling report on ZTO.
  • Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
  • Dada, which was acquired by JD.com last year, posts good 4Q22 results.

Shorting Event on LX International’s Potential Rights Offer for HMM Takeover

By Sanghyun Park

  • The opinion rapidly spreading in the local market is that LX International is increasing its available shares by twice the amount to plan a paid-in increase for the HMM acquisition.
  • The size of an offering is estimated at ₩1.2T to ₩1.5T. The short-term price impact will undoubtedly be significant for LX International having a market cap of ₩1.2T.
  • The market has already witnessed a preemptive position buildup targeting this. However, since there is a time gap until the offering announcement, an entry point opportunity may still be available.

SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation

By Douglas Kim

  • SK Networks announced that it will repurchase 100 billion won in common shares and also cancel nearly 70 billion won of existing treasury shares.
  • The combined share buyback and treasury shares cancellation will represent nearly 14% of the company’s total outstanding shares.  
  • The combined share buyback and treasury shares cancellation which will represent nearly 14% of the company’s total outstanding shares, will likely have a positive impact on SK Network’s share price.

JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy

By Ming Lu

  • Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
  • We believe total revenue will grow by 26% in 2023 and 17% in 2024.
  • We also believe the stock has an upside of 58% and a price target of HK$20.

ZKH Group IPO: The Bull Case

By Arun George

  • ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
  • The ZKH platform is for enterprise customers and the GBB platform is for micro businesses. Key backers include Tencent (700 HK) and Tiger Global.
  • The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a strong balance sheet.

MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility

By Douglas Kim

  • In this insight, we discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement in May 2023 amid heightened market volatility.
  • The potential inclusions (high probability) in the MSCI Korea index in May are Hanwha Aerospace and Ecopro. Potential adds (low probability) include POSCO International, Cosmo AM&T, and SM Entertainment.
  • The three most likely exclusions in the MSCI Korea index in May include Lotte Shopping, SD Biosensor, and S1 Corporation.

Monotaro (3064) | Pricing in Downside Risks

By Mark Chadwick

  • We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
  • Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
  • Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%

Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers

By Baptista Research

  • This is our first report on Parker-Hannifin Corporation, a global leader in motion and control technologies.
  • Parker-Hannifin delivered strong operating performance throughout the second quarter of the current fiscal and delivered an all-around beat.
  • We initiate coverage on the stock of Parker-Hannifin Corporation with a ‘Hold’ rating.

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Mar 14
0

Daily Brief Industrials: Halcyon Agri, ZTO Express, LX International, SK Networks, JD Logistics, ZKH Group, Hanwha Aerospace, MonotaRO Co Ltd, Parker Hannifin and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept
  • China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com
  • Shorting Event on LX International’s Potential Rights Offer for HMM Takeover
  • SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation
  • JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy
  • ZKH Group IPO: The Bull Case
  • MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility
  • Monotaro (3064) | Pricing in Downside Risks
  • Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers

Halcyon Agri’s Offer: IFA Says Fair. Independent Directors Say Accept

By David Blennerhassett

  • Halcyon Agri (HACL SP) has issued the circular in response to China Hainan Rubber Industry (601118 CH)‘s conditional MGO.
  • The IFA reckons the Offer is fair and reasonable. The Independent Directors recommend that shareholders accept the Offer.
  • The first close is the 24 March. Hainan Rubber is under no obligation to extend the Offer beyond this date. 

China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com

By Ming Lu

  • Grizzly Research LLC publishes a short selling report on ZTO.
  • Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
  • Dada, which was acquired by JD.com last year, posts good 4Q22 results.

Shorting Event on LX International’s Potential Rights Offer for HMM Takeover

By Sanghyun Park

  • The opinion rapidly spreading in the local market is that LX International is increasing its available shares by twice the amount to plan a paid-in increase for the HMM acquisition.
  • The size of an offering is estimated at ₩1.2T to ₩1.5T. The short-term price impact will undoubtedly be significant for LX International having a market cap of ₩1.2T.
  • The market has already witnessed a preemptive position buildup targeting this. However, since there is a time gap until the offering announcement, an entry point opportunity may still be available.

SK Networks: 100 Billion Won in Share Buyback + 70 Billion Won in Treasury Shares Cancellation

By Douglas Kim

  • SK Networks announced that it will repurchase 100 billion won in common shares and also cancel nearly 70 billion won of existing treasury shares.
  • The combined share buyback and treasury shares cancellation will represent nearly 14% of the company’s total outstanding shares.  
  • The combined share buyback and treasury shares cancellation which will represent nearly 14% of the company’s total outstanding shares, will likely have a positive impact on SK Network’s share price.

JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy

By Ming Lu

  • Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
  • We believe total revenue will grow by 26% in 2023 and 17% in 2024.
  • We also believe the stock has an upside of 58% and a price target of HK$20.

ZKH Group IPO: The Bull Case

By Arun George

  • ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
  • The ZKH platform is for enterprise customers and the GBB platform is for micro businesses. Key backers include Tencent (700 HK) and Tiger Global.
  • The key elements of the bull case rest on large addressable markets, solid customer loyalty, improving gross margin, lower operating losses and a strong balance sheet.

MSCI Korea Potential Adds & Deletes in May 2023 Amid Heightened Market Volatility

By Douglas Kim

  • In this insight, we discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement in May 2023 amid heightened market volatility.
  • The potential inclusions (high probability) in the MSCI Korea index in May are Hanwha Aerospace and Ecopro. Potential adds (low probability) include POSCO International, Cosmo AM&T, and SM Entertainment.
  • The three most likely exclusions in the MSCI Korea index in May include Lotte Shopping, SD Biosensor, and S1 Corporation.

Monotaro (3064) | Pricing in Downside Risks

By Mark Chadwick

  • We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
  • Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
  • Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%

Parker-Hannifin Corporation: Initiation of Coverage – The Meggitt Synergies & Other Drivers

By Baptista Research

  • This is our first report on Parker-Hannifin Corporation, a global leader in motion and control technologies.
  • Parker-Hannifin delivered strong operating performance throughout the second quarter of the current fiscal and delivered an all-around beat.
  • We initiate coverage on the stock of Parker-Hannifin Corporation with a ‘Hold’ rating.

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Mar 13
0

Daily Brief Industrials: Halcyon Agri, Alta Equipment Group Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Halcyon Agri (HACL SP): Board Recommends Conditional MGO
  • Heavy Lifting

Halcyon Agri (HACL SP): Board Recommends Conditional MGO

By Arun George

  • The IFA opines that China Hainan Rubber Industry (601118 CH)‘s MGO at S$0.413 per share is fair and reasonable. The Halcyon Agri (HACL SP) Board recommends accepting the offer.
  • Since the offer opened on 24 February, there have been no acceptances. Perhaps minorities held off until the full-year results and the IFA report. Board recommendation should drive acceptance.
  • The 50%+ minimum acceptance condition requires around 40% of minorities acceptance rate (47% excluding the Gondobintoro Family). This remains achievable. At the last close, the gross spread is 2.0%.

Heavy Lifting

By subSPAC

  • The heavy equipment dealership industry, known for its lucrative opportunities, has consolidated significantly in recent years, with major players acquiring smaller dealerships.
  • Alta Equipment, based in Michigan, has emerged as a beneficiary of this trend, expanding its geographic reach and gaining access to trained technicians, giving it a competitive advantage over smaller players.
  • However, as the industry continues to consolidate, will Alta be able to maintain its momentum, or will it face challenges from larger rivals?

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Mar 13
0

Daily Brief Industrials: Halcyon Agri, Alta Equipment Group Inc and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Halcyon Agri (HACL SP): Board Recommends Conditional MGO
  • Heavy Lifting

Halcyon Agri (HACL SP): Board Recommends Conditional MGO

By Arun George

  • The IFA opines that China Hainan Rubber Industry (601118 CH)‘s MGO at S$0.413 per share is fair and reasonable. The Halcyon Agri (HACL SP) Board recommends accepting the offer.
  • Since the offer opened on 24 February, there have been no acceptances. Perhaps minorities held off until the full-year results and the IFA report. Board recommendation should drive acceptance.
  • The 50%+ minimum acceptance condition requires around 40% of minorities acceptance rate (47% excluding the Gondobintoro Family). This remains achievable. At the last close, the gross spread is 2.0%.

Heavy Lifting

By subSPAC

  • The heavy equipment dealership industry, known for its lucrative opportunities, has consolidated significantly in recent years, with major players acquiring smaller dealerships.
  • Alta Equipment, based in Michigan, has emerged as a beneficiary of this trend, expanding its geographic reach and gaining access to trained technicians, giving it a competitive advantage over smaller players.
  • However, as the industry continues to consolidate, will Alta be able to maintain its momentum, or will it face challenges from larger rivals?

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free