In today’s briefing:
- Relia (4708 JP) Tender Offer Launches – STILL at the Wrong Price for the Wrong Reasons
- JD Industrials IPO: The Bear Case
- QANTM Intellectual Property Ltd – Investor Briefing: Reiterates EBITDA Margin Target
- Almac IPO Valuation Analysis
- JD Industrials Pre-IPO – Initial Thoughts on Valuation
Relia (4708 JP) Tender Offer Launches – STILL at the Wrong Price for the Wrong Reasons
- In mid-January this year, Mitsui & Co Ltd (8031 JP) announced it would buy out minorities in Relia Inc (4708 JP) (longtime known as Moshi Moshi), a BPO/RPA/AI services company.
- I said the deal was too cheap, with 44% upside to the midpoint of Target Advisor’s DCF fair value range. Investors needed to exercise their cowbell to get more.
- Since then, TOPIX has returned ~15%, A peer basket 16%, H2 was possibly kitchen-sinked, but no Mar-2024 forecasts were provided. The Tender starts tomorrow. Noise is still warranted.
JD Industrials IPO: The Bear Case
- JD Industrials (2231713D CH)/JDI, a leading industrial supply chain technology and service provider in China, has filed for a US$1bn IPO. JD.com Inc (ADR) (JD US) owns a 77.95% stake.
- In JD Industrials IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on slowing SME growth, declining key accounts take rate and gross margin, unnecessary factoring and transfer of most cash for treasury management.
QANTM Intellectual Property Ltd – Investor Briefing: Reiterates EBITDA Margin Target
- Unchanged outlook commentary versus February 23 results commentary: QIP expects continued organic growth and underlying EBITDA margin improvement.
- Increased sense of urgency around transformation programme execution with IP management platform upgrades and redundant data centre commissioning scheduled in coming months.
- Reiteration of EBITDA margin target of low 30s medium term versus c. 27% currently.
Almac IPO Valuation Analysis
- Our target price of Almac is 58,573 won per share, which is 30% higher than the high end of the IPO price range of 45,000 won.
- Our target price is based on 14.8x P/E using our estimated net profit of 25.4 billion won in 2024.
- Almac ranks first in domestic market share (Korea) in the aluminum extruded module cases that protect batteries from external shocks.
JD Industrials Pre-IPO – Initial Thoughts on Valuation
- JD Industrials is looking to raise about US$1bn in its upcoming HK IPO.
- JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
- We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.
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