In today’s briefing:
- Quiddity JPX-Nikkei 400 Rebal 2025: End-Sep 2024 Ranks
- Shinsegae E&C (034300 KS)’s Delisting Offer
- End of Mandatory Lock-Up Periods for 39 Companies in Korea in October 2024
- Tokyo Metro IPO – Thoughts on Valuation
- Sanwa Holdings (5929) | Revolving Door of Activist Influence
- Give Credit Where Credit Is Due
- Logistics Shift to Quality Amid Evolved Ecommerce Plans
- Plug Power Inc.: Expanded Production Capacity and Green Hydrogen Plant Projects Drive Our Optimism! – Major Drivers
- Roper Technologies Inc.: Enhanced Product Integration and SaaS Solutions Catalyzing Growth! – Major Drivers
- ITT Inc.: Will The Acquisition of kSARIA Be A Game Changer? – Major Drivers
Quiddity JPX-Nikkei 400 Rebal 2025: End-Sep 2024 Ranks
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2025 based on trading data as of end-September 2024.
Shinsegae E&C (034300 KS)’s Delisting Offer
- Construction services play Shinsegae E&C (034300 KS) has announced a Tender Offer from E Mart (139480 KS) for 27.33% of shares out, at ₩18,300/share, a 14% premium to undisturbed.
- E Mart holds 70.46% – and the company holds 2.21% in treasuries – therefore, E Mart requires ~22% of the remaining ~27% held by minorities to tender and force delisting.
- Super clean deal. E Mart will acquire all shares tendered. The Offer kicks off today, and closes on the 29th October. There is no minimum tendering % condition.
End of Mandatory Lock-Up Periods for 39 Companies in Korea in October 2024
- We discuss the end of the mandatory lock-up periods for 39 stocks in Korea in October 2024, among which four are in KOSPI and 35 are in KOSDAQ.
- These 39 stocks on average could be subject to further selling pressures in October and could underperform relative to the market.
- The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in October are Korea Zinc, Doosan Robotics, and Kolon TissueGene.
Tokyo Metro IPO – Thoughts on Valuation
- Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its Japan IPO.
- Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about valuations.
Sanwa Holdings (5929) | Revolving Door of Activist Influence
- ValueAct Capital took a significant 5.9% stake in Sanwa. Dalton Investments has also been a shareholder, but had most recently sold down to under 5% in June
- Sanwa Holdings (5929 JP) presents an attractive investment opportunity rooted in its strong global market position, undervalued stock price, and growth potential
- We see 30% upside, based off historical revenue growth, 11% EBIT margins, and an exit multiple of 12.5x (global peers).
Give Credit Where Credit Is Due
The company is headquartered in Singapore and listed under the ticker $TCU.SI
As the name implies, CBA is a credit bureau business that operates across Asia.
It currently has operations in Singapore, Malaysia, Cambodia, and Myanmar, with plans to expand in China and Vietnam shortly.
Logistics Shift to Quality Amid Evolved Ecommerce Plans
- Amid fierce low-price competition in 1H24, low-end couriers benefited from merchant demand for cheap logistics. However, new platform policies suggest greater emphasis on quality logistics and O2O in 2H24;
- The shift towards higher-end logistics is manifesting through O2O. Spearheaded by Meituan, O2O is an experiment to copy Coupang’s business model in China. We believe there is a sizable market;
- We see ZTO as best positioned amid the changing environment, JDL least impacted, with J&T and SFE in the least favorable positions.
Plug Power Inc.: Expanded Production Capacity and Green Hydrogen Plant Projects Drive Our Optimism! – Major Drivers
- Plug Power’s latest financial earnings for the second quarter of 2024 showcase a complex mix of achievements and ongoing challenges.
- The company’s progress in the hydrogen economy reflects both substantial strategic advances and areas where market conditions have tempered growth expectations.
- Positively, Plug Power has achieved significant milestones in scaling up its hydrogen production capabilities.
Roper Technologies Inc.: Enhanced Product Integration and SaaS Solutions Catalyzing Growth! – Major Drivers
- Roper Technologies recently disclosed their financial performance for the second quarter of 2024, with the presentation focused on solid quarterly achievements and updating fiscal guidance.
- The company, a diversified technology firm, visually demonstrated its continual growth and groundwork for future investments particularly simplifying operational processes and broadening its market presence through strategic acquisitions.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
ITT Inc.: Will The Acquisition of kSARIA Be A Game Changer? – Major Drivers
- ITT’s 2024 second quarter earnings call reflected a robust period of growth and strategic positioning bolstered by significant commercial wins and streamlined operations.
- The tone conveyed by CEO Luca Savi and CFO Emmanuel Caprais revealed a company making deliberate strides in expanding its market foothold, particularly within high-margin, high-growth sectors.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
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