In today’s briefing:
- Toshiba – Realistic Valuation Disappoints Markets
- Golden Energy & Resources (GER SP)’s Lacking Offer from the Widjaja Family
- Super High Premium Buyout for Totoku Electric (5807) By Carlyle
- Yokogawa Electric (6841 JP): High Energy Prices Point to Further Upside
- Beijing SinoHytec A/H Listing – A Whole Lot of Promise but Not Much Earnings to Show for It Yet
- ACCO: Free Cash Flow Begins to Show
Toshiba – Realistic Valuation Disappoints Markets
- The Nikkei reported on Monday that JIP’s bid values Toshiba at roughly ¥2.2trn.
- The stock has dropped to a level just below this valuation suggesting some anticipation of a Bain/JIC bid above that valuation.
- While that is plausible, the cautiousness of JIP’s bid highlights the fundamental downside risk here in our view.
Golden Energy & Resources (GER SP)’s Lacking Offer from the Widjaja Family
- Golden Energy & Resources (GER SP)‘s proposal from the Widjaja family – The distribution proposal (1.3936 GEMS share per share or IDR5,500 per GEMS share) and the delisting proposal (S$0.160).
- For minorities, the good news is that the distribution share ratio is in line with the control ratio and offers are at a premium to historical share prices/multiples.
- The bad news is that the distribution cash alternative is unattractive and the delisting offer values GEAR at a discount to the Stanmore Coal (SMR AU) stake adjusted for debt.
Super High Premium Buyout for Totoku Electric (5807) By Carlyle
- Yesterday, Carlyle announced a buyout of Totoku Electric (5807 JP) at ¥5,660/share, which was a cool 155% premium to Tuesday’s close of ¥2,215. The stock was limit up today.
- It will be limit up tomorrow, and the next day. And probably the next day.
- This is a very interesting outcome. But it is actually not as expensive as it “looks.”
Yokogawa Electric (6841 JP): High Energy Prices Point to Further Upside
- Strong 1H orders and the second upward revision to guidance this fiscal year have lifted the share price to a new high.
- The energy shortage and high energy prices should continue to drive demand for Yokogawa’s oil, gas and power related industrial control equipment. Demand from other users is also rising.
- Valuations suggest 15% to 20% additional upside potential for the share price. Recession or a strengthening of the yen could put this at risk, so watch the order flow.
Beijing SinoHytec A/H Listing – A Whole Lot of Promise but Not Much Earnings to Show for It Yet
- Beijing Sinohytec Co Ltd (688339 CH) (BSH) is looking to raise up to US$400m via its H-shares listing.
- BSH provides fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks mainly for commercial vehicles, such as buses and trucks.
- In this note, we talk about the company’s past performance and other deal dynamics.
ACCO: Free Cash Flow Begins to Show
- ACCO had already warned of the sales shortfall in the third quarter but followed through on exhibiting the free cash flow capabilities of the business.
- Retailers have changed their purchasing habits and that has led to slower sales at ACCO.
- Looking ahead to the fourth quarter, back to school season begins in Brazil and Australia, which should give a lift to sales.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
