In today’s briefing:
- Tabcorp To Split Lotteries and Wagering Businesses
- Tabcorp (TAH AU): Spin-Off Upside & Index Implications
- Crown Resorts Scheme Meeting on 29 April, IE Opinion
- Ahlada Engineers Ltd- Forensic Analysis
- (Mostly) Asia M&A: March 2022 Roundup
- V3 Brands Asia Pre-IPO – The Negatives – While Margins Have Grown, so Have Payouts to Founder
- After Falling 50%+ in a Few Months Is Nokian Renkaat (TYRES FH) A “Buy” Or “Sell”?
- M: Expect Strong Earnings Recovery in 1Q22
- Astro Malaysia (ASTR.KL) – Ended The Fy On A Slightly More Positive Note
Tabcorp To Split Lotteries and Wagering Businesses
- Tabcorp Ltd (TAH AU) has registered the Demerger Booklet in relation to the proposed demerger of The Lottery Corporation.
- The demerger general meeting and Scheme Meeting will be held on the 12 May with a potential demerger date on the 1 June.
- The independent expert estimates the lottery ops may be worth up to A$11.6bn and wagering A$2.7bn, against Tabcorp’s current market cap of A$11.6bn.
Tabcorp (TAH AU): Spin-Off Upside & Index Implications
- If approved, Tabcorp Ltd (TAH AU) will spin-off the Lotteries and Keno business (The Lottery Corporation; TLC) from the Wagering & Media and Gaming Services business (new Tabcorp).
- Based on peer valuations, we see an upside of 11% from the last price. The Scheme Meeting is on 12 May and the Second Court Hearing on 20 May.
- TLC should remain in all major indices, while new Tabcorp Ltd (TAH AU) could be deleted from the S&P/ASX 50 Index and the MSCI Australia Index.
Crown Resorts Scheme Meeting on 29 April, IE Opinion
- Unsurprisingly, the independent expert (IE) considers Crown Resorts (CWN AU)‘s A$13.10 offer from Blackstone Group (BX US) to be fair and reasonable. We think that IE’s valuation approach is sound.
- The key condition is approval from shareholders and gaming regulatory authorities. The scheme meeting is scheduled for 29 April.
- We continue to think that offer is attractive. At the last close price and for the 12 May implementation date, the gross and annualised spread is 2.7% and 27.1%, respectively.
Ahlada Engineers Ltd- Forensic Analysis
- Located near Hyderabad, Ahlada Engineers (AHLADA IN) manufactures and sells steel doors and windows in India. It also produces school furniture, drinking water systems and allied products across numerous industries.
- The facilities are spread across 3 manufacturing units in addition to one assembling unit and stock yard, with an area admeasuring 27,153 square yards on the outskirts of Hyderabad.
- Ahlada however suffers from some balance sheet and financial issues which are highlighted in our report.
(Mostly) Asia M&A: March 2022 Roundup
- For the month of March, five new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
- The average premium for the new deals announced (or first discussed) in March was ~31%.
- This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.
V3 Brands Asia Pre-IPO – The Negatives – While Margins Have Grown, so Have Payouts to Founder
- V3 Brands Asia (V3 HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. It was previously listed on the SGX between 2000-2016.
- V3 Brands Asia is a lifestyle and wellness firm, it is most known for its flagship massage chairs which are sold under the OSIM brand.
- In this note, we’ll talk about the not so positive aspects of the deal.
After Falling 50%+ in a Few Months Is Nokian Renkaat (TYRES FH) A “Buy” Or “Sell”?
- Has the Russia/Ukraine Conflict’s Impact On Tire Retail Distribution and Manufacturing Been Priced In?
- Have The Impact of Higher Raw Materials Costs Already Been Factored Into Margin Expectations?
- Will Gasoline Prices Negatively Impact Miles Driven and Slow Replacement Cycles?
M: Expect Strong Earnings Recovery in 1Q22
- We reiterate our BUY rating for M with a target price of Bt61.0 based on 25xPE’22E, Asia ex-Japan consumer staple sector.
- We expect M to report net profit of Bt393m in 1Q22 (+343%YoY, -2%QoQ) driven by a positive same-store-sales-growth (SSSG) in three main brands (MK, Yayoi, and Laem Charoen Seafood)
- We forecast earnings to bounce back to Bt2.2bn in 2022 and continue to grow at 14%CAGR(2023-24) supported by 1) solid recovery in SSSG after resuming dine-in services together with restoring
Astro Malaysia (ASTR.KL) – Ended The Fy On A Slightly More Positive Note
- Maintain BUY call with lower TP of MYR1.36 (-7%)
- Earnings and dividends in-line with our expectations
- Adex surged QoQ but home shopping slumped QoQ
- Cautiously optimistic of its future
Before it’s here, it’s on Smartkarma
