Industrials

• Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
• Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
• NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

• Copart, Inc, a leading provider of online vehicle auctions, recently disclosed its second-quarter financial results for the fiscal year 2024.
• The recorded statements offered valuable insights into the company’s operational and financial advancements during the period.
• In the insurance business, the company reported profitable growth despite slight disturbances in the comparison metrics, primarily caused by significant catastrophic events in the previous year, including Hurricane Ian.

• The fourth quarter results from TRS were not up to our expectations after a recovery in packaging was subdued by an unexpected significant decline in the specialty business
• The specialty business has been a source of sales growth for the past nearly three years without any sign of slowing down until Q4. 
• TRS reported fourth quarter sales of $209.6 million compared to our forecast of $247.4 million. The biggest delta was from specialty where sales missed our estimate by $26 million

• Quanta Services, Inc., a provider of specialized contracting services, reported fourth-quarter and full-year results for 2023 reflecting double-digit growth in revenues and earnings, pointing to robust demand and solid execution.
• Total year-end backlog was $30.1 billion, indicative of the company’s enduring client relationships and momentum entering 2024.
• Record revenue was achieved 6 out of the last 7 years along with 6 consecutive years of record-adjusted EBITDA and 7 years of continuous record-adjusted earnings per share, aided by Quanta’s operational and financial platform backed by over 50,000 dedicated employees.

• Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
• Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
• NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

• Copart, Inc, a leading provider of online vehicle auctions, recently disclosed its second-quarter financial results for the fiscal year 2024.
• The recorded statements offered valuable insights into the company’s operational and financial advancements during the period.
• In the insurance business, the company reported profitable growth despite slight disturbances in the comparison metrics, primarily caused by significant catastrophic events in the previous year, including Hurricane Ian.

• The fourth quarter results from TRS were not up to our expectations after a recovery in packaging was subdued by an unexpected significant decline in the specialty business
• The specialty business has been a source of sales growth for the past nearly three years without any sign of slowing down until Q4. 
• TRS reported fourth quarter sales of $209.6 million compared to our forecast of $247.4 million. The biggest delta was from specialty where sales missed our estimate by $26 million

• Quanta Services, Inc., a provider of specialized contracting services, reported fourth-quarter and full-year results for 2023 reflecting double-digit growth in revenues and earnings, pointing to robust demand and solid execution.
• Total year-end backlog was $30.1 billion, indicative of the company’s enduring client relationships and momentum entering 2024.
• Record revenue was achieved 6 out of the last 7 years along with 6 consecutive years of record-adjusted EBITDA and 7 years of continuous record-adjusted earnings per share, aided by Quanta’s operational and financial platform backed by over 50,000 dedicated employees.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in January and February 2024.
• We provide a list of 22 stocks in the Korean stock market that have announced share buyback programs in the past two months.
• Major companies that have announced share buybacks in Korea in the past two months include Shinhan Financial, Hyundai Mobis, and Samick Musical Instruments. All three have outperformed the market. 

• Teikoku, a stable disaster equipment leader, is undervalued due to excessive cash and cross-holdings.  
• Regulatory pressure, industry trends, and potential Hulic asset sales create an opportunity to unlock hidden value.
• Despite fair current pricing, potential share repurchases and improved capital allocation offer up to 40% upside.

• Grab Holdings (GRAB US) recently posted another set of positive results, with another quarter of positive adjusted EBITDA. We conducted a follow-up call to explore the outlook for 2024. 
• The company announced both a US$500m Buyback and the potential for improving margins in its deliveries business plus several new initiatives to drive growth in 2024 and beyond. 
• Grab Financial continue to grow its loan book through lending to drivers and merchants, which should help to improve margins plus its high-margin advertising income is becoming increasingly important.

• Pacific Basin Shipping (2343 HK) has a weaker-than-expected 2H23, but we are glad that its unit cost has come down. Also, FY24F and FY25F should be years of recovery.
• Current spot rates as indicated by BDI are significantly higher than 1H23 and YTD average, suggesting an upside for realised rates in the rest of this year. 
• Supply pressure will be alleviated by the issues at Panama and Suez Canals, while China may be a factor in YoY demand improvement. Net gearing of 2% is light. 

• Industry ASP declined -15.5% Y/Y in January to just 8.36 CNY, a record low
• Despite strong volume (+85% Y/Y) some firms have likely turned unprofitable
• International parcel growth strong; SF still avoiding worst of domestic price wars

• Verisk experienced a successful 2023 with strategic, organizational, and cultural changes, outstanding financial performance, and substantial value creation for clients and shareholders.
• The company delivered 8.7% organic constant currency revenue growth in 2023, the highest rate since its initial public offering in 2009.
• They exceeded the expectations set during the Investor Day in March.

• Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.
• IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.
• ​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in January and February 2024.
• We provide a list of 22 stocks in the Korean stock market that have announced share buyback programs in the past two months.
• Major companies that have announced share buybacks in Korea in the past two months include Shinhan Financial, Hyundai Mobis, and Samick Musical Instruments. All three have outperformed the market. 

• Teikoku, a stable disaster equipment leader, is undervalued due to excessive cash and cross-holdings.  
• Regulatory pressure, industry trends, and potential Hulic asset sales create an opportunity to unlock hidden value.
• Despite fair current pricing, potential share repurchases and improved capital allocation offer up to 40% upside.

• Grab Holdings (GRAB US) recently posted another set of positive results, with another quarter of positive adjusted EBITDA. We conducted a follow-up call to explore the outlook for 2024. 
• The company announced both a US$500m Buyback and the potential for improving margins in its deliveries business plus several new initiatives to drive growth in 2024 and beyond. 
• Grab Financial continue to grow its loan book through lending to drivers and merchants, which should help to improve margins plus its high-margin advertising income is becoming increasingly important.

• Pacific Basin Shipping (2343 HK) has a weaker-than-expected 2H23, but we are glad that its unit cost has come down. Also, FY24F and FY25F should be years of recovery.
• Current spot rates as indicated by BDI are significantly higher than 1H23 and YTD average, suggesting an upside for realised rates in the rest of this year. 
• Supply pressure will be alleviated by the issues at Panama and Suez Canals, while China may be a factor in YoY demand improvement. Net gearing of 2% is light. 

• Industry ASP declined -15.5% Y/Y in January to just 8.36 CNY, a record low
• Despite strong volume (+85% Y/Y) some firms have likely turned unprofitable
• International parcel growth strong; SF still avoiding worst of domestic price wars

• Verisk experienced a successful 2023 with strategic, organizational, and cultural changes, outstanding financial performance, and substantial value creation for clients and shareholders.
• The company delivered 8.7% organic constant currency revenue growth in 2023, the highest rate since its initial public offering in 2009.
• They exceeded the expectations set during the Investor Day in March.

• Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.
• IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.
• ​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.

• Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
• This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
• The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.

• Back on the 19th Feb, employment and disability services play APM Human Services Internation (APM AU) rejected PE-outfit CVC Asia Pacific’s A$1.60 proposal, a 93% premium to undisturbed.
• Undeterred, CVC has returned with A$2.00/share indicative Offer, by way of a Scheme, a 141% premium to undisturbed; yet a 44% discount to APM’s November 2021 IPO price of A$3.55/share.
• APM has determined it will engage and provide CVC with a four-week period of exclusivity. 

• Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
• China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
• Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.

• Tokyo Metro (TKYMETRO JP)’s shareholders, the Japanese and Tokyo Metropolitan Governments, could look to raise up to US$2bn by selling half of their stake via an IPO.
• Tokyo Metro is one of the two metro network operators in the Tokyo region. It operates nine subway lines.
• In this note, we take an early look at the possible listing.

• APM Human Services Internation (APM AU)’s revised non-binding proposal from CVC is A$2.00 per share, a 141.0% premium to the undisturbed price of A$0.83 per share (16 February).
• CVC has been granted a four-week exclusivity period to 27 March. The proposal allows shareholders to receive scrip in an unlisted HoldCo. The Board will recommend a binding proposal.
• While not a knockout offer, a concentrated and seemingly supportive shareholder register facilitates a binding proposal. At the last close, the gross spread was 25.0%.  

• Yesterday morning, Qantm Intellectual Property (QIP AU) announced it had received a non-binding indicative proposal from UK-based Rouse International Holdings Limited.
• In what only can be described as a (s)crappy announcement, no price was disclosed, nor the due diligence period. Not even if this was a cash/scrip Offer.
• In any event, QANTM considers Rouse’s ops to be highly complementary in both geographic and service lines to QANTM. QANTM shares gained 17% yesterday to close at A$1.34.

• A Profit-Oriented State Owned Enterprise that is walking the walk.
• Management incentives are aligned with shareholders, a rarity in China.
• Plenty of upside remains despite the market outperformance to date

• 2Q FY24/5 results showed a steady increase in orders and earnings, following the 1Q results.
• The company has been securing orders for disaster prevention and mitigation, defense civil engineering, and other priority areas.
• Given 1H results and an order backlog of ¥12.48 bn as of the end of November, SIR believes the Company’s chances of achieving its targets have improved considerably.

• Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
• This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
• The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.

• Back on the 19th Feb, employment and disability services play APM Human Services Internation (APM AU) rejected PE-outfit CVC Asia Pacific’s A$1.60 proposal, a 93% premium to undisturbed.
• Undeterred, CVC has returned with A$2.00/share indicative Offer, by way of a Scheme, a 141% premium to undisturbed; yet a 44% discount to APM’s November 2021 IPO price of A$3.55/share.
• APM has determined it will engage and provide CVC with a four-week period of exclusivity. 

• Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
• China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
• Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.

• Tokyo Metro (TKYMETRO JP)’s shareholders, the Japanese and Tokyo Metropolitan Governments, could look to raise up to US$2bn by selling half of their stake via an IPO.
• Tokyo Metro is one of the two metro network operators in the Tokyo region. It operates nine subway lines.
• In this note, we take an early look at the possible listing.

• APM Human Services Internation (APM AU)’s revised non-binding proposal from CVC is A$2.00 per share, a 141.0% premium to the undisturbed price of A$0.83 per share (16 February).
• CVC has been granted a four-week exclusivity period to 27 March. The proposal allows shareholders to receive scrip in an unlisted HoldCo. The Board will recommend a binding proposal.
• While not a knockout offer, a concentrated and seemingly supportive shareholder register facilitates a binding proposal. At the last close, the gross spread was 25.0%.  

• Yesterday morning, Qantm Intellectual Property (QIP AU) announced it had received a non-binding indicative proposal from UK-based Rouse International Holdings Limited.
• In what only can be described as a (s)crappy announcement, no price was disclosed, nor the due diligence period. Not even if this was a cash/scrip Offer.
• In any event, QANTM considers Rouse’s ops to be highly complementary in both geographic and service lines to QANTM. QANTM shares gained 17% yesterday to close at A$1.34.

• A Profit-Oriented State Owned Enterprise that is walking the walk.
• Management incentives are aligned with shareholders, a rarity in China.
• Plenty of upside remains despite the market outperformance to date

• 2Q FY24/5 results showed a steady increase in orders and earnings, following the 1Q results.
• The company has been securing orders for disaster prevention and mitigation, defense civil engineering, and other priority areas.
• Given 1H results and an order backlog of ¥12.48 bn as of the end of November, SIR believes the Company’s chances of achieving its targets have improved considerably.

• After an extension due to a European Foreign Subsidies Review filing, and a small ‘accident’ regarding the earnings release, we have a deal. 
• The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.
• Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.

• The schedule includes submitting the transfer listing application post-EGM on March 26th. KRX approval expected in 4-6 weeks due to Ecopro BM’s financial soundness. KOSPI listing follows in 2-3 weeks.
• As for KOSDAQ 150 ad-hoc change, it will be replaced with the top reserved issue. The anticipated timing for this ad-hoc change is around mid or late May.
• Following Feb 7 disclosure, stock surged over 10% in 2 days. Precedents show rallies pre-shareholder meetings, but KOSPI listing brings corrections. Today’s resolution could boost Ecopro BM short term.

• Outsourcing Inc (2427 JP) announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).
• Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.
• The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.

• Ecopro BM (247540 KS)‘s Board has approved the delisting of the stock from the KOSDAQ market and to list on the KOSPI market. The shareholder meeting is on 26 March. 
• Historically, the KRX has taken an average of 64 days from application to approve the listing to transfer from the KOSDAQ market to the KOSPI market.
• Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index on its last trading day and inclusion in the KOSPI 200 Index could take place in September.

• After the market close on 27 February, Ecopro BM (247540 KS) announced that it will switch its listing from KOSDAQ to KOSPI. 
• Ecopro BM currently has a market cap of 23.1 trillion won. It is the largest stock in KOSDAQ right now and it would be the 17th largest stock in KOSPI.
• Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM. It is trading at P/E of 203x in 2024 and 71x in 2025.

• We publish a deep dive on historical margin management at Cathay Pacific following Bloomberg reports that Air China is considering raising its 29.99% stake.
• We see Cathay’s consistent underperformance of the global industry as due to structural disadvantages competing against lower cost competitors without the benefit of attractive joint ventures or M&A.
• Our deep dive comparing margin generation to ten major global peers highlights weak pricing power without sufficient offset from staff cost/other cost efficiencies as the key problem.

• MTAR Technologies (MTARTECH IN)  is a precision engineered company that caters to customers in clean energy, Space, Defense sectors, etc. 
• The company has done well over the last few years in terms of securing business, however there are concerns on the margins end, working capital and cash generation. 
• There also exists a high business risk in terms of customer concentration since more than 75% of the revenues (F23) come from one single entity.

• Comfortdelgro Corp (CD SP) share price has underperformed its tourism related transport operator peers.
• Key drivers are still strong, including the expected influx of Chinese tourists from visa-free travel arrangements.
• Valuation is still compelling, and it is not too late to own it.

• Speculations on Air China Ltd (753 HK) seeking control of Cathay Pacific (293 HK) reappeared recently. We think a change in CX’s ownership is just a matter of time.
• CX has been a more important profit contributor to Air China after the pandemic, and depends on pricing, Air China is expected to benefit from such acquisition.
• Both are trading on 0.5SD below their 5-year P/B average and we prefer CX in the short term, but Air China looks to be a better long-term choice. 

• Generators and machine producer, Illinois Tool Works Inc.
• (ITW) has reported a modest growth amidst the unique operational challenges faced in the fourth quarter of 2023.
• In particular, the company confronted reduced demand for capital expenditure (CapEx), lean customer inventories and a strike within the automotive industry.

• After an extension due to a European Foreign Subsidies Review filing, and a small ‘accident’ regarding the earnings release, we have a deal. 
• The earnings release itself seemed more innocuous than articles and rumour suggested show the causes of impairments and so it seemed like there was little cause to walk/declare MAC.
• Now it will be done in 20 days. I still think this is cheeky, opportunistic, and low, and it is up to the float to decide what to do.

• The schedule includes submitting the transfer listing application post-EGM on March 26th. KRX approval expected in 4-6 weeks due to Ecopro BM’s financial soundness. KOSPI listing follows in 2-3 weeks.
• As for KOSDAQ 150 ad-hoc change, it will be replaced with the top reserved issue. The anticipated timing for this ad-hoc change is around mid or late May.
• Following Feb 7 disclosure, stock surged over 10% in 2 days. Precedents show rallies pre-shareholder meetings, but KOSPI listing brings corrections. Today’s resolution could boost Ecopro BM short term.

• Outsourcing Inc (2427 JP) announced that the pre-condition was satisfied, and Bain’s tender offer remains unchanged at JPY1,755 per share, a 52.1% premium to the undisturbed (8 December).
• Shareholders will breathe a sigh of relief as the weak 4Q and significant impairments have raised concerns that Bain would cut its offer or walk away.
• The offer attractiveness has increased partly due to lower consensus. At the last close and for a 3 April payment, the gross/annualised spread is 2.0%/22.8%.

• Ecopro BM (247540 KS)‘s Board has approved the delisting of the stock from the KOSDAQ market and to list on the KOSPI market. The shareholder meeting is on 26 March. 
• Historically, the KRX has taken an average of 64 days from application to approve the listing to transfer from the KOSDAQ market to the KOSPI market.
• Ecopro BM (247540 KS) will be deleted from the KOSDAQ 150 Index on its last trading day and inclusion in the KOSPI 200 Index could take place in September.

• After the market close on 27 February, Ecopro BM (247540 KS) announced that it will switch its listing from KOSDAQ to KOSPI. 
• Ecopro BM currently has a market cap of 23.1 trillion won. It is the largest stock in KOSDAQ right now and it would be the 17th largest stock in KOSPI.
• Lofty valuation is one of the main reasons why we continue to be bearish on Ecopro BM. It is trading at P/E of 203x in 2024 and 71x in 2025.

• We publish a deep dive on historical margin management at Cathay Pacific following Bloomberg reports that Air China is considering raising its 29.99% stake.
• We see Cathay’s consistent underperformance of the global industry as due to structural disadvantages competing against lower cost competitors without the benefit of attractive joint ventures or M&A.
• Our deep dive comparing margin generation to ten major global peers highlights weak pricing power without sufficient offset from staff cost/other cost efficiencies as the key problem.

• MTAR Technologies (MTARTECH IN)  is a precision engineered company that caters to customers in clean energy, Space, Defense sectors, etc. 
• The company has done well over the last few years in terms of securing business, however there are concerns on the margins end, working capital and cash generation. 
• There also exists a high business risk in terms of customer concentration since more than 75% of the revenues (F23) come from one single entity.

• Comfortdelgro Corp (CD SP) share price has underperformed its tourism related transport operator peers.
• Key drivers are still strong, including the expected influx of Chinese tourists from visa-free travel arrangements.
• Valuation is still compelling, and it is not too late to own it.

• Speculations on Air China Ltd (753 HK) seeking control of Cathay Pacific (293 HK) reappeared recently. We think a change in CX’s ownership is just a matter of time.
• CX has been a more important profit contributor to Air China after the pandemic, and depends on pricing, Air China is expected to benefit from such acquisition.
• Both are trading on 0.5SD below their 5-year P/B average and we prefer CX in the short term, but Air China looks to be a better long-term choice. 

• Generators and machine producer, Illinois Tool Works Inc.
• (ITW) has reported a modest growth amidst the unique operational challenges faced in the fourth quarter of 2023.
• In particular, the company confronted reduced demand for capital expenditure (CapEx), lean customer inventories and a strike within the automotive industry.

• Keisei Electric (9009 JP) has been an outperformer since activist fund Palliser Capital called on the company sell some Oriental Land (4661 JP) shares. It has now announced another buyback.
• Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Grab Holdings reported nothing short of an impressive set of results for 4Q2023, booking another positive adjusted EBITDA but also an actual net profit and positive adjusted cash flow. 
• The company saw its mobility GMV come in above pre-COVID levels and deliveries GMV growth reaccelerated, while also reaching positive adjusted EBITDA for a second quarter.
• Grab aims to deepen its engagement with users through affordable and premium offerings and a laddered pricing approach, with additional focus on financial services and advertising to come in 2024.

• The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
• We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
• On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.

• The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
• ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
• ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.  

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the March 2024 index rebal event.
• I see one change for the F100 index and two other changes for the F250 index. There could be more as there are many names close to the border.
• There are also a couple of potential intra-review changes expected in the next few weeks for LXI REIT (LXI LN) and Network International Holdings (NETW LN) 

Key points

• Alight has experienced strong organic revenue growth through recurring revenue contracts and acquisitions
• Concerns have been raised about stagnant gross margins, adjusted EBITDA margins, management turnover, and stakeholder selling
• Accounting validation issues further complicate the company’s financial standing and could potentially impact the stock price negatively

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.

• Keisei Electric (9009 JP) has been an outperformer since activist fund Palliser Capital called on the company sell some Oriental Land (4661 JP) shares. It has now announced another buyback.
• Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Grab Holdings reported nothing short of an impressive set of results for 4Q2023, booking another positive adjusted EBITDA but also an actual net profit and positive adjusted cash flow. 
• The company saw its mobility GMV come in above pre-COVID levels and deliveries GMV growth reaccelerated, while also reaching positive adjusted EBITDA for a second quarter.
• Grab aims to deepen its engagement with users through affordable and premium offerings and a laddered pricing approach, with additional focus on financial services and advertising to come in 2024.

• The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
• We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
• On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.

• The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
• ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
• ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.  

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the March 2024 index rebal event.
• I see one change for the F100 index and two other changes for the F250 index. There could be more as there are many names close to the border.
• There are also a couple of potential intra-review changes expected in the next few weeks for LXI REIT (LXI LN) and Network International Holdings (NETW LN) 

Key points

• Alight has experienced strong organic revenue growth through recurring revenue contracts and acquisitions
• Concerns have been raised about stagnant gross margins, adjusted EBITDA margins, management turnover, and stakeholder selling
• Accounting validation issues further complicate the company’s financial standing and could potentially impact the stock price negatively

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.