Industrials

Apparently, China Communications Construction (1800 HK) has an uninspiring 3Q22, but this is mainly due to losses at concession projects and heavy credit and asset impairments.
We estimate outstanding backlog at Rmb3.28trn, enough to cover 4.5x FY22F revenue. Expansion in 3Q22 gross margin, against declines in 1Q22 and 2Q22, is a positive development.
Despite outperformance against major indexes YTD, CCCC still trades on 2.3x and 2.1x PERs for FY22-23. Its 0.16x P/B has overly discounted the value of underlying assets.

Hub Group, Inc. (HUBG): Sell Short

By Eric Fernandez, CFA

The company is overearning due to an unusual confluence of events that increased demand for and limited supply of transportation, especially intermodal, services.
HUB’s sales and margins surged on a 40%+ intermodal pricing increase. EBITDA margins increased 400bps
Import volumes and port congestion are falling. Pricing is easing. Transportation could end up in a glut quickly. The weakening macro picture could take additional pressure off transportation demand.

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Nov 03

Daily Brief Industrials: Taiwan Glass Industry, Mitsubishi Heavy Industries and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!
MHI (7011) | The Time to Act on Energy Transition

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!

By Janaghan Jeyakumar, CFA

In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
The estimated one-way flow was ~US$2bn and I discussed my flow expectations for this event in FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: New Methodology! Massive Flow Implications!
With less than three weeks remaining to the base date, below is an updated look at my latest flow expectations for this event.

MHI (7011) | The Time to Act on Energy Transition

It is just 3 days 7 hours 52 minutes before the private jets start touching down at Sharm El-Sheikh International Airport for COP27
Expect a lot of jawboning on energy transition and decarbonization – music to the ears of MHI shareholders
MHI excels at Energy Transition as carbon intensive industries such as power generation and steelmaking shift to decarbonize

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Nov 03

Daily Brief Industrials: Taiwan Glass Industry, Mitsubishi Heavy Industries and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!
MHI (7011) | The Time to Act on Energy Transition

FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: Good Start, Some Surprises, More to Come!

By Janaghan Jeyakumar, CFA

In October 2022, FTSE Russell confirmed that the number of constituents in the FTSE TWSE Taiwan Dividend+ Index will be increased from 30 to 50 during the December 2022 Rebalance.
The estimated one-way flow was ~US$2bn and I discussed my flow expectations for this event in FTSE TWSE Dividend+ Quiddity Leaderboard Dec 22: New Methodology! Massive Flow Implications!
With less than three weeks remaining to the base date, below is an updated look at my latest flow expectations for this event.

MHI (7011) | The Time to Act on Energy Transition

It is just 3 days 7 hours 52 minutes before the private jets start touching down at Sharm El-Sheikh International Airport for COP27
Expect a lot of jawboning on energy transition and decarbonization – music to the ears of MHI shareholders
MHI excels at Energy Transition as carbon intensive industries such as power generation and steelmaking shift to decarbonize

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Nov 02

Daily Brief Industrials: Komatsu Ltd, Financial Select Sector SPDR Fund, CIMC Enric Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside
Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs
CIMC Enric (3899 HK): Maintaining a Solid Trend

Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside

Komatsu reported above Consensus 2Q OP; lifted OP guidance; and raised dividends. Outlook for next FY3/24 looks bright
Share price is pricing in a severe recession. A PBR of 1.1x is implies a significant OP decline. We see no evidence of an earnings contraction next year
We expect the share price to re-rate as the market prices in resilient earnings outlook. Our back test still suggests over 45% upside

Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

By Joe Jasper

The market remains in bear market rally mode, and our price target remains the 200-day MAs on the SPX and Russell 2000, as discussed in last week’s Compass (Oct. 25).
Longer-Term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, and markets could easily test their lows again.
With that said, there are signs that suggest breakouts above YTD downtrends/200-day MAs could be coming. Catalysts include the FOMC announcement on Wednesday, followed by midterm elections on Nov. 8.

CIMC Enric (3899 HK): Maintaining a Solid Trend

CIMC Enric Holdings (3899 HK) has a steady 3Q22 with good revenue growth for the chemical & environmental and liquid food segments. Management also said margin has expanded YoY.
Overall order backlog of Rmb13.7bn is generally sufficient to cover individual segment’s revenue over the next 6-15 months, comfortably securing the growth prospects.
With significant overseas revenue, it is benefiting from depreciation of Rmb against the USD. It also anticipates a pick-up in domestic clean energy segment growth in FY23.

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Nov 02

Daily Brief Industrials: Komatsu Ltd, Financial Select Sector SPDR Fund, CIMC Enric Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside
Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs
CIMC Enric (3899 HK): Maintaining a Solid Trend

Komatsu(6301) | Post 2Q Earnings – BACKTEST STILL Says over 45% Upside

Komatsu reported above Consensus 2Q OP; lifted OP guidance; and raised dividends. Outlook for next FY3/24 looks bright
Share price is pricing in a severe recession. A PBR of 1.1x is implies a significant OP decline. We see no evidence of an earnings contraction next year
We expect the share price to re-rate as the market prices in resilient earnings outlook. Our back test still suggests over 45% upside

Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

By Joe Jasper

The market remains in bear market rally mode, and our price target remains the 200-day MAs on the SPX and Russell 2000, as discussed in last week’s Compass (Oct. 25).
Longer-Term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, and markets could easily test their lows again.
With that said, there are signs that suggest breakouts above YTD downtrends/200-day MAs could be coming. Catalysts include the FOMC announcement on Wednesday, followed by midterm elections on Nov. 8.

CIMC Enric (3899 HK): Maintaining a Solid Trend

CIMC Enric Holdings (3899 HK) has a steady 3Q22 with good revenue growth for the chemical & environmental and liquid food segments. Management also said margin has expanded YoY.
Overall order backlog of Rmb13.7bn is generally sufficient to cover individual segment’s revenue over the next 6-15 months, comfortably securing the growth prospects.
With significant overseas revenue, it is benefiting from depreciation of Rmb against the USD. It also anticipates a pick-up in domestic clean energy segment growth in FY23.

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Nov 01

Daily Brief Industrials: Toshiba Corp, Hubei Feilihua Quartz Glas-A, Geek+, SoftBank Robotics, Hai Robotics, Wpil Ltd, XPeng Robotics, MegaRobo Technologies, UBTech Robotics, Dobot and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toshiba – How Much Risk Is There On A Deal Break?
ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
Geek+: Global Leader in Smart Logistics Robotic Technology
SoftBank Robotics: Robotics Arm of Japanese Conglomerate SoftBank
HAI Robotics: The Pioneer and Leader in ACR Robot Market
WPIL Ltd- Forensic Analysis
XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony
MegaRobo: China-Based Disruptor in Life Science Automation
UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn
Dobot: Make Smart Manufacturing Accessible

Toshiba – How Much Risk Is There On A Deal Break?

By Mio Kato

With Toshiba giving up its deal premium on news that the JIP consortium was struggling to secure financing it is worth assessing how much downside risk there is.
Prospects are deteriorating rapidly and we believe valuations for Kioxia and the HDD business are likely to lead the way down.
We estimate that there is still a premium of about 20-25% being assessed for the possibility of a deal but that there is fundamental risk beyond this.

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.

Geek+: Global Leader in Smart Logistics Robotic Technology

Geek+ is the fastest-growing robotics startup and producer of warehouse robots powered by AI and deep learning algorithms. The company successfully integrates logistics with robots.
Beijing-Based Geek+ has raised a total of ~$532M in funding over 7 rounds. The last round was a $100M Series E in August 2022 that was led by Intel Capital.
Warehouse robots have a huge market potential driven by rising labor costs in China, lack of human labor in the warehouse segment, and huge fluctuations in production capacity.

SoftBank Robotics: Robotics Arm of Japanese Conglomerate SoftBank

SoftBank Robotics is a pioneer in the industry of service robots and human-robot interactions. The company unveiled the world’s first social humanoid robot Pepper in 2014.
Alibaba Group and Foxconn Technology have invested $118M each in SoftBank Robotics: 5%+ investor shareholders include Alibaba (20%), Foxconn (20%), and SoftBank holds a 60% stake.
The company is struggling to grow revenues, and the business is structurally unprofitable. However, SoftBank Robotics announced RI strategy with plans to introduce a new series of smart robots.

HAI Robotics: The Pioneer and Leader in ACR Robot Market

Founded in 2016 by Richie Chen and Shengdong Xu, HAI Robotics is a pioneer in ACR systems and warehouse automation robotics unicorn.
HAI Robotics offers flexible automation solutions to improve efficiency while reducing costs. The company’s vision is to utilize robotics to create and deliver value to each factory and warehouse.
China is the hub for the production of AMRs and ACRs, easing the workforce shortage, improving operational efficiency, saving additional storage, and handling a wide range of SKUs.

WPIL Ltd- Forensic Analysis

By Nitin Mangal

Wpil Ltd (WPI IN) is principally engaged the business of pumps & pumping systems. The company recently has also started construction contracts related to water supply and irrigation.
Key forensic takeaways include transactions with related parties and promoters, receivables related concerns, auditor woes, etc.
Additionally, it is also noticed that WPIL does not exhibit strong disclosure norms in its annual report. Key disclosures regarding receivables, fixed assets, goodwill remain translucent.

XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony

XPeng Robotics is a bionic smart robot maker backed by Chinese EV giant XPeng and high-profile investor IDG Capital. The company focuses on AI, robot autonomy, and interaction.
Founded in 2016 and headquartered in Shenzhen, XPeng Robotics is an affiliate of XPeng, with R&D centers in Beijing, Guangzhou, and Silicon Valley.
Bloomberg reported that $100M+ Series A financing was the largest single-tranche fundraising for the bionic robot sector in China in the past two years.

MegaRobo: China-Based Disruptor in Life Science Automation

MegaRobo is a leader in life science automation, founded in 2016 by CEO Daniel Huang and CMO Zhixin Qiao. The company reached a unicorn valuation of $1B+ in 2022.
MegaRobo wants to improve the efficiency of life sciences research by using robotics and AI technology. In June 2022, AI and robotics unicorn closed the $300M Series C round.
Using AI in R&D drug discovery is gaining traction. The global lab automation market is a ~$5B opportunity and is expected to reach ~$9.4B by 2030.

UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn

UBTech Robotics is a pioneer in AI and leader in intelligent humanoid robots. The company commercialized robots for consumers with a mission to deliver the affordable robot to each family.
UBTech Robotics has raised ~$940M in equity financing and closed an $820M Series C round in May 2018, the single largest funding ever for AI private company.
We were impressed by healthy growth at scale, diversified business lines, core AI and robotics technologies, and strong partnerships with Tencent, Apple, and Walt Disney.

Dobot: Make Smart Manufacturing Accessible

Dobot is a Chinese manufacturer and leading provider of all-perceptive intelligent robotic arms backed by top-tier investment bank CICC and high-profile investors.
Dobot has raised a total of ~CN¥490M in funding over 3 rounds. Investors include Qianhai Fund of Funds, Shenzhen Capital Group, CICC, Potential Capital and Green Pine Capital Partners.
The global industrial robotics market is an $80B+ opportunity. The number of robots installed in the automotive industry in China has doubled in 2021.

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Nov 01

Daily Brief Industrials: Toshiba Corp, Hubei Feilihua Quartz Glas-A, Geek+, SoftBank Robotics, Hai Robotics, Wpil Ltd, XPeng Robotics, MegaRobo Technologies, UBTech Robotics, Dobot and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toshiba – How Much Risk Is There On A Deal Break?
ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion
Geek+: Global Leader in Smart Logistics Robotic Technology
SoftBank Robotics: Robotics Arm of Japanese Conglomerate SoftBank
HAI Robotics: The Pioneer and Leader in ACR Robot Market
WPIL Ltd- Forensic Analysis
XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony
MegaRobo: China-Based Disruptor in Life Science Automation
UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn
Dobot: Make Smart Manufacturing Accessible

Toshiba – How Much Risk Is There On A Deal Break?

By Mio Kato

With Toshiba giving up its deal premium on news that the JIP consortium was struggling to secure financing it is worth assessing how much downside risk there is.
Prospects are deteriorating rapidly and we believe valuations for Kioxia and the HDD business are likely to lead the way down.
We estimate that there is still a premium of about 20-25% being assessed for the possibility of a deal but that there is fundamental risk beyond this.

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.

Geek+: Global Leader in Smart Logistics Robotic Technology

Geek+ is the fastest-growing robotics startup and producer of warehouse robots powered by AI and deep learning algorithms. The company successfully integrates logistics with robots.
Beijing-Based Geek+ has raised a total of ~$532M in funding over 7 rounds. The last round was a $100M Series E in August 2022 that was led by Intel Capital.
Warehouse robots have a huge market potential driven by rising labor costs in China, lack of human labor in the warehouse segment, and huge fluctuations in production capacity.

SoftBank Robotics: Robotics Arm of Japanese Conglomerate SoftBank

SoftBank Robotics is a pioneer in the industry of service robots and human-robot interactions. The company unveiled the world’s first social humanoid robot Pepper in 2014.
Alibaba Group and Foxconn Technology have invested $118M each in SoftBank Robotics: 5%+ investor shareholders include Alibaba (20%), Foxconn (20%), and SoftBank holds a 60% stake.
The company is struggling to grow revenues, and the business is structurally unprofitable. However, SoftBank Robotics announced RI strategy with plans to introduce a new series of smart robots.

HAI Robotics: The Pioneer and Leader in ACR Robot Market

Founded in 2016 by Richie Chen and Shengdong Xu, HAI Robotics is a pioneer in ACR systems and warehouse automation robotics unicorn.
HAI Robotics offers flexible automation solutions to improve efficiency while reducing costs. The company’s vision is to utilize robotics to create and deliver value to each factory and warehouse.
China is the hub for the production of AMRs and ACRs, easing the workforce shortage, improving operational efficiency, saving additional storage, and handling a wide range of SKUs.

WPIL Ltd- Forensic Analysis

By Nitin Mangal

Wpil Ltd (WPI IN) is principally engaged the business of pumps & pumping systems. The company recently has also started construction contracts related to water supply and irrigation.
Key forensic takeaways include transactions with related parties and promoters, receivables related concerns, auditor woes, etc.
Additionally, it is also noticed that WPIL does not exhibit strong disclosure norms in its annual report. Key disclosures regarding receivables, fixed assets, goodwill remain translucent.

XPeng Robotics: Early-Stage VC Investment in Developer of Smart Robot Pony

XPeng Robotics is a bionic smart robot maker backed by Chinese EV giant XPeng and high-profile investor IDG Capital. The company focuses on AI, robot autonomy, and interaction.
Founded in 2016 and headquartered in Shenzhen, XPeng Robotics is an affiliate of XPeng, with R&D centers in Beijing, Guangzhou, and Silicon Valley.
Bloomberg reported that $100M+ Series A financing was the largest single-tranche fundraising for the bionic robot sector in China in the past two years.

MegaRobo: China-Based Disruptor in Life Science Automation

MegaRobo is a leader in life science automation, founded in 2016 by CEO Daniel Huang and CMO Zhixin Qiao. The company reached a unicorn valuation of $1B+ in 2022.
MegaRobo wants to improve the efficiency of life sciences research by using robotics and AI technology. In June 2022, AI and robotics unicorn closed the $300M Series C round.
Using AI in R&D drug discovery is gaining traction. The global lab automation market is a ~$5B opportunity and is expected to reach ~$9.4B by 2030.

UBTech Robotics: China’s Global AI and High-Tech Robotics Unicorn

UBTech Robotics is a pioneer in AI and leader in intelligent humanoid robots. The company commercialized robots for consumers with a mission to deliver the affordable robot to each family.
UBTech Robotics has raised ~$940M in equity financing and closed an $820M Series C round in May 2018, the single largest funding ever for AI private company.
We were impressed by healthy growth at scale, diversified business lines, core AI and robotics technologies, and strong partnerships with Tencent, Apple, and Walt Disney.

Dobot: Make Smart Manufacturing Accessible

Dobot is a Chinese manufacturer and leading provider of all-perceptive intelligent robotic arms backed by top-tier investment bank CICC and high-profile investors.
Dobot has raised a total of ~CN¥490M in funding over 3 rounds. Investors include Qianhai Fund of Funds, Shenzhen Capital Group, CICC, Potential Capital and Green Pine Capital Partners.
The global industrial robotics market is an $80B+ opportunity. The number of robots installed in the automotive industry in China has doubled in 2021.

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Oct 31

Daily Brief Industrials: Sichuan Tianyi Science & A, Moya Holdings Asia, Keppel Corp, Dongfang Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
Moya Holding’s EGM for S$0.092 Offer on 21 November
Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay
Dongfang Electric (1072 HK): Surge in 3Q22 Profit and Acceleration of New Orders

CSI500 Index Rebalance Preview: 50 Adds/Deletes in December

With a day left in the review period, we forecast 50 changes (the maximum permitted) for the CSI500 Index at the close on 9 December.
We estimate a one-way turnover of 13.53% at the December rebalance leading to a one-way trade of CNY 8.01bn. The Materials, Consumer Discretionary and Information Technology sectors are net gainers.
The potential adds and potential deletes have performed in line over the last few weeks, and we’d look to position for outperformance post the end of the review period.

Moya Holdings: 21 Nov EGM For Salim’s Exit Offer

On the 14 September, Indonesian water treatment play Moya Holdings Asia (MHAL SP) announced a S$0.092/share Exit Offer from an Anthoni Salim-controlled entity. The Offer price will not be increased.
The Offer requires approval from 75% of disinterested shareholders. Tamaris and its concert parties hold 72.84%.
The Circular is now out. The EGM takes place on the 21 November. The IFA reckons the Offer is fair and reasonable.

Moya Holding’s EGM for S$0.092 Offer on 21 November

Moya Holdings Asia (MHAL SP) released its delisting circular. The EGM to approve the delisting proposal from Tamaris Infrastructure (Anthoni Salim) at S$0.092 per share is on 21 November.
The IFA says the offer is fair and reasonable. Gateway Partners, which holds a blocking stake, will likely use the offer as an opportunity to exit an underperforming investment.
The offer price is attractive and will likely succeed. At the last close price, the gross and annualised spread for a 30 November payment is 3.4% and 45.8%, respectively.

Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Blibli (1437710D IJ) priced at IDR450, Giant Biogene Holding (2367 HK) priced at the bottom of the range, GoTo (GOTO IJ)‘s upcoming lock-up expiry.
Event-Driven developments – Keppel Corp (KEP SP), Shandong Fengxiang (9977 HK), Jinke Smart Services (9666 HK), Kingston Financial (1031 HK), Lifestyle International Holdings (1212 HK), Pushpay Holdings (PPH NZ), Nitro.

Dongfang Electric (1072 HK): Surge in 3Q22 Profit and Acceleration of New Orders

Dongfang Electric (1072 HK) logged a 40.1% growth in reported profit and a 36.5% increase in new orders in 3Q22, both represent excellent sequential momentum.
A 0.5pp 3Q22 gross margin expansion demonstrated order execution and cost control strengths. We also forecast end-FY22 backlog at 1.8x FY22F revenue, well securing outlook.
DEC is set to see accelerated growth momentum from rising power storage, particularly pumped storage, demand in the medium term. Yet, it only trades on cheap 8.1x FY23F PER.

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Oct 31

Daily Brief Industrials: Sichuan Tianyi Science & A, Moya Holdings Asia, Keppel Corp, Dongfang Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

CSI500 Index Rebalance Preview: 50 Adds/Deletes in December
Moya Holdings: 21 Nov EGM For Salim’s Exit Offer
Moya Holding’s EGM for S$0.092 Offer on 21 November
Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay
Dongfang Electric (1072 HK): Surge in 3Q22 Profit and Acceleration of New Orders

CSI500 Index Rebalance Preview: 50 Adds/Deletes in December

With a day left in the review period, we forecast 50 changes (the maximum permitted) for the CSI500 Index at the close on 9 December.
We estimate a one-way turnover of 13.53% at the December rebalance leading to a one-way trade of CNY 8.01bn. The Materials, Consumer Discretionary and Information Technology sectors are net gainers.
The potential adds and potential deletes have performed in line over the last few weeks, and we’d look to position for outperformance post the end of the review period.

Moya Holdings: 21 Nov EGM For Salim’s Exit Offer

On the 14 September, Indonesian water treatment play Moya Holdings Asia (MHAL SP) announced a S$0.092/share Exit Offer from an Anthoni Salim-controlled entity. The Offer price will not be increased.
The Offer requires approval from 75% of disinterested shareholders. Tamaris and its concert parties hold 72.84%.
The Circular is now out. The EGM takes place on the 21 November. The IFA reckons the Offer is fair and reasonable.

Moya Holding’s EGM for S$0.092 Offer on 21 November

Moya Holdings Asia (MHAL SP) released its delisting circular. The EGM to approve the delisting proposal from Tamaris Infrastructure (Anthoni Salim) at S$0.092 per share is on 21 November.
The IFA says the offer is fair and reasonable. Gateway Partners, which holds a blocking stake, will likely use the offer as an opportunity to exit an underperforming investment.
The offer price is attractive and will likely succeed. At the last close price, the gross and annualised spread for a 30 November payment is 3.4% and 45.8%, respectively.

Weekly Deals Digest (30 Oct) – Keppel, GoTo, Fengxiang, Lifestyle, Jinke Services, Kingston, Pushpay

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Blibli (1437710D IJ) priced at IDR450, Giant Biogene Holding (2367 HK) priced at the bottom of the range, GoTo (GOTO IJ)‘s upcoming lock-up expiry.
Event-Driven developments – Keppel Corp (KEP SP), Shandong Fengxiang (9977 HK), Jinke Smart Services (9666 HK), Kingston Financial (1031 HK), Lifestyle International Holdings (1212 HK), Pushpay Holdings (PPH NZ), Nitro.

Dongfang Electric (1072 HK): Surge in 3Q22 Profit and Acceleration of New Orders

Dongfang Electric (1072 HK) logged a 40.1% growth in reported profit and a 36.5% increase in new orders in 3Q22, both represent excellent sequential momentum.
A 0.5pp 3Q22 gross margin expansion demonstrated order execution and cost control strengths. We also forecast end-FY22 backlog at 1.8x FY22F revenue, well securing outlook.
DEC is set to see accelerated growth momentum from rising power storage, particularly pumped storage, demand in the medium term. Yet, it only trades on cheap 8.1x FY23F PER.

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Oct 30

Daily Brief Industrials: Hyundai Elevator Co, Monadelphous, Keppel Corp, Hitachi Transport System and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Hyundai Elevator: Announces a Major Share Buyback Program
Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP
Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl
(Mostly) Asia-Pac Weekly Risk Arb Wrap: ELMO, Kingston Financial, Hitachi Transport, Nearmap, Aruhi

Hyundai Elevator: Announces a Major Share Buyback Program

By Douglas Kim

On 28 October, Hyundai Elevator Co (017800 KS) announced a major share buyback program worth 2.1 million shares, representing 5.1% of outstanding shares or about 50 billion won.
Hyundai Elevator Co Ltd makes excellent elevators and it is the number one player in the elevator industry in Korea with a 41% market share as of 2Q 2022.
Despite the company’s valuations trading at lower levels than its recent historical levels, the negative factors impacting the company are much bigger in scale than the share buyback program.

Index Rebalance & ETF Flow Recap: S&P/ASX, STAR50, CSI300, SSE50, IDX, GOTO, SMM/KEP

The review period for the MSCI Nov SAIR, Kospi 200 Index, KOSDAQ 150 Index, S&P BSE SENSEX Index and a bunch of mainland China indices ends on 31 October.
The minor rebalancing of the IDX30, LQ45 and IDX80 indices takes place at the close on 31 October, while the KOSDAQ 150 Index ad hoc rebalance is on 2 November.
There were outflows from IShares Core MSCI Asia Ex Japan ETF (3010 HK) and inflows to Tracker Fund (2800 HK) and Hang Seng H Share Index ETF (2828 HK).

Last Week In Event SPACE: Keppel/Sembcorp, Socionext, Jinke Smart, Hitachi Transport, Lifestyle Intl

Under revised terms, Sembcorp (SMM SP) will issue fewer shares to Keppel (KEP SP). It’s now a takeover rather than Scheme. Keppel will deliver more shares to shareholders, keeping less.
Stay cautiously positive on Socionext (6526 JP) until the stock starts trading as if those who bought on momentum look like they are getting out.
With investors chucking in the towel and the HSI touching a thirteen-year low, it’s time for some old-school perspective applying Benjamin Graham’s Net Nets

(Mostly) Asia-Pac Weekly Risk Arb Wrap: ELMO, Kingston Financial, Hitachi Transport, Nearmap, Aruhi