In today’s briefing:
- Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge
- APM Human Services (APM AU): CVC’s 141% Offer Premium
- China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff
- Tokyo Metro IPO Early Look – Could Raise Around US$2bn While Still Recovering from COVID
- APM (APM AU): CVC’s Revised Non-Binding Proposal at A$2.00
- QANTM (QIP AU): Rouse Makes An Offer – But At What Price?
- Sinotrans (598.HK), a Shining Example of SOE Reform
- 2Q Follow-Up – Ohba (9765 JP)
Beyond the Bubble: A Deep Dive into the Forces Behind the Nikkei Index Surge
- Japan’s Nikkei Stock Average has surged past its 1989 peak, fueled by global investor interest, corporate reforms, and innovative investment initiatives like the Nippon Individual Savings Account (NISA).
- This resurgence marks a significant milestone in Japan’s economic landscape, reflecting renewed investor confidence, structural reforms, and potential growth opportunities in the market.
- The Nikkei’s surpassing of its previous peak signals a shift in perception towards Japan’s market potential, prompting investors to reconsider the country’s economic trajectory and explore new avenues for investment.
APM Human Services (APM AU): CVC’s 141% Offer Premium
- Back on the 19th Feb, employment and disability services play APM Human Services Internation (APM AU) rejected PE-outfit CVC Asia Pacific’s A$1.60 proposal, a 93% premium to undisturbed.
- Undeterred, CVC has returned with A$2.00/share indicative Offer, by way of a Scheme, a 141% premium to undisturbed; yet a 44% discount to APM’s November 2021 IPO price of A$3.55/share.
- APM has determined it will engage and provide CVC with a four-week period of exclusivity.
China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff
- Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
- China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
- Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.
Tokyo Metro IPO Early Look – Could Raise Around US$2bn While Still Recovering from COVID
- Tokyo Metro (TKYMETRO JP)’s shareholders, the Japanese and Tokyo Metropolitan Governments, could look to raise up to US$2bn by selling half of their stake via an IPO.
- Tokyo Metro is one of the two metro network operators in the Tokyo region. It operates nine subway lines.
- In this note, we take an early look at the possible listing.
APM (APM AU): CVC’s Revised Non-Binding Proposal at A$2.00
- APM Human Services Internation (APM AU)’s revised non-binding proposal from CVC is A$2.00 per share, a 141.0% premium to the undisturbed price of A$0.83 per share (16 February).
- CVC has been granted a four-week exclusivity period to 27 March. The proposal allows shareholders to receive scrip in an unlisted HoldCo. The Board will recommend a binding proposal.
- While not a knockout offer, a concentrated and seemingly supportive shareholder register facilitates a binding proposal. At the last close, the gross spread was 25.0%.
QANTM (QIP AU): Rouse Makes An Offer – But At What Price?
- Yesterday morning, Qantm Intellectual Property (QIP AU) announced it had received a non-binding indicative proposal from UK-based Rouse International Holdings Limited.
- In what only can be described as a (s)crappy announcement, no price was disclosed, nor the due diligence period. Not even if this was a cash/scrip Offer.
- In any event, QANTM considers Rouse’s ops to be highly complementary in both geographic and service lines to QANTM. QANTM shares gained 17% yesterday to close at A$1.34.
Sinotrans (598.HK), a Shining Example of SOE Reform
- A Profit-Oriented State Owned Enterprise that is walking the walk.
- Management incentives are aligned with shareholders, a rarity in China.
- Plenty of upside remains despite the market outperformance to date
2Q Follow-Up – Ohba (9765 JP)
- 2Q FY24/5 results showed a steady increase in orders and earnings, following the 1Q results.
- The company has been securing orders for disaster prevention and mitigation, defense civil engineering, and other priority areas.
- Given 1H results and an order backlog of ¥12.48 bn as of the end of November, SIR believes the Company’s chances of achieving its targets have improved considerably.
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