Daily BriefsIndustrials

Daily Brief Industrials: Fanuc Corp, Avalon Technologies, Va-Q-Tec AG, Shenzhen International and more

In today’s briefing:

  • Fanuc (6954) | Bullish on Robots
  • Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated
  • EQT/Va-Q-Tec: Generous Agreed Offer
  • Shenzhen Intl (152 HK): Numerous Drivers in Place to Boost FY23

Fanuc (6954) | Bullish on Robots

By Mark Chadwick

  • Fanuc is a core structural growth stock that has fallen by -4% over the past year. We turn bullish with 8 days to earnings
  • We believe that Fanuc is a key beneficiary of continued investment in automation and realignment of supply chains globally
  • We focus on Fanuc’s core value drivers – revenue, margins, risk and investment – and see 25% upside for long term investors

Avalon Technologies Pre-IPO – Sales Concentrated on a Handful. Market Tailwind Could Be Overstated

By Clarence Chu

  • Avalon Technologies (6594468Z IN) is looking to raise about US$130m in its upcoming India IPO. The IPO is expected to consist of both a fresh issue and a secondary portion. 
  • Avalon Tech (Avalon) is a vertically integrated electronic manufacturing services (EMS) firm delivering box build solutions in India.
  • As per F&S, the firm is one of the leading domestic EMS companies with end-to-end capabilities offering a full stack product and solution suite.

EQT/Va-Q-Tec: Generous Agreed Offer

By Jesus Rodriguez Aguilar

  • The acceptance period for EQT’s €26/share offer (46% premium, 16.1x EV/23eEBITDA) runs until 16 February. Minimum acceptance is 62.5% (49.4% of the float). EQT intends to implement a domination agreement.
  • The deal makes sense from a strategic standpoint, although there are potential antitrust issues. The price offered seems generous considering my fair-value estimate of €18.67 (DCF-based).
  • Gross spread is 3.7% (8.6% estimated annual return assuming settlement by 30 June), which is okayish for a not so liquid stock in the European space. Long.

Shenzhen Intl (152 HK): Numerous Drivers in Place to Boost FY23

By Osbert Tang, CFA

  • Share price of Shenzhen International (152 HK) started slow in this year, but it is on course for stronger earnings in FY23, following a dip in last year. 
  • Upside from logistics business, benefits to Shenzhen Expressway (548 HK) on border re-opening, potential massive contribution from logistics parks transformation and upgrading and lack of Shenzhen Airlines’ drag are drivers. 
  • ROE is expected to rebound to 11-12% in next two years, returning to FY20-21 level. Back then, its average P/B was 0.68x, suggesting at least 31% upside from 0.52x currently. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars