In today’s briefing:
- Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms
- Mitsubishi Chemical (4188) | Unlocking Value – 50% Upside
- (Mostly) Asia M&A, Feb 2023: Newcrest Mining, S.M Entertainment, Kanematsu, Nissin Electric
- Kansai Paint Placement – Hardly an Outstanding First Offering Since Listing
- A Real Dividend Grower
- The Highlights of USDAs 2023 Commodity Outlook // Where Stock Prices Are Headed in 2023
- Cameco: The Tide Has Turned, Bet On Momentum
- Another Solid Quarter; Maintain Buy Recommendation
- Holcim: +15% Since Initial Note. 2022 a Remarkable Year!
Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- Today after the close, Kansai Paint (4613 JP) announced a passel of crossholders would sell 26.2mm shares in a Secondary Offer. They also announced a buyback.
- The buyback, spending up to ¥12bn to buy back up to 8.2mm shares, starts after the Offering is delivered, and extends until 15 March 2024.
- This offering reduces cross-holder “strategic holdings” by a third. This will impact FFW. Complicated index impacts will occur over time.
KRX New Deal Index Rebalance Preview: Potential Flows as Announcement Looms
- The review period for the March rebalance ended on 31 January, changes will be announced in the next few days and implemented at the close of trading on 9 March.
- We forecast one add/delete for the Secondary Battery Index and Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
- The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).
Mitsubishi Chemical (4188) | Unlocking Value – 50% Upside
- Investors have completely ignored “The New MCG”. If management can hit EBITDA targets, we see over 50% upside for the stock
- Rapid cost cuts of Y135 billion will be a catalyst for the share price
- Transformation to leaner, more focused group with strategic growth in EVs, hydrogen, semicon and health
(Mostly) Asia M&A, Feb 2023: Newcrest Mining, S.M Entertainment, Kanematsu, Nissin Electric
- For the month of February, 14 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$23bn.
- The average premium for the new deals announced (or first discussed) in February was 34%.
- This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.
Kansai Paint Placement – Hardly an Outstanding First Offering Since Listing
- Kansai Paint’s shareholders aim to raise around US$291m via a secondary follow-on offering. This is a large deal to digest, at 34 days of three month ADV.
- The firm has also mentioned that it will conduct a share buyback of up to 8.2m shares worth approximately 3.5% of TSO or US$87.6m (JPY12bn). This will begin after settlement.
- In this note, we will talk about the placement and run the deal through our ECM framework.
A Real Dividend Grower
- One of top three global industrial gas suppliers well positioned to capitalise on renewables growth like hydrogen
- Unbroken history of annual dividend increases for the past 40 years
- Risks include execution hiccups and cost overruns
The Highlights of USDAs 2023 Commodity Outlook // Where Stock Prices Are Headed in 2023
- The agency estimates that roughly 46% of Ukraine’s wheat production lies in areas where the war is currently threatening the planting process.
- US Soybean Crush Margin remains very high and therefore continues to support soybean meal prices
- USDA is expecting a larger uptick in planted acres for Wheat and Rice but a large drop in planted acres for Cotton.
Cameco: The Tide Has Turned, Bet On Momentum
- Cameco Corporation is in the middle of a substantial turnaround, which investors could soon price.
- The company’s financial results improved in 2022, it has secured a record number of supply contracts.
- The momentum anomaly is set to play its hand, but the stock still possesses valuation concerns, according to the company.
Another Solid Quarter; Maintain Buy Recommendation
- Tupras is Turkey’s largest refiner in Turkey supplying roughly 55% of Turkey’s petroleum product needs and 57% of Turkey’s storage capacity. The refineries produce a full range of refined petroleum products including gasoline
- Company is owned 53% by KOC, the largest private conglomerate in Turkey that accounts for an estimated 7% of the country’s GDP.
- Tupras produced a stellar set of 4Q 2022 results reflecting significant margin improvement; Revenue and EBITDA were up 104% and 212% over 4Q 2021 respectively. We maintain our buy recommendation
Holcim: +15% Since Initial Note. 2022 a Remarkable Year!
- 2022: A year of record performance and successful transformation for Holcim
- Solutions & Products reaching 19% of net sales and fast expansion in the most attractive market of North America
- We increase our target price to CHF 71, implying 22% upside from here
💡 Before it’s here, it’s on Smartkarma
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