Category

Industrials

Jul 19
0

Daily Brief Industrials: LG Energy Solution, Nidec Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • LG Energy IPO Lock-Up – Largest Lockup Release of the Lot at US$3bn
  • Nidec (6594) | Q1 to Beat on Falling Raw Material Costs

LG Energy IPO Lock-Up – Largest Lockup Release of the Lot at US$3bn

By Sumeet Singh

  • LG Energy Solution (LGES) raised US$10.8bn in its South Korea IPO. The stock was listed on 27th Jan 22. Its six-month lockup is set to expire soon.
  • LGES is the EV battery unit of LG Chem. The company is a major supplier to customers including Tesla and General Motors.
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

Nidec (6594) | Q1 to Beat on Falling Raw Material Costs

By Mark Chadwick

  • Nidec share price has declined by 32% YTD on the temporary impact of inflation and lockdowns 
  • We expect a Q1 beat (tomorrow) as lower raw material input costs and the weak yen boost operating profits 
  • We are bullish on the stock at 31x forward earnings versus the 5-year average of 55x, especially as China accelerates policies to drive EV adoption  

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Jul 18
0

Daily Brief Industrials: IR Japan Holdings Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Governance of Companies in Which the Founder Owns Majority of the Shares Should Also Be Discussed

Governance of Companies in Which the Founder Owns Majority of the Shares Should Also Be Discussed

By Aki Matsumoto

  • I hope that the investigation by SESC will lead to the establishment of compliance system for these IR vendors, although IR vendors have been left unchecked by insider trading regulations.
  • Apart from this issue, there is much room for discussion on the issue of governance for a company listed in which the founder owns more than 50% of the shares.
  • This is the same problem that occurs with parent-subsidiary listings. For increasing the listed companies, TSE has permitted the listing of companies in which the founder owns majority of shares.

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Jul 18
0

Daily Brief Industrials: IR Japan Holdings Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Governance of Companies in Which the Founder Owns Majority of the Shares Should Also Be Discussed

Governance of Companies in Which the Founder Owns Majority of the Shares Should Also Be Discussed

By Aki Matsumoto

  • I hope that the investigation by SESC will lead to the establishment of compliance system for these IR vendors, although IR vendors have been left unchecked by insider trading regulations.
  • Apart from this issue, there is much room for discussion on the issue of governance for a company listed in which the founder owns more than 50% of the shares.
  • This is the same problem that occurs with parent-subsidiary listings. For increasing the listed companies, TSE has permitted the listing of companies in which the founder owns majority of shares.

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Jul 17
0

Daily Brief Industrials: WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • WCP Passive Flow Analysis: KOSDAQ 150 Early Entry & Local Battery ETFs

WCP Passive Flow Analysis: KOSDAQ 150 Early Entry & Local Battery ETFs

By Sanghyun Park

  • WCP will enter the KOSDAQ 150 with a passive inflow of about 530K shares, 1.5% of SO, at the close on December 8.
  • WCP will be added to the TIGER ETF on October 14 with a passive inflow of about 345K shares, 1.0% of SO, at the close on October 14.
  • From a flow trading perspective, the flow volume is certainly substantial enough to design a passive flow trading setup in conjunction with the lockup release schedule.

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Jul 17
0

Daily Brief Industrials: WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • WCP Passive Flow Analysis: KOSDAQ 150 Early Entry & Local Battery ETFs

WCP Passive Flow Analysis: KOSDAQ 150 Early Entry & Local Battery ETFs

By Sanghyun Park

  • WCP will enter the KOSDAQ 150 with a passive inflow of about 530K shares, 1.5% of SO, at the close on December 8.
  • WCP will be added to the TIGER ETF on October 14 with a passive inflow of about 345K shares, 1.0% of SO, at the close on October 14.
  • From a flow trading perspective, the flow volume is certainly substantial enough to design a passive flow trading setup in conjunction with the lockup release schedule.

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Jul 16
0

Daily Brief Industrials: T’Way Air, Adi Sarana Armada, Baycurrent Consulting, Hyundai Motor, WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
  • Adi Sarana Armada (ASSA IJ) – Building on Pillars
  • BayCurrent (6532) | Jumping in Ahead of Earnings
  • Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?
  • WCP IPO: Valuation Insights

WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return

By Sanghyun Park

  • The ETF operator (TIGER)’s index tracking conformity was high enough to create trading opportunities aimed at the rebalancing flow.
  • Flow/Price directions were mostly synched with only a few exceptions. Of particular importance is that the price impact was substantial compared to the passive flow size. 
  • The yield of the tradable names suitable for a basket based on the projected passive impact size was 4.51%.

Adi Sarana Armada (ASSA IJ) – Building on Pillars

By Angus Mackintosh

  • Adi Sarana Armada (ASSA IJ) continues to build on its three pillars of growth across transport, used car sales, and logistics including its leading last-mile delivery service under Anteraja.
  • The company’s market-leading auto leasing business provides stable revenue and a source of used cars for the auction and online used car business under Caroline.
  • Last-Mile delivery player Anteraja is already the largest revenue contributor and increasing profit driver, with significant upside through automation and scale. Valuations attractive after recent correction at 8.3x FY2022E EV/EBITDA.

BayCurrent (6532) | Jumping in Ahead of Earnings

By Mark Chadwick

  • The company will report Q1 earnings today. We think they will beat expectations
  • The stock has been a poor performer so far this year, despite profitable growth
  • BayCurrent is THE key beneficiary of Digital Transformation in Japan

Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?

By Douglas Kim

  • Hyundai Motor (005380 KS) launched its long-awaited Ioniq 6 on 14 July. This is the first EV sedan by Hyundai Motor.
  • Ioniq 6 could be a big winner for Hyundai Motor. Among all the features of Ioniq 6, the driving range is the biggest improvement versus Ioniq 5. 
  • The combination of attractive price, sleek design, and higher driving range is likely to result in a strong demand for Ioniq 6.

WCP IPO: Valuation Insights

By Arun George

  • WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
  • In WCP IPO: Hooked on Lithium we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins. 
  • In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.

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Jul 16
0

Daily Brief Industrials: T’Way Air, Adi Sarana Armada, Baycurrent Consulting, Hyundai Motor, WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return
  • Adi Sarana Armada (ASSA IJ) – Building on Pillars
  • BayCurrent (6532) | Jumping in Ahead of Earnings
  • Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?
  • WCP IPO: Valuation Insights

WISE Theme Indexes Rebalancing: Conformity of Passive Flow to Price Return

By Sanghyun Park

  • The ETF operator (TIGER)’s index tracking conformity was high enough to create trading opportunities aimed at the rebalancing flow.
  • Flow/Price directions were mostly synched with only a few exceptions. Of particular importance is that the price impact was substantial compared to the passive flow size. 
  • The yield of the tradable names suitable for a basket based on the projected passive impact size was 4.51%.

Adi Sarana Armada (ASSA IJ) – Building on Pillars

By Angus Mackintosh

  • Adi Sarana Armada (ASSA IJ) continues to build on its three pillars of growth across transport, used car sales, and logistics including its leading last-mile delivery service under Anteraja.
  • The company’s market-leading auto leasing business provides stable revenue and a source of used cars for the auction and online used car business under Caroline.
  • Last-Mile delivery player Anteraja is already the largest revenue contributor and increasing profit driver, with significant upside through automation and scale. Valuations attractive after recent correction at 8.3x FY2022E EV/EBITDA.

BayCurrent (6532) | Jumping in Ahead of Earnings

By Mark Chadwick

  • The company will report Q1 earnings today. We think they will beat expectations
  • The stock has been a poor performer so far this year, despite profitable growth
  • BayCurrent is THE key beneficiary of Digital Transformation in Japan

Hyundai Motor’s Ioniq 6 – To Take Away More Market Share From Tesla Model 3 Sedan?

By Douglas Kim

  • Hyundai Motor (005380 KS) launched its long-awaited Ioniq 6 on 14 July. This is the first EV sedan by Hyundai Motor.
  • Ioniq 6 could be a big winner for Hyundai Motor. Among all the features of Ioniq 6, the driving range is the biggest improvement versus Ioniq 5. 
  • The combination of attractive price, sleek design, and higher driving range is likely to result in a strong demand for Ioniq 6.

WCP IPO: Valuation Insights

By Arun George

  • WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.
  • In WCP IPO: Hooked on Lithium we noted that WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins. 
  • In this note, we look at the syndicate’s valuation methodology. Our valuation analysis suggests that the IPO price range is unattractive and we would pass on the IPO.

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Jul 15
0

Daily Brief Industrials: Deewin Tianxia, Recruit Holdings, Bharat FIH, SCG Packaging Public Company Limited, WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed
  • HRTech Sector Series: Changing HR Landscape Post-Covid Create Opportunities
  • Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet
  • SCGP : Time to Repack for Brighter 2H22 Outlook
  • WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed

By Clarence Chu

  • Deewin Tianxia (2418 HK) raised around US$123m in its Hong Kong IPO.
  • DT’s subscription rates had been lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
  • Given its smaller size, in our view, the firm should come in at a discount to its peer average.

HRTech Sector Series: Changing HR Landscape Post-Covid Create Opportunities

By Shifara Samsudeen, ACMA, CGMA

  • The global HRTech market is forecast to grow at a CAGR of 5.8% between 2022-2028E to US$35.68bn driven by increased investment in product and technology development.
  • We have chosen four companies that will have an exciting year ahead (either bullish or bearish) and have discussed their business models, key drivers, fundamentals and their valuation.
  • We have chosen two stocks from the US (Ceridian and Automatic Data Processing) and two from Japan (Recruit and Visional) with a market capitalisation of >$1bn and ADTV>$1m.

Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet

By Sumeet Singh

  • Bharat FIH (BFIH) aims to raise around US$660m in its India IPO via selling a mix of both primary and secondary shares. BFIH is a subsidiary of Foxconn.
  • Its initial operations were focused on mobile phones, of late it has been expanding its portfolio to include mechanics, electric vehicles, televisions and hearables. 
  • In this note, we will talk about the not so positive aspects of the deal.

SCGP : Time to Repack for Brighter 2H22 Outlook

By Pi Research

  • We retain our BUY rating with a TP of Bt66 derived from 33xPE’22E which is close to its 3-years trailing mean. We recommend investors to increase position in SCGP ahead 
  • Modest recovery in 2Q22, post 1Q22 bottom : We estimate 2Q22 core profit at Bt1.9bn (-8%YoY, +12%QoQ) based on assuming gross margin of 17.4% (-3.1ppts YoY, +0.3ppts QoQ). 
  • Likewise, we forecast the company to register revenue at Bt38.1bn (+28%YoY, +4%QoQ). The YoY rise is attributed to healthier demand volume and M&Ps contribution, upon the resumption of economic activities 

WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

By Sumeet Singh

  • WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
  • WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
  • In this note, we will talk about the not-so-positive aspects of the deal.

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Jul 15
0

Daily Brief Industrials: Deewin Tianxia, Recruit Holdings, Bharat FIH, SCG Packaging Public Company Limited, WCP and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed
  • HRTech Sector Series: Changing HR Landscape Post-Covid Create Opportunities
  • Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet
  • SCGP : Time to Repack for Brighter 2H22 Outlook
  • WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

Deewin Tianxia IPO Trading – Weak Subscription Rates, Retail Portion Undersubscribed

By Clarence Chu

  • Deewin Tianxia (2418 HK) raised around US$123m in its Hong Kong IPO.
  • DT’s subscription rates had been lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
  • Given its smaller size, in our view, the firm should come in at a discount to its peer average.

HRTech Sector Series: Changing HR Landscape Post-Covid Create Opportunities

By Shifara Samsudeen, ACMA, CGMA

  • The global HRTech market is forecast to grow at a CAGR of 5.8% between 2022-2028E to US$35.68bn driven by increased investment in product and technology development.
  • We have chosen four companies that will have an exciting year ahead (either bullish or bearish) and have discussed their business models, key drivers, fundamentals and their valuation.
  • We have chosen two stocks from the US (Ceridian and Automatic Data Processing) and two from Japan (Recruit and Visional) with a market capitalisation of >$1bn and ADTV>$1m.

Bharat FIH Pre-IPO – The Negatives – Not a Whole Lot to Show Yet

By Sumeet Singh

  • Bharat FIH (BFIH) aims to raise around US$660m in its India IPO via selling a mix of both primary and secondary shares. BFIH is a subsidiary of Foxconn.
  • Its initial operations were focused on mobile phones, of late it has been expanding its portfolio to include mechanics, electric vehicles, televisions and hearables. 
  • In this note, we will talk about the not so positive aspects of the deal.

SCGP : Time to Repack for Brighter 2H22 Outlook

By Pi Research

  • We retain our BUY rating with a TP of Bt66 derived from 33xPE’22E which is close to its 3-years trailing mean. We recommend investors to increase position in SCGP ahead 
  • Modest recovery in 2Q22, post 1Q22 bottom : We estimate 2Q22 core profit at Bt1.9bn (-8%YoY, +12%QoQ) based on assuming gross margin of 17.4% (-3.1ppts YoY, +0.3ppts QoQ). 
  • Likewise, we forecast the company to register revenue at Bt38.1bn (+28%YoY, +4%QoQ). The YoY rise is attributed to healthier demand volume and M&Ps contribution, upon the resumption of economic activities 

WCP IPO – The Negatives – Patent, Going Concern, Customer Concentration

By Sumeet Singh

  • WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
  • WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
  • In this note, we will talk about the not-so-positive aspects of the deal.

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Jul 14
0

Daily Brief Industrials: Wan Hai Lines, United Tractors, WCP, Renesas Electronics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes
  • United Tractors (UNTR IJ) Buyback – Sure to Be Impactful
  • WCP IPO: Hooked on Lithium
  • Renesas Electronics (6723 JP): Tie-Ups with Tata Group Add to Growth Potential
  • WCP IPO – The Positives – Past Sales Have Been Very Strong

FTSE TWSE Taiwan Dividend+ Index Rebalance Preview: BIG Impact Changes

By Brian Freitas

  • The FTSE TWSE Taiwan Dividend+ Index is a funky one that weights stocks by dividend yield. Given dependency on dividends and stock prices, the potential adds/deletes can change often.
  • We currently see three changes to the index in December, with another stock very close to deletion zone. Given the difference in market cap and dividend yield, impacts are big.
  • There will be large flows on the current index names at the September rebalance due to capping.

United Tractors (UNTR IJ) Buyback – Sure to Be Impactful

By Travis Lundy

  • Yesterday, United Tractors (UNTR IJ) announced a large share buyback. It’s a big buyback but perhaps not as big as the headlines (which say “up to 20%”). 
  • The buyback is for 5 trillion rupiah which is about 5% of market cap, and will be conducted on-market over the next three months.
  • Looking at the early market reaction, my opinion is that the market does not seem to understand the consequences.

WCP IPO: Hooked on Lithium

By Arun George

  • WCP (WCP KS), a lithium-ion batteries separator company, is planning to launch a KRW900 billion (US$692 million) IPO in August.  
  • The price range of KRW80,000-100,000 implies a market cap of KRW2.7-3.4 trillion (US$2.1-2.6 billion).
  • WCP has attractive fundamentals due to the favourable demand/supply balance, technology, strong revenue growth and improving margins. 

Renesas Electronics (6723 JP): Tie-Ups with Tata Group Add to Growth Potential

By Scott Foster

  • Renesas and Tata Group companies have announced a new partnership in electronic systems and wireless telecom for automotive and other applications.
  • Specifically, they are working on the development of electric vehicles and industrial system solutions combining their semiconductor, IT system and manufacturing expertise.
  • This should provide a significant boost to their business in India and global markets. As Mio Kato wrote in late April, Renesas – Like We Said… Accelerating 

WCP IPO – The Positives – Past Sales Have Been Very Strong

By Sumeet Singh

  • WCP aims to raise around US$690m via selling a mix of primary and secondary shares in its Korean IPO.
  • WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries
  • In this note, we will talk about the positive aspects of the deal.

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