Daily Brief Industrials: Helios Techno Holding, Tatsuta Electric Wire & Cable, Samsung C&T, Bharat Heavy Electricals, Beijing Capital International Airport (BCIA), GiG Works, Kirby Corp and more

• Rs Technologies (3445 JP) announced a TOB on Helios Techno Holding (6927 JP) 12 days ago. At a 74% premium, but that was too cheap. I discussed it here.
• Shares went limit up for two days then traded huge volume the first full day last Wednesday. The lowest trade so far in open trading is 3% through terms.
• 57% of Shares Out Ex-Treasury have traded in five days. Anyone who bought 5% on Day 1 has to file a Large Shareholder Report today.

• ENEOS Holdings (5020 JP) announced a deal to buy out their affiliate Tatsuta Electric Wire & Cable (5809 JP) 18 months ago. The TOB was expected to start June 2023.
• June 2023 came around and China’s SAMR still hadn’t approved. ENEOS provided quarterly updates in Sep and Dec and monthly updates since. The May update was different. 
• The May update cut the “re-update” schedule to mid-month June. There are reasons to look at what has changed since the Dec 2022 announcement. 

• 18 months after announcing the offer, ENEOS Holdings (5020 JP) secured SAMR approval for the Tatsuta Electric Wire & Cable (5809 JP) tender offer at JPY720 per share.   
• The tender offer is expected to be launched on 21 June, subject to securing the recommendation from the special committee and the Board.
• A bump is required due to the material market rerating since 21 December 2022. An offer of JPY828, a 15.1% premium to the current offer, implies a P/B of 1x.  

• On 11 June, the FSC announced that the restrictions on allocation of treasury shares as new shares post spin-offs is expected to be made into law in 2H 2024.
• Meanwhile, starting 1 July, the financial regulators will make it more difficult for Korean companies to conduct spin-offs that have separate allocation of treasury shares as new shares.
• The top five stocks with highest percentage of treasury shares/outstanding shares are up on average 40.5% YTD. 

• With a substantial part of the review period complete, there could potentially be 7 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September.
• Estimated one-way turnover is 17.7% resulting in a one-way trade of INR 47.2bn (US$566m). 8 stocks will have over 1x ADV to trade from passive trackers.
• There are a bunch of stocks that are potential migrations between Mid Cap and Large Cap segments in the AMFI Classification system and there will be flows from active managers.

• The worst is behind Beijing Capital International Airport. We believe it is on track to achieve breakeven on quarterly basis in 2H24.
• We see recent parking fee hikes at Daxing Airport as a signal that more will come, which is not in the price and can bring in extra option value.
• Boom-And-Bust in China property sector is behind the airport’s share price cycle. The airport is at the cusp of a steady recovery driving mean reversion of valuation .

• Revenue: JPY13.0bn (-3.8% YoY); Operating profit: JPY185mn (+564.7% YoY); Recurring profit: JPY181mn (+449.7% YoY); Net income: JPY65mn (+67.6% YoY).
• Revenue: JPY5.5bn (-8.0% YoY); Operating profit: JPY475mn (+22.4% YoY); Segment profit margin: 8.7% (+2.2pp YoY).
• Revenue: JPY2.3bn (+19.9% YoY); Operating profit: JPY232mn (JPY104mn loss in 1H FY10/23); Segment profit margin: 9.9%.

• Kirby Corporation (KEX) is undervalued and has a strong historical performance in the tugboat and tank barge industry
• Despite industry challenges including oversupply and Covid-19 impacts, KEX is expected to benefit from rising demand and falling supply
• With a recession-resilient track record and potential for earnings growth, KEX presents a compelling long-term investment opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.