In today’s briefing:
- [JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- KOSPI 200 & KOSDAQ 150 December Rejig Lineup
- Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout
- KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
- SF Holding HKEx Listing: Peer Comparison and Valuation
- Asian Dividend Gems: Teco Electric & Machinery
- Sunrun Inc.: An Insight Into Its Inflation Reduction Act & Bipartisan Support & Other Major Drivers
- Adani Ports – Event Flash – US Charges Gautam Adani And 2 AGEL Executives – Lucror Analytics
- Sanyo Trading (3176 JP) – Conservative FY9/25 Guidance with Potential Avenues to Enhance Returns
- Full Truck Alliance Q324 Results: Great Numbers, But Limited Upside Here | BUY Closer to US$8
[JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- Mitsui Matsushima (1518 JP) was trading ¥2,800-3,200 earlier this year before Murakami-san bought a large stake. All the news of coal shut down and cash pile were in the price.
- After he bought, the stock popped. It fell back, went sideways in a range, and for 5 weeks has been falling in a straight line.
- There’s a reason for that. But it may not be a great reason. And the stock is in a great place.
KOSPI 200 & KOSDAQ 150 December Rejig Lineup
- KOSPI 200 & KOSDAQ 150 Dec reshuffle looks set—official lineup drops post-close today.
- Passive flows for KOSPI 200 and KOSDAQ 150 are estimated at 40T KRW and 3.5T KRW, based on typical flow sizes until the effective date.
- These predictions combine my sim results with reliable local intel. The accuracy’s solid enough to start pulling the trigger on trades.
Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout
- Gautam Adani and executives indicted in U.S. for bribery, fraud, and obstructing justice tied to renewable energy projects worth billions.
- Allegations spotlight governance risks, promoter-driven models, and transparency issues in Indian conglomerates, threatening investor trust in Adani Group and renewable energy sectors.
- Adani Group issued media statement saying that charges in indictment are baseless and denied.
KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
- There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
- The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
- The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.
SF Holding HKEx Listing: Peer Comparison and Valuation
- Chinese logistics service provider SF Holding has filed for a listing on HKEx and seeks to raise HK$6.2bn (US$795m) through the issuance of 170m shares (3.4% of outstanding shares).
- The listing is priced at HK$32.3-36.3 per share, as expected at a 20-29% discount to the last closed price of SF Holding’s A-Shares on 18th November.
- Our valuation analysis suggests that SF Holding’s HK offering is attractive at the lower end of the indicative IPO price range.
Asian Dividend Gems: Teco Electric & Machinery
- Teco Electric & Machinery (1504 TT) is one of the leading companies in Taiwan that specialize in electrical machinery and industrial automation.
- Teco Electric & Machinery provides high dividend payout and solid dividend yield. From 2020 to 2023, the company’s dividend payout and dividend yield averaged 72.9% and 4.6%, respectively.
- The company is one of the beneficiaries from the need to upgrade the global energy distribution and storage networks to support the higher usage of AI in the coming years.
Sunrun Inc.: An Insight Into Its Inflation Reduction Act & Bipartisan Support & Other Major Drivers
- Sunrun’s third-quarter earnings report for 2024 presents an intricate picture of the company’s operational and financial landscape amid both progress and challenges in the renewable energy sector.
- On the positive side, Sunrun achieved a significant milestone by reaching over one million customers, marking a substantial increase in its customer base.
- The company’s focus on expanding its storage offerings is noteworthy, with 60% of new customers opting for storage packages, a notable rise from the previous year’s 33%.
Adani Ports – Event Flash – US Charges Gautam Adani And 2 AGEL Executives – Lucror Analytics
- The US indictment of key executives is a material credit negative for the Adani Group, with the allegations being more serious than those from Hindenburg Research’s short-sell report in January 2023.
- In the near term, the US indictment is likely to constrain the group’s access to financing, particularly in the offshore market.
- We note that the Justice Department’s charges are directed at the individual executives, not at Adani Green Energy or other group entities.
Sanyo Trading (3176 JP) – Conservative FY9/25 Guidance with Potential Avenues to Enhance Returns
- Firm results with a reserved outlook – Q1- 4FY9/24 results were ahead of guidance and highlighted that Q4 FY9/24 trading was in line with expectations, in contrast to a strong start to the year.
- The company made positive developments in improving the sales mix in the Chemicals and Overseas Subsidiaries segments and has increased FY9/24 DPS to ¥55 from the previously guided ¥45, which was a positive surprise.
- Guidance for FY9/25 appears to be conservative in our view. Nevertheless, it telegraphs a slowdown in earnings momentum and mixed earnings visibility with an expected slowdown from life science activity at subsidiary SCRUM Inc., balanced with contributions from large projects in the wood biomass-related business.
Full Truck Alliance Q324 Results: Great Numbers, But Limited Upside Here | BUY Closer to US$8
- Q324 revenue growth exceeded guidance, rising 33.9% Y/Y vs guidance of 22-25%
- Improved revenue mix and effective OpEx control contributed to higher margins
- Now close to US$10/ADS, we would wait for an opportunity to buy closer to US$8
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