Daily Brief Industrials: Benefit One Inc, Hankook & Company, Cainiao Smart Logistics Network, Eva Airways, Shenzhen Inovance Technology Co.,, Sanyo Trading, Norcros PLC, Adani Ports & Special Economic Zone and more

• Since the announcement of the Benefit One Inc (2412 JP) partial offer, the stock has traded 16+mm shares in the market, which is about 40% of Real World Float.
• Some of that has been traded multiple times. Looking only at that data would suggest a higher pro-ration, but I expect there is other data one must take into account.
• Benefit One shares are currently trading at a level suggesting either lower participation OR higher back-end despite the earnings guidance downgrade at announcement.

• Cho Hyun-Sik has joined hands with MBK Partners to make a tender offer for shares of Hankook & Co for a minimum of 20.35% and maximum of 27.32% stake.
• The tender offer price is 20,000 won which is 18.9% higher than the closing price of 16,820 won on Monday.
• Chairman Cho Hyun-Bum may try to find a strategic ally to launch his own tender offer of Hankook & Co shares at even higher tender offer price than 20,000 won.

• In this insight we review important e-comm logistics transactions from 2023
• We also provide a preview of potential e-comm logistics deals in 2024
• Interested readers can also find links to HKEX filings and our earlier insights

• Taiwanese air cargo rates soared during the pandemic, and remain high today
• Taiwan’s carriers also benefited from an early recovery in outbound tourism
• Investors seem to be pricing in a ’24 earnings collapse that probably won’t happen

• This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
• Kweichow Moutai and Contemporary Amperex continue in the top 5 of gross flows but BYD and Chongking Changan Auto are now in the top 5 of nets and gross.
• Last week, NORTHBOUND were net buyers of RMB 1.61bn. BYD, Wuxi Apptec, and Chongking Changan Auto were joined by Shenzhen Inovance and Beijing-Shanghai High Speed Rail in the top five.

• Eva Airways (2618 TT) (EVA) is enjoying the perfect tailwind of strong demand from both inbound and outbound, capacity deficit, a resurgence in corporate travel, and rising cargo rates   
• Consensus believes FY2023 will be peak earnings as 2024 capacity rollout will balance the demand-supply, but our observations suggest things will likely remain the same until the end of 1H24
• Target price of TWD34.90 based on 13.4x FY2024 PE ratio – its long-term mean. Borderline attractive with a modest 11% UPSIDE, but 5.9% dividend yield is a sweetener  

• Business investment and targeting growth – we view Sanyo Trading’s new long-term plan as a step in the right direction for the company to become a higher-quality business.
• Whilst investment activities and macro headwinds may limit short-term growth prospects, the company has indicated ¥20bn to ¥30bn 5-year cumulative allocation in human capital, DX implementation, and M&A, which should drive transformation into a more diversified and resilient business.
• This commitment by management demonstrates its aim to drive higher returns by leveraging its core strengths of product differentiation, strong technical staff, and maintaining high customer success in new products and activities.

Norcros’s compelling investment case was underpinned at the half year where underlying operating profit was down less than 3% despite material revenue pressure. Group operating margins rose 60bp, the UK business reported record underlying profits and Norcros continued to take market share in both the UK and South Africa. We believe that Norcros’s key strengths are underappreciated and that legacy issues, notably the pension deficit, have been resolved. We retain our estimates and value the shares at 246p, implying c 50% upside.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone
• Yanlord Land