In today’s briefing:
- Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector
- Taiwan Dual-Listings Monitor: TSMC Spread Back to Elevated Range; ASE Short Interest Spikes Higher
- AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge
- Cerebras Files Intent To IPO. This Will Be Interesting
- Helix Energy Solutions Up for Sale? 4 Reasons It’s A Prime Acquisition Target!
Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector
- By way of its 54.79% ownership in Zheshang Securities (601878 CH), Zhejiang Expressway Co H (576 HK) is an attractive indirect vehicle to access the mainland securities sector.
- The attributable market cap of Zheshang equals 90% of ZJE’s market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE’s 1H24 profit.
- ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.
Taiwan Dual-Listings Monitor: TSMC Spread Back to Elevated Range; ASE Short Interest Spikes Higher
- TSMC: +18.6% Premium; Spread Has Returned to Previous Elevated Trading Range
- UMC: +1.5% Premium; Wait for Higher Level Before Shorting the Spread
- ASE: +4.2% Premium; Can Consider Going Long the Spread at Current Level
AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge
- Given its holdings in four A-share subsidiaries, AviChina Industry & Technology H (2357 HK) will benefit from the surge in their share prices as mainland markets re-open.
- These A-share all lagged benchmark Indices YTD. Avichina’s holdings in them are already valued at 2.23x its own market capitalisation.
- The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina’s share price has not yet excessively priced in the post-Golden Week rally.
Cerebras Files Intent To IPO. This Will Be Interesting
- Cerebras presently derives up to 87% of its revenue from G42
- Microsoft gatecrashed Cerebras party with a $1.5 billion investment in G42 to “accelerate AI development and global expansion”
- G42 “severed its ties” with China in advance of the Microsoft investment
Helix Energy Solutions Up for Sale? 4 Reasons It’s A Prime Acquisition Target!
- Helix Energy Solutions has emerged as a prime candidate for strategic acquirers and financial sponsors exploring opportunities in the offshore oil and gas industry.
- The company, which provides specialized services such as well intervention, robotics, and production facilities, is exploring its strategic options, including a potential sale.
- Helix’s latest quarterly earnings call revealed a significant improvement in revenue and profitability, alongside strong operational performance across its key segments.
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