In today’s briefing:
- JSR Corporation (4185 JP): Risk/Reward in Context of Shin-Etsu’s Re-Rating and Looming Tender Start
- Adani’s Ambuja Cement Acquisition of Sanghi Cement Raises Questions Amidst Favorable Terms
- Commercial Metals Company: Initiation of Coverage – What Is Their Biggest Competitive Advantage? – Major Drivers
- Last Week in Event SPACE: T&K TOKA, Liquidated HK Stocks, JSR, Orecorp, Brilliance Auto, Hollysys
- Plains All American Pipeline: Initiation of Coverage – The Strategy Behind Their Unstoppable Growth in Crude and NGL Sectors! – Major Drivers
- Western Midstream Partners: Initiation of Coverage – The $885 Million Meritage Takeover – How It’s Revolutionizing Wyoming’s Energy Landscape! – Major Drivers
JSR Corporation (4185 JP): Risk/Reward in Context of Shin-Etsu’s Re-Rating and Looming Tender Start
- JSR Corp (4185 JP) pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement, the gross spread has averaged 7.7%.
- The wide gross spread reflects the risk in satisfying the pre-condition related to China SAMR approval and potentially shareholder approval due to Shin Etsu Chemical (4063 JP)’s re-rating.
- SAMR conditional approval would fit with the late February tender start timeline (at the earliest). Despite Shin-Etsu’s re-rating, the offer still looks reasonable.
Adani’s Ambuja Cement Acquisition of Sanghi Cement Raises Questions Amidst Favorable Terms
- Adani’s $600 million acquisition of Sanghi Cement in August 2023 marked its significant debut in the cement sector, following controversies around the group’s infrastructure ventures.
- The Master Supply Agreement with Ambuja & pricing structure, based on cost plus a 10% markup, has raised concerns about lower EBITDA realizations for Sanghi Cement, deviating from industry norms.
- Issues surrounding potential profit loss (Rs 357 crore) and investor skepticism echo previous instances, like the NDTV case, where minority shareholders experienced less favorable terms compared to the promoter.
Commercial Metals Company: Initiation of Coverage – What Is Their Biggest Competitive Advantage? – Major Drivers
- This is our first report on steel and metal products manufacturer, Commercial Metals Company.
- The company reported net earnings of $176.3 million or $1.49 per diluted share on net sales of $2 billion.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Last Week in Event SPACE: T&K TOKA, Liquidated HK Stocks, JSR, Orecorp, Brilliance Auto, Hollysys
- We expected a blandiloquent but bletcherous bump for T&K Toka Co Ltd (4636 JP). We got bletcherous.
- With the Hang Seng Index dipping below the 15,000 mark earlier this week, time to dust off some old school perspective with Benjamin Graham’s Net Nets.
- JIC CEO Yokoo reckons the JSR Corp (4185 JP) deal to be done by March-end. Language is vague. If that means to start by then, that’s still 30% annualised.
Plains All American Pipeline: Initiation of Coverage – The Strategy Behind Their Unstoppable Growth in Crude and NGL Sectors! – Major Drivers
- This is our first report on oil and gas storage and transporation player, Plains All American.
- This represents an increase of $50 million to $100 million from their previous guidance range’s top limit.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Western Midstream Partners: Initiation of Coverage – The $885 Million Meritage Takeover – How It’s Revolutionizing Wyoming’s Energy Landscape! – Major Drivers
- This is our first report on midstream assets developer, Western Midstream Partners (WES).
- The company has shown improvements in both adjusted gross margin and adjusted EBITDA due to increased throughput from all their operated assets and across all products.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
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