In today’s briefing:
- HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- SET50 Index Rebalance Preview: Market Consultation & More Changes in June
- Hesai Group: Time To Cover Shorts As The Stock Found A Bottom and Delisting Risk Is Real
- Air China (753 HK): Steering Back to the Right Lane
HD Hyundai Marine Solution (443060 KS) IPO: No Passive Buying Near-Term
- HD Hyundai Marine Solution (443060 KS) is looking to raise KRW 742bn (US$540m) in its IPO, valuing the company at KRW 3,707bn (US$2.69bn). Listing is expected to be in early-May.
- Competition for the shares has been fierce with institutional investors indicating demand for 201x the number of shares on offer at prices higher than the top end of the range.
- Barring a doubling of the stock price, the earliest that the stock will be added to major indices is December 2024. So, no passive buying in the short-term.
SET50 Index Rebalance Preview: Market Consultation & More Changes in June
- The SET has run a market consultation on relaxing liquidity thresholds for inclusion of stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) universe.
- The consultation is the result of an increase in Average Daily Trading Values and lower turnover ratios, especially for large cap stocks.
- Berli Jucker (BJC TB) is now a potential index inclusion in June and that could result in four constituent changes at the next rebalance.
Hesai Group: Time To Cover Shorts As The Stock Found A Bottom and Delisting Risk Is Real
- Hesai Group, one of the global leaders in the LiDAR and perception solutions market, completed its IPO in February 2023 and listed ADSs on the Nasdaq Global Select Market.
- The stock peaked at $30+ during the first trading day and fell ~67% over the following 8 months as selling pressure intensified and investor sentiment worsened.
- The stock has taken another leg down following U.S. DoD’s decision to include Hesai Group in 1260H list of Chinese military-linked companies. Hesai believes this inclusion is unjust and meritless.
Air China (753 HK): Steering Back to the Right Lane
- Losses at Air China Ltd (H) (753 HK) narrowed by 42.8% YoY to Rmb1.67bn in 1Q24. If not for the exchange losses, it will be reduced to below Rmb1bn.
- Higher jet fuel prices have dragged result despite record 1Q revenue. However, an 8.3pp YoY margin expansion and a 4% decline in unit costs indicated profitability is climbing.
- Valuations are too depressed as the share price is still lacklustre but quarterly losses and gross margin have already trimmed from the troughs of Rmb10.5bn and -98%, respectively.
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