In today’s briefing:
- Whitebox Goes Activist on Samsung C&T
- Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- Inox India IPO – Offering Access to a Niche Sector
- Severfield – FY24 expectations unchanged, order book robust
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Whitebox Goes Activist on Samsung C&T
- On 14 December, it was reported that US based Whitebox Advisors has started an activist campaign on Samsung C&T (028260 KS).
- Whitebox estimates that Samsung C&T’s stock price is about 68% undervalued compared to its NAV.
- In addition to Whitebox, there are two other foreign investors including Palliser Capital and City of London Investment Management that have requested Samsung C&T to improve corporate governance.
Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- The Toyo Construction (1890 JP) Board has opposed YFO’s potential tender offer price of JPY1,255 per share but has kept the door open for an improved offer.
- YFO is running out of options as a YFO candidate-heavy special committee opposed its proposal, and the share price is trading through terms.
- YFO has three options: a hostile offer at an unchanged price, an improved price, or exit its position. Each option has issues suggesting a lack of short-term share price support.
Inox India IPO – Offering Access to a Niche Sector
- INOX India Limited (INOX IN) is looking to raise up to US$175m in its Indian IPO.
- Inox India is a manufacturer of cryogenic equipment. As per CRISIL, the firm was the largest Indian exporter of cryogenic tanks in terms of FY23 sales.
- In our previous note, we looked at the company’s background. In this note, we talk about the company’s performance and share our quick thoughts on valuation.
Severfield – FY24 expectations unchanged, order book robust
Severfield’s H124 results highlighted profit growth despite declining revenue, and management continues to expect full-year results to be in line with previous guidance. The total order book has also remained at elevated levels despite the loss of a large studio contract, highlighting the quality of future work in the UK and Europe, and that it is a key indicator of future earnings visibility. The FY24e P/E rating of 7.0x is comfortably below the long-term average of c 10x, implying some risk is discounted in the rating. The stock yields nearly 6%, which is an added attraction.