Category

Utilities Sector

Aug 10
0

Daily Brief Utilities: Guangdong Investment and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • S&P Global Water Index: Market Consultation Driven Potential Changes

S&P Global Water Index: Market Consultation Driven Potential Changes

By Brian Freitas

  • S&P DJI commenced a market consultation for the S&P Global Water Index on 29 July and that could lead to quite a few changes to the index in October.
  • We currently see 14 deletions and 10 inclusions for the index in October. Most of the changes will have a high impact from passive fund trading.
  • There could be more changes in April 2023 once stocks listed in Emerging Markets are included in the index.

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Aug 05
0

Daily Brief Utilities: Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Share Buybacks Exceed BOJ’s ETF Purchases, but BOJ’s Presence Is Significant in Another Aspect

Share Buybacks Exceed BOJ’s ETF Purchases, but BOJ’s Presence Is Significant in Another Aspect

By Aki Matsumoto

  • Of course, When the BOJ’s ETF purchases were active, there were concerns about their impact on stock price formation, but now the impact is much smaller.
  • However, the BOJ has a presence in listed companies as a silent major shareholder, it is highly questionable whether its voting rights are being properly exercised.
  • While the silent major shareholder exists, overseas investors have played major role in enhancing corporate governance. In addition to cross-shareholding structures, they also have to contend with the silent shareholder.

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Aug 03
0

Daily Brief Utilities: Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Isn’t Performance of Japanese Stocks, After All, the Reason for Declining % Individual Shareholders?

Isn’t Performance of Japanese Stocks, After All, the Reason for Declining % Individual Shareholders?

By Aki Matsumoto

  • The Nikkei suggests that the aging population may be the cause. However, performance is assumed to be factor, even when young people open accounts, they investment mostly in foreign stocks.
  • In the end, what matters most is that the listed company presents growth expectations. This is what leads to stock performance.
  • While tax and other support are one of the factors that motivate individuals to invest, if companies aren’t attractive for investment, their investments are likely to be in foreign stocks.

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Aug 01
0

Daily Brief Utilities: Genex Power Ltd, China Three Gorges Renewables, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Merger Arb Mondays (01 Aug) – Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation
  • China Utilities: Long China Three Gorges Renewables (600905 CH), Short Huaneng Power Int (600011 CH)
  • It Is Very Important to Review ESG Investing Before the Risks Become Evident

Merger Arb Mondays (01 Aug) – Genex, Yashili, Link Admin, VNET, Ramsay, Alliance Aviation

By Arun George

China Utilities: Long China Three Gorges Renewables (600905 CH), Short Huaneng Power Int (600011 CH)

By Osbert Tang, CFA

  • A “Long China Three Gorges Renewables (600905 CH), short Huaneng Power Intl Inc-A (600011 CH)” pair trade should generate good return in China’s utilities sector given the current industry dynamics.
  • The key supporting factors are: CTGR has pure exposure to renewable, faster capacity growth and a stronger balance sheet. They should underpin better earnings quality and outlook relative to HPI.
  • CTGR trades on higher PER and P/B multiples, but these should not be hurdles as they are just reflection of more promising prospects. We expect CTGR’s YTD outperformance to continue.

It Is Very Important to Review ESG Investing Before the Risks Become Evident

By Aki Matsumoto

  • The reason for the limited increase in GPIF’s ESG investments must be thought of separately in terms of GPIF-specific factors and the overall trend in ESG investing.
  • Because investors consider which combination of managers in their asset allocation will work best for the overall portfolio, there are factors that cannot be determined by individual ESG investing alone.
  • ESG investing has been expanding, but with so many ESG indices and vendors in disarray, some problems are pointed out. It’s important to review the effectiveness of the ESG indices.

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Jul 31
0

Daily Brief Utilities: VA Tech Wabag and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • VA Tech Wabag |a Meta Analysis

VA Tech Wabag |a Meta Analysis

By Gauri Anand

  • Leading water treatment company going through its crucible – negative sentiment, low expectation thus low valuation 
  • Mean reversion a high possibility, tailwinds for the sector getting strong 
  • Opportunities galore – new energy, general, PLI, non-PLI Capex, sewage water treatment, upgradation and desalination 

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Jul 29
0

Daily Brief Utilities: Adani Total Gas, Manila Electric Company and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • NIFTY Quiddity Leaderboard Sep 2022: Adani Total Gas Could Be a Positive Surprise
  • Manila Electric Block – Selldown by One of the Largest Shareholders

NIFTY Quiddity Leaderboard Sep 2022: Adani Total Gas Could Be a Positive Surprise

By Janaghan Jeyakumar, CFA

  • The six-month reference period for NIFTY September 2022 Rebalance ends tomorrow.
  • In this insight, we take a look at the names that could become ADDs/DELs for the NIFTY 50, 100, and 500 Indices in the September 2022 Rebalance.
  • In addition, I have discussed some trading opportunities with interesting potential index flow dynamics.

Manila Electric Block – Selldown by One of the Largest Shareholders

By Sumeet Singh

  • JG Summit Holdings (JGS PM) aims to raise around US$185m via selling 2.5% of Manila Electric Company (MER PM) (Meralco) via a block trade.
  • This appears to be the first selldown by JG Summit and doesn’t appear to have been very well flagged either.
  • In this note, we will talk about the deal dynamics and  run the deal through our ECM framework.

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Jul 26
0

Daily Brief Utilities: Genex Power Ltd and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Genex: Atlassian’s Farquhar Makes An Offer
  • Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

Genex: Atlassian’s Farquhar Makes An Offer

By David Blennerhassett

  • Renewable energy play Genex Power Ltd (GNX AU) has announced a non-binding indicative proposal from Atlassian’s Scott Farquhar and Stonepeak, by way of a Scheme, at A$0.23/share. 
  • That’s around a 64% premium. Farquhar holds a 19.9% stake. 
  • Farquhar, along with Atlassian co-founder Mike Cannon-Brookes, backed Genex capital raising in March last year.

Genex’s Offer of A$0.23 from Skip Capital Likely Won’t Cut It

By Arun George

  • Genex Power Ltd (GNX AU) shares rose 44% on the back of an A$0.23 per share offer from Skip Capital and Stonepeak. Skip also increased its stake to 19.99%.
  • At first glance, the offer looks generous in comparison to peer multiples and recent share prices. However, the offer is opportunistic partly due to Genex’s 500MW pipeline of projects. 
  • Benchmarking the precedent transaction multiples suggests that Genex’s existing portfolio is worth at least A$0.27 per share. The Board should engage for a higher price. 

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Jul 25
0

Daily Brief Utilities: China Longyuan Power and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • China Longyuan (916 HK): A De-Rating Too Excessive

China Longyuan (916 HK): A De-Rating Too Excessive

By Osbert Tang, CFA

  • Share price of China Longyuan Power (916 HK) has been under pressure over the last two weeks due to concern on future offshore wind power project return.
  • We believe the low tariff of Rmb0.19/kWh won by a Huaneng Power Group consortium in Fujian is more an exceptional case and should not be taken as a new normal.
  • China Longyuan’s growth has been well secured by its project pipeline as well as 21GW potential injection from parent. This round of de-rating is just too excessive. 

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Jul 20
0

Daily Brief Utilities: Electricite De France Sa and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • République Française/​EDF: 53% Premium

République Française/​EDF: 53% Premium

By Jesus Rodriguez Aguilar

  • The listing of EDF’s shares is resumed with the announcement of a minorities buyout offer at €12/share, a 53% premium to the undisturbed share price.
  • It is a generous offer that also aims to avoid the outcry of EDF’s employees (c. 1% stake). Interloper risk is nil. Delisting is expected by the end of October.
  • Gross spread is 2.13% which could lead to an interesting c. 8% estimated annual return if settlement takes place by the end of October. Long and tender.

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Jul 16
0

Daily Brief Utilities: AGL Energy Ltd and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • AGL – Down, Not Out. Tight Coal Vs FIDs. And MCB Waiting

AGL – Down, Not Out. Tight Coal Vs FIDs. And MCB Waiting

By Travis Lundy

  • In the last six weeks, AGL Energy Ltd (AGL AU) has fallen and is now at the low end of its post-Brookfield bid trading range. Now below the A$8.25 bid.
  • AGL has one generator down – the Loy Yang A Unit 2 – which will be back in late Sep. Guidance is left… unguided. There will be a related loss.
  • In the meantime, the rest of the producing assets have probably been having a field day. But given shareholder structure, we’re still in limbo.

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