In today’s briefing:
- Aida Engineering (6118) Buyback – Not Big Enough, But Not Small; They Gotta Shrink E.
- Pair Trade Idea: Short Evergreen Against Long Maersk / ZIM
- Ceigall India Pre-IPO Tearsheet
- AviChina Industry (2357 HK): Better Look Forward
Aida Engineering (6118) Buyback – Not Big Enough, But Not Small; They Gotta Shrink E.
- Late last week, machine tool and press maker Aida Engineering (6118 JP) made an announcement of a share buyback. Up to 2.3mm shs (3.59%) spending up to ¥2bn.
- The company has filed a policy for “Action to Implement Management That is Conscious of Cost of Capital and Stock Price” in its most recent CorpGov report available (J/E) here.
- It will be a little smaller than that, but it is worth taking a closer look at the details, etc.
Pair Trade Idea: Short Evergreen Against Long Maersk / ZIM
- Since October, Evergreen shares have performed well on rising spot rates
- Over the same period, Maersk and ZIM shares fell on longer-term concerns
- Pair trade idea: SHORT Evergreen vs LONG Maersk / ZIM position
Ceigall India Pre-IPO Tearsheet
- Ceigall India (1605242D IN) is looking to raise at least US$100m in its upcoming India IPO. The deal will be run by IIFL Securities, JM Financial and ICICI Securities.
- Ceigall India is an infrastructure construction company with experience in undertaking specialized structural work such as elevated roads, flyovers, bridges, railway over bridges, tunnels, highways, expressways and runways.
- Its principal business operations are broadly divided into EPC and hybrid annuity model (HAM) projects, which are spread across ten states in India.
AviChina Industry (2357 HK): Better Look Forward
- AviChina Industry & Technology H (2357 HK)‘s FY23 earnings growth of 5.5% is affected by dilution and restatement. Its A-share subsidiaries achieved a 24% aggregate earnings growth.
- Gross margin expanded and outlook remains decent. Projected growth for these A-shares reached 36.6% in FY24F and 23.8% in FY25F. Net cash equals 40% of the share price.
- The stock’s 8.5x and 7.3x PERs for FY24F and FY25F are cheap relative to its peers. It also trades at 57% discount to its A-share holdings.
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