In today’s briefing:
- Hyundai Heavy Industries Block – Not Well Flagged and Recent Korean Deals Haven’t Done Well
- Business On The Fly: Malaysia Airports (MAHB MK)’s RM11.00/Share Offer
- Block Deal Sale of 3% Stake in HD Hyundai Heavy Industries
- Mitsui E&S – Near Record ROE as Profit Continues to Expand From Multiple Drivers
- Nissin Corp (9066) – A Dirt Cheap $400m JP Logistics Company…
- Cummins Inc.: These Are The 6 Biggest Factors Influencing Its Performance In 2024 & Beyond! – Financial Forecasts
- Qantm Intellectual Property – Binding offer of $1.817/share accepted
- Xylem Inc.: Maximizing Value Through Integration! – Major Drivers
- EasyJet – Lower Pricing and Fuel Costs Leave Earnings Forecasts Intact – Winter Losses Revisited
- Howmet Aerospace Inc.: Adapting To Dynamics In The Fastener Business! – Major Drivers
Hyundai Heavy Industries Block – Not Well Flagged and Recent Korean Deals Haven’t Done Well
- HD Korea Shipbuilding & Offshore Engineering (009540 KS) is looking to raise approximately US$258m, via selling 2.6m shares (2.9% of TSO) of HD Hyundai Heavy Industries (329180 KS) stock.
- The deal is a large one to digest at 14.6 days of three month ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Business On The Fly: Malaysia Airports (MAHB MK)’s RM11.00/Share Offer
- Khazanah Nasional, the EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners, are offering to buy all shares not already owned in Malaysia Airports Holdings (MAHB MK) at RM11.00/share.
- The pre-conditional voluntary Offer price is a 5.77% premium to last close; but a life-time high. The Offeror consortium collectively holds 41.22% of shares out.
- The pre-cons include regulatory approvals (in Malaysia, Turkey, Saudi Arabia, and Egypt). The Offer is subject to a 90% acceptance condition; which may be reduced.
Block Deal Sale of 3% Stake in HD Hyundai Heavy Industries
- HD Korea Shipbuilding & Offshore Engineering (009540 KS) plans to sell 2.66 million shares (3% of outstanding shares) of HD Hyundai Heavy Industries (329180 KS) in a block deal sale.
- We would avoid participating in this block deal sale and we have a Negative view of HD Hyundai Heavy Industries (329180 KS) over the next one year.
- After this block deal sale, we believe there could be concerns about HD Korea Shipbuilding & Offshore Engineering potentially selling additional shares of HD HHI in the next 2-3 years.
Mitsui E&S – Near Record ROE as Profit Continues to Expand From Multiple Drivers
- Profit continues to expand at Mitsui E&S after its transition to a holding company, now reporting over 400% profit growth for 9 months YTD.
- The company is doing well to keep its operating costs down, with an improving funding structure and balance, as its revenue grows more than COGs.
- We wonder if there will be more revisions upward to profit, with new initiatives and with a more proven recent track record.
Nissin Corp (9066) – A Dirt Cheap $400m JP Logistics Company…
- Nissin Corp (TYO 9066) bought back 23.6% of their outstanding shares in a single day on May 10th and also doubled their dividend.
- The result? The stock went up about 39% (up 72% YTD).
- I already had a full sized position in Nissin Corp and despite being up big on it I added to my position at ¥4,265.
Cummins Inc.: These Are The 6 Biggest Factors Influencing Its Performance In 2024 & Beyond! – Financial Forecasts
- Cummins Inc.’s Q1 2024 financial results revealed a decrease in revenues compared to Q1 2023, standing at $8.4 billion compared to the previous year’s $8.44 billion.
- This decrease was, however, marginal at 1%.
- EBITDA in Q1 2024 was doubled that of Q1 2023, being $2.6 billion or 30.6% compared to the previous year’s $1.4 billion or 16.1%.
Qantm Intellectual Property – Binding offer of $1.817/share accepted
- QANTM Intellectual Property Ltd (ASX:QIP) has announced it has entered into a binding Scheme of Arrangement for an entity associated with Adamantem Capital to acquire all its shares for $1.817/share.
- Shareholders will have the opportunity to elect to receive 100% cash or a combination of 50% cash, 50% scrip, subject to a scrip issuance cap of 24%.
- The QANTM board can elect to pay a special dividend of up to $0.071/share, which will be included in the offer price and enable shareholders who are eligible to benefit from franking credits of up to $0.03/share.
Xylem Inc.: Maximizing Value Through Integration! – Major Drivers
- On the optimistic front, Xylem reported a formidable first-quarter, outperforming expectations across revenue, margin, and earnings per share.
- Xylem’s team led high single-digit organic revenue growth attributed to evenly distributed volume and price.
- Furthermore, they achieved an almost 300 basis points expansion in adjusted EBITDA margin, driving EPS growth of 14%.
EasyJet – Lower Pricing and Fuel Costs Leave Earnings Forecasts Intact – Winter Losses Revisited
- EasyJet on track for record summer performance, helped by lower fuel prices.
- However pricing growth moderating and growth itself may be fizzling out.
- Winter losses remain highly elevated and we publish new analysis identifying the root causes.
Howmet Aerospace Inc.: Adapting To Dynamics In The Fastener Business! – Major Drivers
- Howmet Aerospace has reported an impressive first quarter for 2024, with record revenue, earnings per share, profit, and margin all improving from last year’s figures.
- However, there have been some challenges that the company faced, particularly related to the FAA restrictions on the Boeing 737 MAX production.
- Despite these challenges, Howmet Aerospace has managed to effectively plan its strategies and make necessary adjustments to continue its growth trajectory.
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