Category

Utilities Sector

Jun 12
0

Daily Brief Utilities: Naturgy Energy Group SA and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • It’s a No Deal, But…

It’s a No Deal, But…

By Jesus Rodriguez Aguilar

  • Abu Dhabi National Energy (TAQA UH) has unexpectedly withdrawn from negotiations to launch a takeover bid for Naturgy Energy Group SA (NTGY SM) with CriteriaCaixa.
  • Criteria may continue to explore other options. CriteriaCaixa and IFM may reconcile. IFM could offer a solution for the exit of CVC and GIP, could potentially increase its stake.
  • A joint offer from CriteriaCaixa and IFM could well happen. At the current price, I would be long Naturgy, plus one gets paid to wait. Dividend yield is 6.6%.

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Jun 10
0

Daily Brief Utilities: Genex Power Ltd and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Genex Power (GNX AU): Scheme Vote on 16 July as Skip Remains Silent

Genex Power (GNX AU): Scheme Vote on 16 July as Skip Remains Silent

By Arun George

  • The Genex Power Ltd (GNX AU) IE considers Electric Power Development C (9513 JP)’s scheme (A$0.275) and off-market takeover offer (A$0.270) fair and reasonable. 
  • The offer is conditional on FIRB and shareholder approval. Skip Capital, which can block the scheme, has not declared its intention regarding J-Power’s offer or launched a competing offer.
  • Skip’s silence suggests a greater probability of accepting the scheme offer. If the scheme fails, the takeover offer, due to its structure and price, caps the downside.

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Jun 04
0

Daily Brief Utilities: Korea Gas and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Korea Gas Corp: Drill Baby Drill

Korea Gas Corp: Drill Baby Drill

By Douglas Kim

  • On 3 June, the shares of Korea Gas jumped limit up 30% to 38,700 won on huge volume (13.4 million), which was 37x higher than the previous day volume traded. 
  • This was driven by the announcement of the South Korean President Yoon giving the approval to conduct exploratory drilling for potentially vast oil and gas prospects near Pohang. 
  • The Korean government announced that there is a “very high” possibility the area contains as much as 14 billion barrels of oil and gas.

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Jun 02
0

Daily Brief Utilities: China Yangtze Power Co, Ltd. and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes

Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes

By Travis Lundy

  • 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 5.7bn of A-shares on lower gross volumes. NORTHBOUND bought Zijin, Yangtze Power, and renewables and sold SOEs.
  • Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.

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May 31
0

Daily Brief Utilities: Engie SA, Neoen, Talen Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Quiddity Leaderboard ES50 Sep 24: US$1.1bn Index Inflow for Engie if Nokia’s Rank Falls by ONE
  • Brookfield to Launch Mandatory Offer for Neoen
  • TLNE: Electrifying Tender, PT to $145

Quiddity Leaderboard ES50 Sep 24: US$1.1bn Index Inflow for Engie if Nokia’s Rank Falls by ONE

By Janaghan Jeyakumar, CFA

  • The ES50 Index is one of the most highly-tracked and followed indices in Europe and the annual index review takes place in September every year.
  • This annual index rebal event usually results in some of the most significant index flow events in Europe every year, typically amounting to billions of dollars of flows.
  • In this insight, we take a look the names leading the race to become ADDs/DELs for the upcoming index review in September 2024.

Brookfield to Launch Mandatory Offer for Neoen

By Jesus Rodriguez Aguilar

  • Brookfield (BN CN) has entered exclusive negotiations with the top shareholders of Neoen (NEOEN FP) to acquire a 53.32% stake at €39.85/share, 26.9% premium, which will trigger a mandatory offer.
  • The offer represents 15.1x EV/NTM Fwd EBITDA vs. the median of peers at 9.3x. My fair-value estimate (DCF-based) is €33.76/share, therefore the offer is generous, in my view.
  • Expect the shares to close the spread tomorrow and trade around 3% gross spread and the convertibles to price higher (2% 06/25 at around €51.85, 2.875% 09/27 around 111.72%).

TLNE: Electrifying Tender, PT to $145

By Hamed Khorsand

  • TLNE is putting its growing cash balance to use by announcing a Dutch tender buyback of up to $600 million of its stock.
  • The Dutch tender establishes our price target of $120 is too low as we look ahead to 2025.
  • Our price target of $120 was based on TLNE generating approximately $700 million of adjusted EBITDA in 2024. We are now using our 2025 estimate for our price target

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May 25
0

Daily Brief Utilities: Avangrid and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Iberdrola/Avangrid: Spread

Iberdrola/Avangrid: Spread

By Jesus Rodriguez Aguilar

  • Post-March announcement, investors bought shares of Avangrid (AGR US)  in the hope of an offer sweetening, which was flagged here, as Iberdrola got $6 billion from its Mexico exit.
  • The improved $35.75/shareoffer was made in response to potential resistance from prospective minority shareholders, as the deal needs the approval of a majority of these non-Iberdrola stakeholders.
  • Spread is 3.2%/5.55% (gross/annualised) assuming $1.4667 in dividend payments (three dividends of $0.44 and a prorated dividend of $0.1467) and settlement on 30 December. Long.

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May 23
0

Daily Brief Utilities: Naturgy Energy Group SA and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • TAQA & Criteria/Naturgy: Imminent Offer

TAQA & Criteria/Naturgy: Imminent Offer

By Jesus Rodriguez Aguilar

  • Press reports that CriteriaCaixa and TAQA will launch their takeover bid for Naturgy at €27/share imminently, with conversations between CriteriaCaixa and TAQA on the distribution of control practically finished. 
  • The offer will target approximately 54% of the share capital of Naturgy. TAQA must go through an exhaustive permit request process due to the highly regulated businesses of Naturgy.
  • The shares look fairly priced vs. comparables. At the closing share price of 22 May of €24.92/share, I would be long Naturgy (gross spread to hypothetical offer is 7.7%).

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May 21
0

Daily Brief Utilities: Citicore Renewable Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • Citicore Renewable Energy IPO – Needs a Wider Discount to Be Attractive

Citicore Renewable Energy IPO – Needs a Wider Discount to Be Attractive

By Clarence Chu

  • Citicore Renewable Energy (CREC PM) is looking to raise around US$120m in its Philippines IPO.
  • Citicore Renewable Energy (CREC) is a pure-play renewable energy platform focused on developing and operating renewable energy projects in the Philippines.
  • We looked at the firm’s past performance in an earlier note. In this note, we will share our thoughts on valuation.

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May 17
0

Daily Brief Utilities: JSW Energy Ltd, Spruce Power Holding and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • JSW Energy: Powering India’s Future
  • Spruce Power Holding Corporation – “Strongest Position in Its Corporate History”

JSW Energy: Powering India’s Future

By Sudarshan Bhandari

  • A Detailed understanding of Thermal cum Renewable Power house JSW Energy Ltd (JSW IN) Business and their ambitious target to achieve 10 GW by FY25.
  • Strategy 2.O, where company is planning for 20GW by 2025, energy storage system.
  • JSW Energy’s strategic acquisitions and focus on renewables enhance growth prospects, with a vision to become a leading renewable energy provider.

Spruce Power Holding Corporation – “Strongest Position in Its Corporate History”

By Water Tower Research

  • Spruce announced 1Q24 earnings and hosted an analyst briefing with the company’s new CEO Chris Hayes.
  • Spruce is a leading owner-operator in residential solar.
  • The company has acquired 13 portfolios in the last four years and owns the cash flow from approximately 75,000 residential solar systems.

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May 15
0

Daily Brief Utilities: Talen Energy and more

By | Daily Briefs, Utilities Sector

In today’s briefing:

  • TLNE: Spark of Value

TLNE: Spark of Value

By Hamed Khorsand

  • TLNE reported Q1 results benefiting from its hedging program to offset the warmer winter in parts of the country. The Q1 results confirmed the commentary management had previously provided
  • TLNE sold its power plants in Texas subsequent to the first quarter ending. This should remove a large portion of volatility from TLNE’s operations
  • Spark spreads have continued to move in TLNE’s favor implying quarterly results this year could remain above expectations

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