In today’s briefing:
- KLINE (9107) – More Profit, More Shareholder Return 3mo Buyback Inbound
- Chilled & Frozen’s Target Opinion Statement; Chotto Matte (Four Counterbidders)
- Namoi Cotton (NAM AU): Bloom Times As Louis Dreyfus & Olam Agri Tangle
- Singamas (716 HK): Net Cash 1.6x of Market Cap, Why Not Privatise?
- Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight
- Singapore Airlines – 4Q Likely to Extend the Theme of Earnings Normalization as FY25 Comes into View
- TWI: Titan announces 1st quarter 2024 results and updates the investor community on industry conditions.
KLINE (9107) – More Profit, More Shareholder Return 3mo Buyback Inbound
- Kawasaki Kisen Kaisha (9107 JP) today announced earnings. Ocean Network Express earnings were out earlier and beyond that, Consolidated Revs beat, OP faltered, but NP was spot on guidance.
- Guidance for the year to March 2025 is well ahead of consensus on revenue, slightly ahead on OP, and just a wee bit ahead on NP.
- But the company raised its 5yr MTMP Shareholder Return from ¥500bn to ¥700bn and set a new ¥100bn (5.5%) buyback to be executed in the next 3 months.
Chilled & Frozen’s Target Opinion Statement; Chotto Matte (Four Counterbidders)
- Today, after the close, Chilled & Frozen Logistics Holdings (9099 JP) released a required (by the FIEA) Target Opinion Statement saying “Opinion Withheld.”
- C&F notes that it had received 9 possible counter-proposals, offered due dili to a certain extent, and by May 1, had 4 binding offers.
- There are interesting competitive dynamics at play here, but cross-holding concentration matters. The question is… How much is enough?
Namoi Cotton (NAM AU): Bloom Times As Louis Dreyfus & Olam Agri Tangle
- Singapore’s Olam Agri and global commodity merchant Louis Dreyfus Company (LDC) are duking it out for Namoi Cotton Co Operative (NAM AU), Australia’s largest cotton producer.
- After both initially lobbed competing Schemes, both have now tabled off-market Offers – A$0.67/share from LDC, A$0.66/share from Olam – each contingent on a 50.1% acceptance hurdle, FIRB, and ACCC.
- LDC, currently holding 17%, announced it will reject Olam Agri’s Offer. Top shareholder Samuel Terry Asset Management, with 24.5%, is expected to support the winning (or superior) bid.
Singamas (716 HK): Net Cash 1.6x of Market Cap, Why Not Privatise?
- Singamas Container Holdings (716 HK) is interesting in that it has a net cash of US$300m (HK$2.35bn), but its market capitalisation is only HK$1.5bn.
- This is a possible privatisation candidate given the steep discount to cash. The thin trading volume made it difficult to function as a financing platform.
- Business-Wise, it should have passed the trough as global container box plant utilisation is expected to improve in the next two years, driving profitability recovery.
Major Risk-On Developments; Bullish Outlook Intact; Downgrading Health Care $XLV to Underweight
- Over the past two weeks we’ve discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
- Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
- We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&P 500 as healthy/normal within the ongoing bull market.
Singapore Airlines – 4Q Likely to Extend the Theme of Earnings Normalization as FY25 Comes into View
- We expect Singapore Airlines to report a disappointing 4Q24 on 15 May, as earnings normalisation continues.
- Inflationary pressure is a key theme at SIA, with it suffering one of the highest levels of inflation in the APAC region.
- Our forecasts for FY25, which suggest further earnings normalisation, are c.20% below consensus at the operating level.
TWI: Titan announces 1st quarter 2024 results and updates the investor community on industry conditions.
- Titan International is a global manufacturer of off-the-road tires, wheels and undercarriages.
- The company serves the agricultural, earthmoving / construction, and consumer markets.
- Recent strategic actions have created higher margins in recent years and brought the leverage ratio down to 2.0x.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
