In today’s briefing:
- An Early Look at the Potential KOSPI200 Rebalance Candidates in June 2024
- Inabata & Co Placement – Should Come as a Surprise
- Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance
- Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates
- Kerry Logistics Network to Pay Dividend in Form of KEX Shares | SF Holding’s Role & Objectives
- Standard Profil – ESG Report – Lucror Analytics
An Early Look at the Potential KOSPI200 Rebalance Candidates in June 2024
- We discuss the potential KOSPI200 rebalance candidates in June 2024. In the past several years, there have been a lot of alpha generating stocks arising from the KOSPI200 rebalances.
- The following companies are likely candidates which could be included in KOSPI200 rebalance in June 2024, including Posco DX, Doosan Robotics, Hyosung Heavy Industries Corp, and DS Dansuk.
- For the potential exclusion candidates, we included 10 stocks that are in the bottom 5% market caps in KOSPI200.
Inabata & Co Placement – Should Come as a Surprise
- Sumitomo Chemical (4005 JP) and Mizuho Trust & Banking are looking to raise around US$180m through the sale of their stake in Inabata & Co (8098 JP).
- The deal is a large one to digest, at 90 days of three month ADV and 15% of current mcap.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Japan Airlines: Seasonality Scrutiny Still Suggests Significant Upside to FY24 Guidance
- We revisit FY24 prospects by highlighting that historical full service carrier (FSC) earnings seasonality suggests group EBIT guidance of ¥130bn is very conservative.
- FSC FY24 EBIT guidance of ¥80bn implies only ¥9bn in 2H, 12% of 1H’s ¥71bn, whereas historically 2H has represented 74-83% of 1H. We model ¥59bn or 84% in 2H.
- Our ¥176.5bn group EBIT for FY24 is 36% above guidance but also 27% above Visible Alpha consensus, largely due to lower costs, which position JAL strongly for the long-term.
Ferrotec (6890 JP): Return to Growth Led by Power Semiconductor Substrates
- Ferrotec shares have dropped by a third since last July and are now selling at 8.2x EPS guidance and 0.6x book value.
- Sales and operating should start to recover in 2H of FY Mar-24, led by power semiconductor substrates.
- Buy for the upturn in the semiconductor cycle and capacity expansion in Japan, China and Malaysia. No significant damage from the Noto Peninsula earthquake has been reported.
Kerry Logistics Network to Pay Dividend in Form of KEX Shares | SF Holding’s Role & Objectives
- Kerry Logistics Network will pay a special dividend in the form of KEX shares
- This will trigger a general offer by SF Holding for all KEX shares at THB 5.50
- Why is SF Holding doing this, & how could its int’l express business change?
Standard Profil – ESG Report – Lucror Analytics
- Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
- We assess Standard Profil’s ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial”, but Disclosure is “Weak”.
- Standard Profil (SP) is a European manufacturer of automotive sealing solutions.
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