In today’s briefing:
- Golden Energy & Resources: Widjaja Family Betting Ridiculous Cashflow Continues
- MSCI Korea November SAIR: Potential Deletes Continue to Slide
- MSCI Korea: Potential Inclusions & Exclusions in November 2022 Highlighted by Locals
- Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak
- PTB Scheme Meeting on 16 November
- BEM : Expect 3Q22 Earnings to Hit 12 Quarter High
- Fortive Corporation: Initiation of Coverage – The Provation Acquisition & Other Drivers
Golden Energy & Resources: Widjaja Family Betting Ridiculous Cashflow Continues
- Golden Energy & Resources (GER SP), an Indonesian/Australian energy/met coal play, may be subject to an acquisition from its controlling shoulder, the Widjaja Family.
- GEAR reported 1H22 (to June) earnings of US$279mn, an 859% gain yoy, as contributions from the newly acquired stake in an Australian coal mine from BHP (BHP AU) kicked in.
- The family is potentially betting on one to two more years of outsized cashflow as the world’s coal habit remains healthy.
MSCI Korea November SAIR: Potential Deletes Continue to Slide
- With a week to the start of the review period, we forecast one inclusion and a lot more deletions for the MSCI Korea Index at the November SAIR.
- The impact from passive fund trading is pretty large on the potential and close deletes while the impact is a lot more muted on the sole potential add.
- There will be pre-positioning on most of the names already and part of that shows up in sharply higher short interest on a few stocks.
MSCI Korea: Potential Inclusions & Exclusions in November 2022 Highlighted by Locals
- We discuss the potential inclusions and exclusions in the next MSCI Korea Index rebalance announcement (10 November) that are being highlighted by the locals.
- The potential inclusion candidates in the MSCI Korea Index emphasized by the locals in November 2022 include Hyundai Mipo Dockyard (010620 KS) and Hanwha Aerospace (012450 KS).
- Potential exclusion candidates include Seegene Inc (096530 KS), Meritz Financial Group (138040 KS), and Green Cross (006280 KS).
Toshiba (6502) – JIP Gets Preferred Bidder Status and We Get The First Price Leak
- Overnight, a few news outlets are running with the story that Toshiba Corp (6502 JP) has granted “preferred bidder” status to the Japan Industrial Partners (JIP)-led consortium bid.
- JIP had originally signed up with public-private fund JIC, forming one of the four bids (the other three being CVC, Bain, and Brookfield) but JIP and JIC split last month.
- “Preferred Bidder status” is just that. It’s not exclusive, but one can read between the lines. But the articles have interesting details, including the first trial ballon price leak.
PTB Scheme Meeting on 16 November
- PTB Group Ltd (PTB AU)‘s scheme meeting is on 16 November. The IE considers the offer of A$1.595 + dividend up to A$0.03 per share (total of A$1.625) fair.
- The key condition is approval from shareholders – headcount test and approval by at least 75% of the votes cast on the resolution. The two largest shareholders will vote YES.
- We continue to think that offer is attractive. At the last close price and for the 9 December payment, the gross and annualised spread is 2.2% and 13.8%, respectively.
BEM : Expect 3Q22 Earnings to Hit 12 Quarter High
- Maintain BUY recommendation for BEM with a new target price of Bt11.40 (Previous TP: Bt9.90) after we incorporate value from orange line project into our valuation. We expect the company
- Expect solid profit recovery in 3Q22 and onwards Expect BEM’ revenue in 3Q22 to touch Bt3.6bn (+69%YoY +12%QoQ) supported by solid rebound in daily average MRT ridership to 313k trips
- Gross profit margin is assumed to expand to three-quarter high at 42% thanks to benefit from high operating leverage,which should help absorb the impact from an increase in MRT revenue
Fortive Corporation: Initiation of Coverage – The Provation Acquisition & Other Drivers
- This is our first report on Fortive Corporation, a leading provider of provider of essential technologies for connected workflow solutions.
- Fortive delivered an all-around beat as software ARR and hardware orders both increased, reflecting a more diversified and resilient product portfolio.
- In the quarter, orders and demand remained strong despite the rising FX headwinds and higher inflation.
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