In today’s briefing:
- Namoi Cotton (NAM AU): Louis Dreyfus Has This Stitched Up
- Hankook Tire & Technology: M&A of Hanon System Falling Apart?
- Japan Airport Terminal (9706 JT): Share Price Correction Overdone, Now a Value BUY
- Comfortdelgro (CD): 1H Decent Result
- Amaero International Ltd – Capex programme extended, guidance for FY26 break even
- Jiangsu Zenergy Battery Technologies Pre-IPO Tearsheet
- More Q224 Container Carrier Results: Evergreen, Hapag-Lloyd Show Sharply Diverging Results
- Careerlink (6070 JP): Q1 FY03/25 flash update
- XPON: Updating our estimates to reflect the higher share count post-offering and second-quarter results. Adjusting target to 0.25/share to reflect lower energy storage market valuations.
- Japan Elevator Service Holdings (6544) – Q1 FY3/25 Results Update
Namoi Cotton (NAM AU): Louis Dreyfus Has This Stitched Up
- Since Louis Dreyfus Company (LDC) first announced a A$0.51/share Offer, by way of a Scheme, on the 28 November 2023, and Olam Agri countered, there have been significant developments.
- Both suitors have now tabled off-market Offers (A$0.67/share from LDC, and A$0.70/share from Olam Agri). Both Offers are open for tendering. Both have extended their closing dates numerous times.
- And both suitors have also faced ACCC scrutiny. As of today, only LDC, currently holding a 20.2% stake in Namoi, is in the clear.
Hankook Tire & Technology: M&A of Hanon System Falling Apart?
- There are increasing signs that Hankook Tire & Technology’s M&A of Hanon Systems could be falling apart.
- The deadline for signing the main M&A contract to purchase a 25% stake in Hanon Systems has been postponed indefinitely.
- New contingent liabilities at Hanon Systems have been uncovered during the 10 week due diligence process of Hanon Systems by Hankook T&T.
Japan Airport Terminal (9706 JT): Share Price Correction Overdone, Now a Value BUY
- Japan Airport Terminal Co (9706 JP) (JAT) share price was deeply affected by Japan Black Monday rout, and is starting to stage a recovery.
- JAT is now looking cheap against other global airports and also against its own history based on P/E, EV/EBITDA, and P/BV.
- Our fair value is JPY6,050 derived from global airport peers average 2025 EV/EBITDA of 11.6x, this implies an UPSIDE of 21%. Despite the share price run-up, still good upside opportunity.
Comfortdelgro (CD): 1H Decent Result
- 1H 24 result was not disappointing, as OPM improved thanks to a few supportive measures that boosted revenue.
- Taxi operating profit margin has improved since 2H 23 and is still producing a higher number than last year, thanks to the ZIG app service charge.
- Comfortdelgro Corp (CD SP) is now trading at 1.2x PBR against 2x PBR 5 years ago pre COVID.
Amaero International Ltd – Capex programme extended, guidance for FY26 break even
- RaaS Research has published an update report on advanced materials manufacturing group Amaero International (ASX:3DA) following its market update in which it guided to FY26 break-even and provided more granularity on its FY24 to FY26 capital expenditure progrramme.
- Amaero has provided an update to shareholders including changed guidance on when it expects to reach EBITDA break-even (six months later), a revised capex schedule and the milestones it expects to pass over the next six-to-12 months (same in quantum but timing changes).
- The company emphasised that the completion of C103 qualification by Amaero’s offtake counterparty (whom we believe is US defence giant Castheon) is the single most significant milestone in the company’s history.
Jiangsu Zenergy Battery Technologies Pre-IPO Tearsheet
- Jiangsu Zenergy Battery Technologies (JSZENERGY CH) is looking to raise up to US$300m in its upcoming HK IPO. The deal will be run by CICC, and CMB International.
- Jiangsu Zenergy Battery Technologies (Zenergy from hereon) is an EV and energy storage system (ESS) battery manufacturer in China.
- It provides integrated battery solutions, encompassing battery cells, modules, packs, racks, and battery management systems dedicated to large-scale applications of electrochemical products to interconnect omni-scenarios of land, sea and air.
More Q224 Container Carrier Results: Evergreen, Hapag-Lloyd Show Sharply Diverging Results
- Evergreen reported strong Q2 results, with revenue and margins both up sharply
- Meanwhile, Hapag-Lloyd reported stagnant revenue and lower core profit margins
- Divergent carrier performance reinforces our view that management skill matters
Careerlink (6070 JP): Q1 FY03/25 flash update
- Revenue: JPY10.2bn (-10.6% YoY), Operating profit: JPY827mn (nearly flat YoY), Net income: JPY565mn (+6.7% YoY).
- Business Process Outsourcing section: Revenue: JPY6.2bn (-16.2% YoY), Customer Relationship Management section: Revenue: JPY766mn (-34.7% YoY).
- Office Services section: Revenue: JPY1.4bn (+11.0% YoY), Food Processing category: Revenue: JPY1.7bn (+17.6% YoY), Operating profit: JPY59mn (+64.6% YoY).
XPON: Updating our estimates to reflect the higher share count post-offering and second-quarter results. Adjusting target to 0.25/share to reflect lower energy storage market valuations.
- Expion360 released full results for the second quarter which had been prereleased in the registration statement related to the recent $10 million financing and were just slightly below our expectations.
- The company provided no formal guidance for 2024 and 2025 but the new home energy storage business will have to be wildly successful to avoid further (potentially significant) dilution to existing shareholders.
- As we have seen in the past Expion360’s shares frequently trade independent of the fundamentals of the business.
Japan Elevator Service Holdings (6544) – Q1 FY3/25 Results Update
- Q1 FY3/25 results demonstrated a strong start to the FY, with high double-digit growth for both sales (+20.9% YoY) and OP (+39.1% YoY).
- Profitability improved YoY driven by 1) high demand for Repair work improving the sales mix, and 2) continued sales volume expansion driving operating leverage.
- The company continues to gain maintenance market share from OEMs by remaining price- competitive, continues to expand its nationwide network, and has sufficient headcount to cater to growing demand.
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