In today’s briefing:
- Sembcorp Marine (SMM SP): Short-Term Share Overhang Vs the Long-Term Value
- Advantest (6857): Sell into the Rebound
- Weekly Deals Digest (19 Feb) – Fujitec, Toyo, AAG Energy, Yashili, Newcrest, Keppel, Pertamina
- Toshiba Bear Targets
Sembcorp Marine (SMM SP): Short-Term Share Overhang Vs the Long-Term Value
- The transaction completes on 28 February and the distribution in-specie of 49% new Sembcorp Marine (SMM SP) shares will be credited to Keppel Corp (KEP SP)‘s shareholders on 1 March.
- While the potential index inclusions are likely to support new SMM shares, there is likely to be greater short-term downward pressure from the overhang created by the distribution in-specie.
- New SMM trades at a premium P/NAV multiple of 1.81x vs peers. However, New SMM’s order book of S$18.1 billion implies an undemanding EV/order book of 0.60x vs historical ranges.
Advantest (6857): Sell into the Rebound
- Advantest’s share price has risen by 21.5% since the beginning of January, but sales and profits are peaking and YoY comparisons are becoming increasingly difficult.
- Competitor Teradyne’s results and guidance give an indication of potential near-term risk, which could be more than 20%.
- Visibility is deteriorating and the longer-term outlook uncertain. We doubt the share price can hold up as profits decline.
Weekly Deals Digest (19 Feb) – Fujitec, Toyo, AAG Energy, Yashili, Newcrest, Keppel, Pertamina
- 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 – Pertamina Geothermal (0125738D IJ) raised US$597 million by pricing the IPO at the low end of the price range of IDR875-880 per share.
- Event-Driven developments – Fujitec Co Ltd (6406 JP), Toyo Construction (1890 JP), Keppel Corp (KEP SP), Aag Energy Holdings (2686 HK), Newcrest Mining (NCM AU), Origin Energy (ORG AU).
Toshiba Bear Targets
- Toshiba (6502) exhibits clear bear momentum as the MACD turns down from key trend resistance. A sharp draw down will set up a buying opportunity.
- Near sell resistance to short lies at 4,450. Bear projection come in at 4,185 but the MACD coil suggests an undershoot toward 4,100.
- Macro bet is to buy near spiked lows for a rally to 4,500 and then the bigger 5,000 barrier. Need to see sell volumes deteriorate into weakness.
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