In today’s briefing:
- Toshiba – As Bad As It Gets?
- Both C&T & SDS Are Still on the Table for Block Deals by Lee Seo-Hyun, Here’s Why
- Who Will Now Fund Adani Enterprises’ Liquidity Gap?
- South Korea’s Top ESG Risk Trend in 2022: Analysis of News Articles on More than 2,000 Entities
- Pentamaster Corp (PENT MK): Good Story, at What Price?
- Waste Management Company: Key Drivers
- ACCO: Valentine’s Grinch, Downgrading
Toshiba – As Bad As It Gets?
- Toshiba results looked rather poor at the headline on account of additional one-off costs leading to a guidance downgrade to ¥95bn in OP.
- Despite that, we see some small positive signs across the various industrial segments.
- On balance, however, the downgrade and tight lips on the JIP bid leave little to be positive about in the near term.
Both C&T & SDS Are Still on the Table for Block Deals by Lee Seo-Hyun, Here’s Why
- The family devoted all their efforts to maintaining 33.4% of voting shares in Samsung C&T, a level that can block a special resolution at the general shareholders’ meeting.
- The most likely scenario being speculated by the market at this point is to touch both Samsung C&T and Samsung SDS. However, the C&T stake sale is to be minimized.
- The possibility currently circulating in the local market is that she has 0.40% (Hana Sec) and 0.62% (Hana Bank), which currently have the highest interest burden, on the table.
Who Will Now Fund Adani Enterprises’ Liquidity Gap?
- Rescinding of Rs 200 bn FPO deprives the company of much needed long-term funds
- Company has a liquidity issue as this analyst estimates its short term borrowing exceeds its short term borrowing limit and it requires long term funds to bridge the gap
- With foreign and private sector banks unwilling to increase exposure, the company needs to inject funds from founder entities, divest assets, reduce capex and improve working capital to infuse liquidity.
South Korea’s Top ESG Risk Trend in 2022: Analysis of News Articles on More than 2,000 Entities
- The result of analyzing 23,940 news articles on 2,722 Korean listed companies released between 1 January and 31 December 2022, reveal that 565 companies (20.7%) had ESG risks.
- Companies with ESG risks has decreased compared to 2021, which is the first time a decrease trend has been recorded since Who’s Good began conducting ESG analysis in 2015.
- Social risk ranked as the highest risk among ESG (Environment, Social, Governance) with the highest ranking ESG issue being ‘Supply Chain Management’.
Pentamaster Corp (PENT MK): Good Story, at What Price?
- Pentamaster Corp (PENT MK) specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment).
- Pentamaster’s solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.
- However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.
Waste Management Company: Key Drivers
- Waste Management delivered a highly disappointing result in the last quarter and did not live up to analyst expectations with respect to revenues as well as earnings.
- They observed a slowdown in the rate of labor increases and remained committed to managing operating costs and bending costs to match shifting volumes.
- The company advanced its planned recycling investments and provided more details in the supplemental presentation on its website.
ACCO: Valentine’s Grinch, Downgrading
- Downgrading to Neutral from Buy. Target is now $6 from $9.
- ACCO faces greater challenges than could be currently priced in the stock with a longer duration of retailers rebalancing inventory against a weak consumer spending environment
- We have grown concerned the softness ACCO experienced in the third quarter of 2022 could spill over into 2023
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