In today’s briefing:
- Toshiba – Thoughts On The Tender Opinion
- TRACKING TRAFFIC / Container Shipping: End of the Rollercoaster Ride
- MSCI ACWI and EAFE Testing 1.5-Month Downtrends; Remain OW EU; Buys in Leading Sectors on Pullbacks
- Cintas Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report
- JSMR: Decent 1H18, Overhang Remains
- Steelcase Beats on Adjusted EPS, Top Line
- Cintas Corporation: Initiation of Coverage – Key Offerings & Recent Developments
Toshiba – Thoughts On The Tender Opinion
- Toshiba released documents on the tender and a notice that the FY end dividend would be cancelled shortly after our last report was published.
- They are interesting in that the Special Committee’s opinions are relatively frank but details on the valuation process are almost non-existent.
- In addition, the information regarding other bids and alternatives was a little surprising to us.
TRACKING TRAFFIC / Container Shipping: End of the Rollercoaster Ride
- After peaking in H122, container rates have tumbled back to pre-Covid levels in Q123
- We believe core profitability has also declined to pre-Covid levels for some carriers
- Evergreen Marine Corp (2603 TT) no longer looks expensive, trading at 70-75% of replacement cost.
MSCI ACWI and EAFE Testing 1.5-Month Downtrends; Remain OW EU; Buys in Leading Sectors on Pullbacks
- The pullback in global equities continues with the MSCI ACWI (ACWI-US) testing 1.5-month downtrend resistance while the STOXX Europe 50 tests resistance at 3800-3840.
- We expect a rejection at the 1.5-month downtrend and for the stair-step lower to continue, with our targets being $84 (December 2022 low) and potentially $75-77 (the 2022 lows).
- If ACWI-US is able to reverse above the 1.5-month downtrend, we still expect $93 to cap upside in 2023. Remain overweight Europe. Also highlighting individual stock buys on pullbacks.
Cintas Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report
- Cintas Corporation is a specialized provider of uniform rental services and has a leading market position in its domain.
- The Uniform Rental and Facility Services operational segment, which is its core business, has been growing well, particularly through organic means although the company does carry out the occasional acquisition from time to time.
- Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.
JSMR: Decent 1H18, Overhang Remains
- Net profit up 3% on higher toll revenue and operating margin expansion.
- Longer term concerns remain, maintain IDR4,900 TP.
- With 62% of Indonesia’s toll roads by length, JSMR offers exposure to Indonesia’s ongoing urbanisation and infrastructure spending plans. Near term, government intervention in toll tariffs will likely weigh on the stock.
Steelcase Beats on Adjusted EPS, Top Line
- Steelcase reported 4QFY23 on March 22 after the close, with a beat on adjusted EPS and revenues. Guidance for FY24 beat estimates, then in print.
- 4QFY23 adjusted EPS was $0.19, above our estimate of $0.12 and consensus of $0.11. GAAP EPS was $0.13, above our estimate of $0.06. 4QFY23 revenue of $802 million was a ~$50 million positive surprise.
- The positive earnings and revenue surprises were due primarily to core corporate business in the Americas and EMEA segments.
Cintas Corporation: Initiation of Coverage – Key Offerings & Recent Developments
- This is our first report on Cintas Corporation, a specialized provider of uniform rental services.
- Its revenue increased 13.1% to $2.17 billion in the second quarter and each segment experienced double-digit revenue growth.
- The Uniform Rental and Facility Services operational segment’s revenue increased from $1.54 billion to $1.71 billion.
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