In today’s briefing:
- Toshiba Board to Shareholders: “Yes, Meh But We Did Our Job, Now It’s Up To You (We’re Tired Too)”
- Toshiba – The End… Hopefully
- Toshiba (6502 JP): JIP’s JPY4,620 Tender Offer, Now for the Really Hard Part
- Hindustan Aeronautics Placement – Still Running Hot on Defence Spending Focus
- Xinjiang Goldwind Science & Technology (2208 HK) – 9.1% Profit Target Achieved in 3-4 Weeks
- HD Hyundai: NAV Boost From Record Results At Hyundai Oilbank + High Dividend Yield
- China Railway Construction: Continues to Secure Orders
- Vietnam’s Vingroup Invests in Grab Competitor Be
Toshiba Board to Shareholders: “Yes, Meh But We Did Our Job, Now It’s Up To You (We’re Tired Too)”
- Just post-close, the Nikkei reported Toshiba’s Board had agreed a JIP deal at “around ¥2trln.” Toshiba confirmed HOURS later indicating language was still being hashed out. And the dividend cancelled.
- Toshiba “supports” the deal because it aligns a single shareholder with management goals. They cannot recommend to general shareholders because it is too low. But JIP was the only bidder.
- It raises the question of whether activists will submit to “Toshiba Fatigue” at what the Board admits is too low a price, or whether there is still fight left.
Toshiba – The End… Hopefully
- The Nikkei reported today that Toshiba’s board had chosen to accept JIP’s buyout offer.
- The purported pricing of ¥2trn is a relatively modest premium but is not a surprise and no surprise is a positive here in our view.
- All that remains is shareholder approval and while we doubt there will be too many celebrations on that front, there is likely to be relief.
Toshiba (6502 JP): JIP’s JPY4,620 Tender Offer, Now for the Really Hard Part
- Toshiba Corp (6502 JP) announced a pre-conditional tender offer by Japan Industrial Partners (JIP), the preferred bidder at JPY4,620 per share, a 9.7% premium to the last close price.
- The special committee opines that the offer is the best price that can be expected today, which sounds like we are recommending the offer as it is the only one.
- The offer has several negatives: a 14% price reduction during the process, below the undisturbed price, below the mid-point IFA DCF range and no serious effort on Plan B.
Hindustan Aeronautics Placement – Still Running Hot on Defence Spending Focus
- The Government of India (GoI) aims to raise around US$372m (INR30.7bn) via an offer for sale of Hindustan Aeronautics Ltd (HNAL IN) stock.
- The floor price of INR2,450 / share is set at approximately 6.7% to Wednesday’s (22nd Mar 2023) last close. The deal represents 10.5 days of ADV.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Xinjiang Goldwind Science & Technology (2208 HK) – 9.1% Profit Target Achieved in 3-4 Weeks
- At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
- On 14 February 2023 we published a bearish recommendation in Xinjiang Goldwind Science & Technology (2208 HK), targeting a 9.1% multi-week decline in Q1 2023.
- 2208 HK declined from 7.62 on 14 February to 6.94 on 10 March (19 trading days), a decline of 9.1%.
HD Hyundai: NAV Boost From Record Results At Hyundai Oilbank + High Dividend Yield
- According to our NAV analysis, it suggests a base case valuation of 70,272 won per share for HD Hyundai, representing a 23% upside from current levels.
- The expected dividend yield of HD Hyundai in 2023 is 7.8% which is attractive.
- Hyundai Oilbank generated record results in the past year and this has been a key boost to the NAV of HD Hyundai.
China Railway Construction: Continues to Secure Orders
- 9.5% YoY growth in net profit in 1H22. Valuations undemanding but share price performance also depends on investors’ style preferences
- Monitoring deleveraging efforts
- Aided by the rotation to value/cyclical stocks and more positive newsflow in the infrastructure sector, the stock of China Railway Construction (CRCC) has also risen in tandem, though at a smaller magnitude versus other peers.
Vietnam’s Vingroup Invests in Grab Competitor Be
- Green and Smart Mobility (GSM) said it will back ride-hailer Be Group‘s efforts to use electric vehicles in Vietnam.
GSM was just launched earlier this month by Vingroup chairman Pham Nhat Vuong.
In the first phase of their collaboration, Be Group and GSM will partner with Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) to offer exclusive policy deals for Be drivers to rent or purchase VinFast electric cars and motorbikes.
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