In today’s briefing:
- Punters Take A Gamble on Genting Singapore
- Genting Singapore in the Crosshairs of Potential Suitors
- M : Time to Harvest
- India EV Sector: Electric Cars in Demand, but Limited Options. Tata’s Nexon EV Leads
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)
- SOCAR Revised Prospectus: Critical Issues Still Not Addressed
Punters Take A Gamble on Genting Singapore
- Bloomberg is reporting Genting Singapore (GENS SP) has been attracting suitors, including MGM Resorts International (MGM US).
- With Macau all-but emulating a Shanghai-style lockdown, including the recent shuttering of all casinos, large global casino operators will be looking to diversify their revenue base.
- But with Singapore potentially emerging as Asia’s go-to gaming destination going forward, it’s unlikely the Lim family will exit their Genting flagship.
Genting Singapore in the Crosshairs of Potential Suitors
- Bloomberg reported MGM Resorts International (MGM US) recently approached Genting Singapore (GENS SP)’s controlling shareholder, Genting Bhd (GENT MK), to express an interest in a deal.
- While the discussions with MGM Resorts have fizzled out, other potential suitors are reportedly interested. Shares are in a trading halt pending a response to an SGX query.
- Genting Singapore trades at a discount to peers. Precedent transactions suggest a potential privatisation price of at least S$1.00 per share, a 33% premium to the last close.
M : Time to Harvest
- We recommend BUY for M supported by three main reason:1) a strong earnings recovery outlook in 2022-24,2) net cash position with upside from new M&A deal and LCS franchise fees
- Earnings is expected to turn positive and strongly QoQ improvement in 2Q22 We expect 2Q22 net profit to be at Bt444m (+64%QoQ), recovery from a loss of Bt99m in 2Q21
- Rising food costs are manageable Most of costs are raw material costs and the major portion of food cost are pork and poultry.
India EV Sector: Electric Cars in Demand, but Limited Options. Tata’s Nexon EV Leads
- Tatas are scripting India’s early journey in electric cars – Tata Motors Ltd (TTMT IN) accounted for 87% of the 8077 electric cars sold in Q1FY23 (1605 units in Q1FY22).
- The rapid roll-out of charging infrastructure across the country by Tata Power (TPWR IN) and the success of Tata’s electric car (compact SUV). Tata Nexon EV, are key factors.
- Demand and infrastructure for electric cars seem to be in place but market growth is restricted by a lack of choice/adequate supply in the popular price range (<USD 20K).
Shanghai/Shenzhen Southbound Connect: Weekly Moves (15 July 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, the net outflow over the past week was ~US$0.56bn, split (-US$0.44bn) for Shanghai and (-US$0.12bn) for Shenzhen.
- The largest inflows were into Geely Auto (175 HK) and Hang Seng H Share Index ETF (2828 HK). The largest outflow was in Meituan (3690 HK) and CNOOC (883 HK).
SOCAR Revised Prospectus: Critical Issues Still Not Addressed
- There must be a rationale for car sharing to receive a higher valuation than the traditional rental car business. For this, profit per vehicle must be provided, not sales.
- Also, whether SOCAR can justify its valuation built on the relatively high valuation premiums granted to ccOS and FMS companies is still questionable.
- Concerning fund flow, it is positive that SOCAR can aim for LG Energy’s six-month lockup release. But it is unclear how much flow will be left for SOCAR after WCP.
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