Industrials

• Marine and subsea services provider MMA Offshore (MRM AU) has entered into a Scheme with Singapore’s Cyan Renewables. 
• Cyan, wholly-owned by Seraya Partners, is offering A$2.60/share in cash, a 11% premium to last close and a 31% premium to the 90-day VWAP. 
• MMA shareholder approval and FIRB are the key conditions. This Offer will tentatively complete mid-late July. 

• Mma Offshore (MRM AU) has entered a scheme implementation deed with Seraya Partners at A$2.60 per share, a 10.6% premium to the undisturbed price (22 March).
• While the offer is attractive compared to historical prices, it is light compared to peer and historical multiples. Some shareholders are supportive, while others are not. 
• The shares are trading at terms that suggest an expectation for a bump to get the vote up or a competing bidder. The offer has not been declared final.

• Strong uptick in price momentum in February reflects booming spot market
• February container throughput growth in key regions also firm, up 7.4% Y/Y
• We suggest Short Evergreen vs Long Maersk (or ZIM) pair trade idea

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2024 index rebal event.
• I do not see any changes for the T50 index but there could be at least four changes for the T100 index based on current data.
• If prices fluctuate significantly between now and the base date, there could be more changes.

• Headline February numbers look pretty good — but they’re misleading
• On a combined basis, January-February data show ASPs still under pressure
• Recent results from ZTO and J&T Global have been unimpressive, in our view

Ocean Wilsons Holdings’ (OCN’s) FY23 results highlight a robust performance from the Brazilian subsidiary Wilson Sons, as well as growth from the investment portfolio. Our forecasts are under review following the announcement but, prior to this, we valued OCN at 2,564p/share, which implies it is currently trading at a 48% discount. Given the strong trading and optimistic outlook, risks appear to be to the upside.

• Marine and subsea services provider MMA Offshore (MRM AU) has entered into a Scheme with Singapore’s Cyan Renewables. 
• Cyan, wholly-owned by Seraya Partners, is offering A$2.60/share in cash, a 11% premium to last close and a 31% premium to the 90-day VWAP. 
• MMA shareholder approval and FIRB are the key conditions. This Offer will tentatively complete mid-late July. 

• Mma Offshore (MRM AU) has entered a scheme implementation deed with Seraya Partners at A$2.60 per share, a 10.6% premium to the undisturbed price (22 March).
• While the offer is attractive compared to historical prices, it is light compared to peer and historical multiples. Some shareholders are supportive, while others are not. 
• The shares are trading at terms that suggest an expectation for a bump to get the vote up or a competing bidder. The offer has not been declared final.

• Strong uptick in price momentum in February reflects booming spot market
• February container throughput growth in key regions also firm, up 7.4% Y/Y
• We suggest Short Evergreen vs Long Maersk (or ZIM) pair trade idea

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the June 2024 index rebal event.
• I do not see any changes for the T50 index but there could be at least four changes for the T100 index based on current data.
• If prices fluctuate significantly between now and the base date, there could be more changes.

• Headline February numbers look pretty good — but they’re misleading
• On a combined basis, January-February data show ASPs still under pressure
• Recent results from ZTO and J&T Global have been unimpressive, in our view

Ocean Wilsons Holdings’ (OCN’s) FY23 results highlight a robust performance from the Brazilian subsidiary Wilson Sons, as well as growth from the investment portfolio. Our forecasts are under review following the announcement but, prior to this, we valued OCN at 2,564p/share, which implies it is currently trading at a 48% discount. Given the strong trading and optimistic outlook, risks appear to be to the upside.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: APM Human Services Internation (APM AU), Chilled & Frozen Logistics Holdings (9099 JP), Qantm Intellectual Property (QIP AU), Genex Power Ltd (GNX AU), Probiotec Ltd (PBP AU).
• Lowest spreads: Roland DG Corp (6789 JP), Tietto Minerals Ltd (TIE AU), CPMC Holdings (906 HK), Pact Group Holdings (PGH AU), Vinda International (3331 HK), Snow Peak Inc (7816 JP).

• Organic growth in J&T’s China operations exceeded that of peers…
• …but the implosion of New Markets and X-Border is a shock
• Lower margins from SE Asian cash cow also a surprise, in our view

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net SELL RMB 7.8bn of A-shares on decent volume after buying RMB 32.8bn the week before. This is a small sell vs 6 weeks of buying.
• The volume now is still chasing momentum. CATL the big buy, and less passive-feeling than last week.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: APM Human Services Internation (APM AU), Chilled & Frozen Logistics Holdings (9099 JP), Qantm Intellectual Property (QIP AU), Genex Power Ltd (GNX AU), Probiotec Ltd (PBP AU).
• Lowest spreads: Roland DG Corp (6789 JP), Tietto Minerals Ltd (TIE AU), CPMC Holdings (906 HK), Pact Group Holdings (PGH AU), Vinda International (3331 HK), Snow Peak Inc (7816 JP).

• Organic growth in J&T’s China operations exceeded that of peers…
• …but the implosion of New Markets and X-Border is a shock
• Lower margins from SE Asian cash cow also a surprise, in our view

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net SELL RMB 7.8bn of A-shares on decent volume after buying RMB 32.8bn the week before. This is a small sell vs 6 weeks of buying.
• The volume now is still chasing momentum. CATL the big buy, and less passive-feeling than last week.

• Avianca reached $1,200m EBITDAR in 2023, ahead of our forecast of $1,162m, already exceeding its 2024 target.
• The company does not provide guidance on 2024 profitability but we publish our quarterly bridge analysis and map prospects versus LATAM Group guidance.
• We forecast 10% yoy EBITDAR growth in 2024 on 20% capacity growth, which compares to our forecast of 15% EBITDAR growth at LATAM, which is growing less aggressively.

• Avianca reached $1,200m EBITDAR in 2023, ahead of our forecast of $1,162m, already exceeding its 2024 target.
• The company does not provide guidance on 2024 profitability but we publish our quarterly bridge analysis and map prospects versus LATAM Group guidance.
• We forecast 10% yoy EBITDAR growth in 2024 on 20% capacity growth, which compares to our forecast of 15% EBITDAR growth at LATAM, which is growing less aggressively.

• JAL finishing FY24 strongly with another guidance upgrade – upgraded FY26 targets more logical in light of existing ANA targets
• ​Demand momentum particularly helpful as wages rise across Japan and ​cost control to remain impressive over FY25-FY26 as LCC growth set to dilute FSC inflation
• ​Detailed analysis of JAL’s widening margin gap to ANA suggests revenue solution required – momentum helpful and needs to be watched carefully

• Our estimations for FY 2023 annual revenue range at around £69.88 million and for 2024 at around £73.38 million.
• The company’s annual revenue reached £69.19 million in 2022 compared to £61.25 million in 2021, post- ing an increase by 12.96%.
• Christie Group’s operating profit for FY 2022 was £5.45 million, increased by 4.96% compared to £5.19 million for the corresponding period of 2021.

• Our estimations for FY 2024 annual revenue range at around £77.28 million and for 2025 at around £88.31 million.
• The company’s annual revenue reached £69.72 million in 2023 compared to £61.10 million in 2022, post- ing an increase by 14.12%.
• Northern Bear gross profit for FY 2023 was £13.94 million, increased by 11.87% compared to £12.46 million for the corresponding period of 2022.

• Wilh. Wilhelmsen has been a successful long-term investment in the shipping industry with an annual return of 13.3% since 2000
• The company operates in the stable roll-on roll-off (RoRo) market, leading to an average return on equity of 12.3%
• WWI is comprised of various segments including Wilhelmsen Maritime Service and investments in Wallenius Wilhelmsen and Hyundai Glovis, with a history dating back to 1861 and a recent focus on RoRo ships.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Yellow Corp. filed for Chapter 11 bankruptcy in August 2023 after a walkout by the Teamster union, leading to no workers or customers.
• The company is now pursuing Chapter 11 liquidation with potential for significant returns for investors.
• Recent progress in the case has de-risked the story, with the debtor’s financial advisor expecting a recovery to the equity with values ranging from $3.26 to $29.72.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• ZTO reported C4Q23 top-line, GAAP EBIT, and non-GAAP net income (2.2%), (3.8%), and in-line vs. cons., respectively;
• There are two concurrent trends in the last-mile market: (1) improved service quality, and (2) smaller parcel sizes. Both are favorable to ZTO, in our view;
• ZTO announced new shareholder return plans, which we estimate could return US$ 1.4bn to investors in 2024 for a 7.7% yield;

• JAL finishing FY24 strongly with another guidance upgrade – upgraded FY26 targets more logical in light of existing ANA targets
• ​Demand momentum particularly helpful as wages rise across Japan and ​cost control to remain impressive over FY25-FY26 as LCC growth set to dilute FSC inflation
• ​Detailed analysis of JAL’s widening margin gap to ANA suggests revenue solution required – momentum helpful and needs to be watched carefully

• Our estimations for FY 2023 annual revenue range at around £69.88 million and for 2024 at around £73.38 million.
• The company’s annual revenue reached £69.19 million in 2022 compared to £61.25 million in 2021, post- ing an increase by 12.96%.
• Christie Group’s operating profit for FY 2022 was £5.45 million, increased by 4.96% compared to £5.19 million for the corresponding period of 2021.

• Our estimations for FY 2024 annual revenue range at around £77.28 million and for 2025 at around £88.31 million.
• The company’s annual revenue reached £69.72 million in 2023 compared to £61.10 million in 2022, post- ing an increase by 14.12%.
• Northern Bear gross profit for FY 2023 was £13.94 million, increased by 11.87% compared to £12.46 million for the corresponding period of 2022.

• Wilh. Wilhelmsen has been a successful long-term investment in the shipping industry with an annual return of 13.3% since 2000
• The company operates in the stable roll-on roll-off (RoRo) market, leading to an average return on equity of 12.3%
• WWI is comprised of various segments including Wilhelmsen Maritime Service and investments in Wallenius Wilhelmsen and Hyundai Glovis, with a history dating back to 1861 and a recent focus on RoRo ships.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Yellow Corp. filed for Chapter 11 bankruptcy in August 2023 after a walkout by the Teamster union, leading to no workers or customers.
• The company is now pursuing Chapter 11 liquidation with potential for significant returns for investors.
• Recent progress in the case has de-risked the story, with the debtor’s financial advisor expecting a recovery to the equity with values ranging from $3.26 to $29.72.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• ZTO reported C4Q23 top-line, GAAP EBIT, and non-GAAP net income (2.2%), (3.8%), and in-line vs. cons., respectively;
• There are two concurrent trends in the last-mile market: (1) improved service quality, and (2) smaller parcel sizes. Both are favorable to ZTO, in our view;
• ZTO announced new shareholder return plans, which we estimate could return US$ 1.4bn to investors in 2024 for a 7.7% yield;

• Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
• Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
• The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.

• AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
• The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
• The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high. 

• GXO Logistics (GXO US) offers 605p for Wincanton PLC (WIN LN), in a strategic move worth a 104% premium, 8.6x EV/25e EBITDA, 18.2 Fwd P/E (IBES), via scheme with 34% irrevocables.
• Regulators are used to monitoring this industry, gradually consolidating on a worldwide scale as a result of cost pressures. GXO has smaller scale in the UK. 
• I don’t think antitrust issues are going to prevent this transaction. Interloper risk is minimal (DHL, Deutsche Post would have regulatory issues). Spread is 1.00%/7.14% (gross/annualised). Long.

• As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
• In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
• Organo Corporation announced revisions to its full-year forecast for FY03/24.

• Porvair plc is a specialist filtration, laboratory and environmental technology company.
• The Company’s operating divisions include Aerospace & Industrial, Laboratory, and Metal Melt Quality.
• The Aerospace & Industrial division designs and manufactures a broad range of specialist filtration equipment for applica- tion in aerospace and industrial applications. 

• After the close Wednesday, Steelcase reported 4QFY24 non-GAAP adjusted EPS of $0.23, ahead of our $0.22 estimate and consensus of $0.21.
• 4QFY24 global revenue was $775 million, modestly missing our estimate by ~$9 million.
• FY24 non-GAAP adjusted EPS was $0.93, up from $0.56 in FY23, and revenue was $3.16 billion, down 2.6%.

Braemar’s FY24 trading update was in line with expectations, with revenues of c £150m and underlying operating profit of c £18m. Underlying operations continue to expand and diversify and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying estimates for FY24 and FY25, but edge down the valuation based on the lower FY24 dividend expectations. The revised valuation offers nearly 100% upside.

• Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
• Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
• The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.

• AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
• The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
• The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high. 

• GXO Logistics (GXO US) offers 605p for Wincanton PLC (WIN LN), in a strategic move worth a 104% premium, 8.6x EV/25e EBITDA, 18.2 Fwd P/E (IBES), via scheme with 34% irrevocables.
• Regulators are used to monitoring this industry, gradually consolidating on a worldwide scale as a result of cost pressures. GXO has smaller scale in the UK. 
• I don’t think antitrust issues are going to prevent this transaction. Interloper risk is minimal (DHL, Deutsche Post would have regulatory issues). Spread is 1.00%/7.14% (gross/annualised). Long.

• As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
• In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
• Organo Corporation announced revisions to its full-year forecast for FY03/24.

• Porvair plc is a specialist filtration, laboratory and environmental technology company.
• The Company’s operating divisions include Aerospace & Industrial, Laboratory, and Metal Melt Quality.
• The Aerospace & Industrial division designs and manufactures a broad range of specialist filtration equipment for applica- tion in aerospace and industrial applications. 

• After the close Wednesday, Steelcase reported 4QFY24 non-GAAP adjusted EPS of $0.23, ahead of our $0.22 estimate and consensus of $0.21.
• 4QFY24 global revenue was $775 million, modestly missing our estimate by ~$9 million.
• FY24 non-GAAP adjusted EPS was $0.93, up from $0.56 in FY23, and revenue was $3.16 billion, down 2.6%.

Braemar’s FY24 trading update was in line with expectations, with revenues of c £150m and underlying operating profit of c £18m. Underlying operations continue to expand and diversify and the company remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying estimates for FY24 and FY25, but edge down the valuation based on the lower FY24 dividend expectations. The revised valuation offers nearly 100% upside.