Daily Brief Industrials: Keisei Electric Railway Co, Grab Holdings , Hyundai Electric & Energy, Superloop Ltd, Kier Group PLC, Alight and more

• Keisei Electric (9009 JP) has been an outperformer since activist fund Palliser Capital called on the company sell some Oriental Land (4661 JP) shares. It has now announced another buyback.
• Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Grab Holdings reported nothing short of an impressive set of results for 4Q2023, booking another positive adjusted EBITDA but also an actual net profit and positive adjusted cash flow. 
• The company saw its mobility GMV come in above pre-COVID levels and deliveries GMV growth reaccelerated, while also reaching positive adjusted EBITDA for a second quarter.
• Grab aims to deepen its engagement with users through affordable and premium offerings and a laddered pricing approach, with additional focus on financial services and advertising to come in 2024.

• The review period for the March rebalance of the KOSPI Size Indices started 1 December and will end 29 February. The changes will be implemented at the close 14 March.
• We see 3 migrations from MidCap to LargeCap, 4 new adds to LargeCap, 7 migrations from LargeCap to MidCap, and 11 migrations from SmallCap to MidCap.
• On average, stocks migrating from SmallCap to MidCap have the lowest price to book value and have historically outperformed stocks migrating between other categories.

• The hunter becomes the hunted. After Superloop (SLC AU) failed to clinch Symbio Holdings (SYM AU) last year, Aussie Broadband (ABB AU) has now made an Offer for Superloop.
• ABB’s indicative Offer provides Superloop shareholders with 0.21 new ABB shares for each Superloop share held, or an indicative Offer price of A$0.95/share, a 33.2% premium to the three-month VWAP.
• ABB has picked up 19.9% in Superloop, also at A$0.95/share. Superloop has yet to respond.  

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the March 2024 index rebal event.
• I see one change for the F100 index and two other changes for the F250 index. There could be more as there are many names close to the border.
• There are also a couple of potential intra-review changes expected in the next few weeks for LXI REIT (LXI LN) and Network International Holdings (NETW LN) 

Key points

• Alight has experienced strong organic revenue growth through recurring revenue contracts and acquisitions
• Concerns have been raised about stagnant gross margins, adjusted EBITDA margins, management turnover, and stakeholder selling
• Accounting validation issues further complicate the company’s financial standing and could potentially impact the stock price negatively

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.