In today’s briefing:
- Merger Arb Mondays (16 Oct) – NWS, Haitong Intl, Eoflow, Liontown, Origin Energy, Estia, Pact, JSR
- J&T Global Express Pre-IPO, Part 6 | How We Could Potentially Get Closer To US$13 Bn Valuation
- Sa Sa Intl (178 HK): Revival Well on Track
- Morning Views Asia: Anton Oilfield, China Jinmao Holdings, Pan Brothers, Tata Motors ADR
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Merger Arb Mondays (16 Oct) – NWS, Haitong Intl, Eoflow, Liontown, Origin Energy, Estia, Pact, JSR
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Haitong International Securities Group (665 HK), Orecorp Ltd (ORR AU), Liontown Resources (LTR AU).
- Owest spreads Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), Pact Group Holdings (PGH AU), Origin Energy (ORG AU), T&K Toka Co Ltd (4636 JP), Healthway Medical Corp (HMED SP).
J&T Global Express Pre-IPO, Part 6 | How We Could Potentially Get Closer To US$13 Bn Valuation
- In this insight we consider what it would take to pull our valuation up closer to US$13 bn
- Such a valuation would require solid revenue growth (+17-18% Y/Y or better), plus sustained progress on raising China and ‘Other’ EBITDA margins, which are currently negative
- Even with these optimistic assumptions, J&T would trade at 20x EV/2025 Adj EBITDA & at historical EV/Revenue multiples far above more profitable Chinese express names
Sa Sa Intl (178 HK): Revival Well on Track
- Market expectation for FY23/24 earnings of Sa Sa International Hldgs (178 HK) is overly conservative. It achieved HK$110-125m of profit in 1H, and 2H is the normal peak season.
- Offline sales in 2Q23/24 recovered to 47.2% of the 2019 level and the rebound in mainland tourist arrivals should boost sales over the next 12 months.
- Lower rent costs should allow for higher operating leverage as revenue revives. Its gross margin for 1H23/24 has further expanded and we think this trend can be sustained.
Morning Views Asia: Anton Oilfield, China Jinmao Holdings, Pan Brothers, Tata Motors ADR
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.