In today’s briefing:
- Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
- Lonking (3339 HK): Back to Attractive Zone
- Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
- Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report
Weekly Deals Digest (16 Apr) – Lian Beng, Arcland, Essential, Genesis, Newcrest, Rakuten Bank, ZJLD
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Rakuten Bank (5838 JP), ZJLD Group (ZJLD HK), Mankind Pharma (6596876Z IN) and Merdeka Battery Materials (2012725D IJ) IPOs.
- Event-Driven developments – Lian Beng (LBG SP), Arcland Service (3085 JP), Essential Metals (ESS AU), Genesis Minerals (GMD AU), Healius (HLS AU), Newcrest Mining (NCM AU).
Lonking (3339 HK): Back to Attractive Zone
- After a poor FY22, 1H23 will stay challenging for Lonking Holdings (3339 HK). However, we expect pick-up in business momentum going forward, and export is a major growth driver.
- Gross margin rebounded HoH and YoY in 2H22, and Lonking maintained good operating cost control. Recovery of equity market suggests potential big positive swing in investment income.
- Including investment portfolio, 92% of the current market capitalisation is net cash, providing solid downside buffer. Its 6.5x PER, 9.2% yield and 0.52x P/B are very attractive valuations.
Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
- Baycurrent reported fourth quarter and full-year FY02/2023 results on Friday. 4Q revenues increased 32.1% YoY to ¥21.2bn (vs consensus ¥20.7bn) and OP increased 60.8% to ¥9.6bn (vs consensus ¥8.3bn).
- Full-Year revenue and OP increased 32% and 39% YoY respectively to ¥76.1bn and ¥29.9bn, beating own guidance by 7% and 15% respectively.
- The company’s FY02/2023E guidance is too conservative as there has been no signs of an earnings slowdown as DX consulting and high-value add projects would drive next phase of growth.
Liquid Universe of European Ordinary and Preferred Shares: April ‘23 Report
- Since mid-March, spreads have generally tightened across our liquid universe (6 have widened, 12 tightened, 1 at same level).
- Possible trades long ordinary / short preferred shares: Fuchs Petrolub, Henkel, Handelsbanken, SSAB Svenska Stal.
- Possible trades long preferred / short ordinary shares: Sixt, VW, Danieli, Grifols, Atlas Copco.
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