Daily Brief Industrials: Doosan Bobcat Inc, LS Electric, Hanwha Corporation, Timee Inc, Axon Enterprise , Comfortdelgro Corp, Sanyo Trading and more

• On 24 July, the Financial Supervisory Service (FSS) ordered the Doosan Group to resubmit the merger plan. 
• It is rare for FSS to reject companies’ merger reports but there has been an exception this time since this deal is egregiously negative to many minority investors.
• Doosan Group needs to resubmit a revised merger plan within next three months. Otherwise, the securities report involving the merger plan of the Doosan Group companies will be considered withdrawn. 

• The FSS requested Doosan Robotics to revise the prospectuses for both the Share Swap with Doosan Bobcat and Merger with Doosan Enerbility.
• Although the FSS’s wording seems aggressive, it does not request the cancellation. Authorities are displeased but lack political momentum to derail Doosan’s restructuring.
• The FSS asks Doosan to clarify merger synergies, warn of Robotics’ overvalued stock price and potential decline, and highlight the collaborative robot market’s growth risks.

• The review period for the September rebalance of the KOSPI Size Indices commenced on 1 June and will end on 31 August.
• We see 8 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 11 stocks moving from SmallCap to MidCap and 3 new additions to MidCap.
• There are a few stocks that are expected to have passive flows from global and local index trackers over the next few months and that will add to the impact.

• After the market close on 24 July, Hanwha Corporation (000880 KS) announced that Hanwha Energy secured an additional 5.2% stake in Hanwha Corp through a tender offer.
• A total of 3.9 million shares have been applied for the tender offer as of 24 July (65% of targeted amount). 
• We believe that the Hanwha Group is likely to grab more shares in Hanwha Corp through an additional tender offer sometime in the next 6-12 months. 

• Timee Inc (215A JP) raised US$300m in its Japan IPO. The IPO had been a 100% secondary selldown by existing shareholders.
• Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
• We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.

• Axon sells a public safety technology ecosystem that includes three main product groups, TASERs, body-worn cameras and other sensors, and evidence software, amongst a host of other software services, including virtual reality training.
• Axon’s solutions really seek to solve three of the biggest problems facing public safety, too many officers and too many suspects are dying from gunshots.
• Axon solves for this is as the monopoly provider of TASERs globally. A TASER can be used as an alternative to firearms to temporarily incapacitate a suspect so that they may be restrained with a much, much lower chance of doing physical harm.

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• ESG Brew with ComfortDelGro’s Group Chief Sustainability and Risk Officer: ‘Our transition to cleaner energy vehicles will be a game-changer’ Land transport operator ComfortDelGro is switching its fleet of over 40,000 vehicles in 12 countries to cleaner energy ones as part of its sustainability drive.
• Jong explains: “We operate in 12 countries with a total fleet of over 40,000 vehicles spanning taxis, buses, trains and more.

• Proactiveanddiversifiedapproachtogrowth–SanyoTrading continues to execute its transformation strategy toward generating sustainable growth, underlined by its key principles in its latest long- term plan ‘SANYO VISION 2028’.
• While sales mix improvement remains a core theme to raise profitability, we believe the company is taking a multifaceted approach to generating growth through margin enhancement efforts, sales volume expansion, and earnings-accretive M&A.
• With this, management has access to different growth levers, as the business model is inevitably influenced by economic cycles.