In today’s briefing:
- Toyo Construction (1890) Tries a Different Tactic – FEFTA!
- Golden Energy: Dian Swastatika Goes To Vote. Nothing To See Here
- Mitsui OSK(9104): Ex-Div – The Last Straw…
- Sunpower: Extension of CB’s Puts Focus Back on GI Business Fundamentals
- Leoch [842]: +225% EPS, 5G Play, 4x P/E, 6% Dividend, Inflection Point
- AKR Corporindo (AKRA IJ) – Smelting Upwards
- Shenzhen Intl (152 HK): Don’t Look Back, Look Forward
- 3QFY23 Adjusted EPS Beats but Revenues Miss; 4QFY23 Guidance Disappoints
- Roper Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Roper Technologies Inc.: Initiation of Coverage – Acquisition-Led Growth Strategy & Key Drivers
Toyo Construction (1890) Tries a Different Tactic – FEFTA!
- This morning, Reuters is reporting that Toyo Construction (1890 JP) has asked the Japanese government to investigate alleged breaches of the Foreign Exchange and Foreign Trade Act by YFO.
- Why? The Very Japanese family office of Nintendo’s founding family used Cayman entities to purchase Toyo shares and Toyo was re-labeled as having businesses in “Core Sectors” in October 2021.
- Toyo has also repeated its complaint about changed “intentions” on large shareholder filings. That bit of the complaint is 10 months old. A closer look at the details within.
Golden Energy: Dian Swastatika Goes To Vote. Nothing To See Here
- Dian Swastatika (DSSA IJ) shareholders will vote on the in-specie distribution of Golden Energy Mines and the exit offer of Golden Energy & Resources (GER SP) on the 2 May.
- This requires a simple majority vote, and the Widjaja family-controlled PT Sinar Mas Tunggal holds 59.9% in DSSA. This is rubber-stamped.
- For what it’s worth, DSSA’s “independent advisors” concluded the Offer is fair. To the Widjaja family as majority owners, it most certainly is. To the DSSA minority shareholders… 👀
Mitsui OSK(9104): Ex-Div – The Last Straw…
- Mitsui OSK is up 460% since June 2020. Almost gravity defying. Strong Container profits have lead to high dividends. Now Shareholders hang on for one more big payoff
- Container rates have just about to reverted to pre-pandemic levels. Utilization is falling; Capacity coming on; Customers using spot. All points to potential losses next year for Containers and ONE
- We expect a major profit decline=>div cut; How far could share price fall ? See the share price vs Shanghai Container Index correlation below. We are bearish Mitsui OSK.
Sunpower: Extension of CB’s Puts Focus Back on GI Business Fundamentals
- Sunpower Group (SPWG SP) announced it agreed to a 2-year extension of its CBs with two Chinese P/E funds that have been supporting it since 2017
- The extension is unexpectedly favorable to Sunpower equity holders and removes a major overhang
- After two difficult years with spiking coal prices and rolling lockdowns in China, the company can finally be valued on the merits of its GI business once again
Leoch [842]: +225% EPS, 5G Play, 4x P/E, 6% Dividend, Inflection Point
- Capital Expenditure – New Investment in Mexico Plant in 2023
- The company achieved a solid performance in its Recycled Lead business and Power Solutions business with a revenue growth of 18% and 13%, respectively, as compared to 2021.
- The revenue for Recycled Lead business and Power Solutions business was RMB2,413 million and RMB10,433 million respectively.
AKR Corporindo (AKRA IJ) – Smelting Upwards
- AKR Corporindo (AKRA IJ) booked an impressive set of numbers significantly above consensus with net profit increasing +117% YoY driven by strong performance across all segments.
- Trading & Distribution will be driven by both the demand for petroleum products together with chemicals, especially from the increasing number of smelters in Indonesia, both for copper and nickel.
- JIIPE industrial estate booked 44.5 ha of sales, above guidance, with expectations for 70-75 hectares of land sales this year. Valuations are significantly below the historical average and consensus low.
Shenzhen Intl (152 HK): Don’t Look Back, Look Forward
- FY22 is definitely bad for Shenzhen International (152 HK) given the 64.9% profit plunge. However, negative contributors like Shenzhen Airlines and exchange losses will be removed in this year.
- Earnings for Shenzhen Expressway (548 HK) will improve and 1Q23 has witnessed good traffic recovery. Logistics profit will benefit from higher occupancy, REIT issuance and new projects.
- Upside will come from logistics park transformation with profit from Yicheng Qiwanli pre-sale potentially to be booked. Consensus earnings forecast of HK$4.1bn is at low-end of our estimate.
3QFY23 Adjusted EPS Beats but Revenues Miss; 4QFY23 Guidance Disappoints
- After market close Wednesday, March 22, MillerKnoll reported 3QFY23 adjusted EPS of $0.54, $0.12 higher than our estimate and consensus.
- GAAP EPS of $0.01 missed by $0.31, caused primarily by a $37.2 million charge for closing Fully, a Knoll brand.
- 3QFY23 revenues of $985 million missed our estimate by ~$20 million.
Roper Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Roper Technologies is a diversified software and tech investment player.
- The company makes pertinent investments in technology companies with a high base of cash and negative working capital with the objective of maximizing the returns on the capital employed.
- 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.
Roper Technologies Inc.: Initiation of Coverage – Acquisition-Led Growth Strategy & Key Drivers
- This is our first report on Roper Technologies, a diversified software and tech investment company.
- The company ended 2022 on a positive note with revenue of over $1.4 billion, up 14% higher than the prior year.
- We initiate coverage on the stock of Roper Technologies, Inc. with a ‘Hold’ rating.
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