Utilities Sector

• KKR offers €17.50/share for Encavis AG (ECV GR), 53% premium, implied equity value of €2,818 million. This shows interest in renewables after the falls on the stock market in 2023-24.
• The offer represents 12.7x EV/Fwd NTM EBITDA and 32.4x Fwd P/E. On  a P/E basis, the offer seems fair vs. (depressed) comparables.
• Given the current negative perception surrounding renewable energy companies, I think the shareholders are likely to tender at an attractive price. Spread is 3.77%/5.24% (gross/anualised, assuming closing by mid-December).

• TLNE reported fourth quarter results impacted by two unplanned maintenance issues and yet managed to report operating income and adjusted EBITDA for the period.
• TLNE reported revenue of $527 million in the quarter compared to our forecast of $507 million. Energy related revenue dropped in the quarter due to two maintenance issues and seasonality.
• TLNE’s stock has started to inch closer to our original target of $96, but we believe there is upside from there if TLNE is valued closer to other nuclear peers.

• A&D Holon Holdings is a Japanese precision instrument company specializing in industrial measuring, medical equipment, and semiconductor production
• The company’s semiconductor division is driving high growth and profitability, with expected earnings growth of around 50% over the next two years
• Despite strong prospects, A&D Holon Holdings is significantly undervalued, trading at low multiples on FY Mar-2024 estimates

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.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China South City
• Greenko Energy Holdings
• Road King Infrastructure

• China Longyuan Power (916 HK) should see a mean reversion of its valuations. It has rebounded 36% from the the 2024 trough, but has only gone up 0.3% YTD.
• There are three catalysts in place to drive the move: acceleration in power generation, cash flow improvement, and recovery in the wind power market.
• Its P/B is at a 40% discount to average, and a return to such level will generate a 60% upside. Even after reversion, its PER of 7.8x is not stretched.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Pertamina Geothermal Energy PT
• Sunny Optical Technology Group
• West China Cement
• Yuexiu Property

• Iberdrola SA (IBE SM) launches a $34.25/share cash offer to acquire the minorities (18.4%) in its US subsidiary Avangrid (AGR US). Premium is 6.8%, and the cost c. $2.5 billion.
• The market was awaiting this move since the cancellation of the PNM deal, which explains the recent rise in the share price of Avangrid.
• Gross spread is 4.5%. It seems investors are buying in the hope of an offer sweetening, knowing that Iberdrola has some cash available to spend from the profitable Mexico exit.

• The GoI is looking to raise up to US$248m from selling its stake in Neyveli Lignite (NLC IN).
• This seems to be part of the GoI’s ongoing divestment drive across PSUs, with the recent selldowns in other PSUs having done well. 
• The GoI had also sold some stake in the firm earlier in Oct 2017. 

• Gigacloud Technology is a B2B ecommerce company connecting manufacturers in Southeast Asia with retailers in the US, Japan, and Western Europe
• Recent short attack from Culper Research debunked by independent review by the Board
• Transitioning to become a fully US-based public company and has acquired Noble House LLC at an attractive price, with stock expected to appreciate by 78% to $23.72 by the end of 2025

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.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy

• China Power International (2380 HK)‘s Jan power sales showed a sharp 41.2% YoY growth. More importantly, this marks sustaining a solid MoM trend in the last few months. 
• Recovery of the hydropower generation is encouraging as this was a drag last year. Meanwhile, higher coal-fired generation will capture the better profitability of this segment.
• CPI’s strongest earnings CAGR in the sector has made its earnings multiples increasingly cheap over the next two years. After +15.7% YTD in its share price, there is further upside.

• TLNE announced the sale of Cumulus Data for a valuation higher than we were expecting and includes a long-term power purchasing agreement
• TLNE’s management has also mentioned an ongoing sales process for TLNE’s assets in Texas, which could generate additional value.
• TLNE sold Cumulus Data for $650 million to Amazon Web Services (“AWS”). TLNE sold the assets the Company had situated adjacent to Susquehanna nuclear power plant

• Back in July 2022, Aussie renewable energy player Genex (GNX AU) announced an A$0.23/share NBIO from Skip Enterprises and Stonepeak, subsequently bumped to A$0.25/share, and confirmatory due diligence provided.
• Negotiations ceased in December that year.  As of today, Scott Farquhar’s Skip Enterprises continues to hold a 19.9% stake in Genex. 
• This morning, Genex announced an A$0.275/share NBIO from Electric Power Development (9513 JP) (J-Power), by way of a Scheme. A concurrent off-market A$0.27/share is in place.

• Genex Power Ltd (GNX AU) has disclosed a non-binding scheme proposal from Electric Power Development C (9513 JP) at A$0.275, a 48.6% premium to the undisturbed price of A$0.185.
• If the scheme fails, J-Power will launch an off-market takeover offer with a 50.1% minimum acceptance condition at A$0.270 per share. The dual-track bid is meant to counter Skip’s stake.
• The Board has granted exclusive due diligence until 31 March. The offer is attractive, but the scheme’s completion hinges on Skip Capital’s acceptance.  

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Green Energy
• Greenko Energy Holdings
• Tata Motors ADR

• Yankuang Energy, CGN Power and China Coal Energy are buys, China Resources Beer, China Vanke and Wuxi Biologics are sells for the iShares China Large-Cap (FXI) (FXI US) in March.
• Shorts have been spiking in China Vanke (2202 HK) while there has been covering in Yankuang Energy (1171 HK), China Resources Beer Holdings (291 HK) and Wuxi Biologics (2269 HK). 
• There has been an increase in cumulative excess volume on all the adds and deletes over the last few months. There could be more over the next week.

• Building circular setups with latest technology to drive battery revolution sustainably
• Goal to be fully circular company with 50% recycled material in ten years
• Facing challenges from Chinese competition in terms of scale and strategic positioning, focusing on customization and customer intimacy as key differentiators for success

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.