In today’s briefing:
- Jardine Matheson (JM SP): MSCI Blues
- POSCO International + POSCO Energy = A Value Enhancing M&A Deal
- Bangkok Express and Metro (BEM): Marching On
Jardine Matheson (JM SP): MSCI Blues
- Jardine Matheson Holdings (JM SP) (JMH) has shed ~8% since MSCI said it was cutting the conglomerate’s weighing in two indices.
- The reweighting follows the cancellation of the 59% shareholding in JMH held by Jardine Strategic Holdings (JS SP), which was privatised last year.
- I see the discount to NAV at ~40%, right at the 12-month -2 STD level. JMH bought back ~149mn shares in the 1Q22, paying ~US$59/share, 17% above the current price.
POSCO International + POSCO Energy = A Value Enhancing M&A Deal
- On 12 August, Posco International stated that it plans to merge with one of POSCO Holdings’ energy affiliate called POSCO Energy which is a major LNG provider in Korea.
- We believe the merger between POSCO International and POSCO Energy is value enhancing. The shareholders of POSCO International are getting a sweet deal in POSCO Energy at attractive valuations.
- This M&A deal is likely to boost the market cap of the combined companies and raise the rank of POSCO International in important indices such as KOSPI200.
Bangkok Express and Metro (BEM): Marching On
- Q2 22 result was healthy derived from both increase in ridership as well as ASP in both expressway and rail.
- Cost increase but not as high as revenue increase therefore margin expanded while net profit went up 3x YoY. 2H 2022 will be even better.
- Compared to AOT, BEM’s PBR is 63% cheaper while its share price still underperformed AOT this year by 11%.
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