In today’s briefing:
- Japan – A Last Look at Shorts on Some Interesting Stocks & Positioning
- Korean Air (003490 KS): Cheap, but a Value Trap
- India Industrials | Quarterly Update – ABB India, Siemens, Polycab and Havells
- Taking off from Heathrow
- Sino-Synergy Hydrogen IPO – High Potential but Comes with Ample Issues
Japan – A Last Look at Shorts on Some Interesting Stocks & Positioning
- There should be liquidity events on Persol Holdings, Hakuhodo Dy Holdings, Welcia Holdings, GMO Payment Gateway, CyberAgent, Kobayashi Pharmaceutical, NGK Insulators, Lixil Group, Kurita Water Industries and Keio Corp tomorrow.
- On average, the stocks have underperformed the Nikkei 225 Index over the last 2-3 months but there has been near-term outperformance.
- There has been a big increase in shorts on the stocks over the last couple of months and positioning varies across stocks.
Korean Air (003490 KS): Cheap, but a Value Trap
- Korean Air Lines (003490 KS) is cheap, against peers and its own history. The impending merger with Asiana Airline is a major overhang
- Business is good, with steady passenger loads and yields, and cargo showing decent signs of recovery. Lower fuel prices could surprise on the upside
- Target Price KRW23,868 based on FY24 P/BV of 0.81x (1SD below mean). Too little upside for the level of uncertainty. PASS
India Industrials | Quarterly Update – ABB India, Siemens, Polycab and Havells
- In this Insight, we review the recent performance of ABB India Ltd (ABB IN) , Siemens Ltd (SIEM IN) , Polycab India (POLYCAB IN) and Havells India (HAVL IN).
- Most companies have performed in line with our expectations, we expect sectorial dynamics to remain in play.
- We continue to favour ABB over Siemens (ABB/SIEM), Polycab over Havells (POLYCAB/HAVL).
Taking off from Heathrow
- Ferrovial Sa (FER SM) announces the sale of its 25% stake in Heathrow Airport Holdings for £2,368 million (valued at zero in its books), far exceeding my valuation of €1,617 million.
- With the operation, Ferrovial will be able to invest in more lucrative new infrastructure projects than Heathrow (a mature asset). Ferrovial is focused on growth in North American greenfield projects.
- The divestment should have a positive impact of 4.7% on Ferrovial’s consensus target price, which increases to €34.55/share vs. €33/share previously, which implies a revaluation potential of 9.5%.
Sino-Synergy Hydrogen IPO – High Potential but Comes with Ample Issues
- Sino-Synergy Hydrogen Energy Technology (9663 HK) (SHET) is looking to raise around US$200m in its Hong Kong IPO.
- SHET is a hydrogen fuel cell company in the PRC focusing on research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems.
- In this note, we will look at the company’s background and talk about valuations.
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