In today’s briefing:
- ZKH Group IPO: The Bear Case
- Jiangnan Group (1366 HK): Irrevocable from the Shareholder with a Blocking Stake
- Hindustan Aeronautics (HNAL IN) Offer for Sale: Buy Ahead of Potential MSCI Inclusion
- ACCO Brands Is At A Cyclical Discount
- Snap-on Incorporated: Initiation of Coverage – Business Strategy & Recent Developments
ZKH Group IPO: The Bear Case
- ZKH Group (ZKH US), a leading MRO (maintenance, repair, and operations) procurement service platform in China, is pre-marketing an NYSE IPO to raise US$200-300 million.
- In ZKH Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on market share losses, slowing top-line growth, declining take rates and persistent cash burn.
Jiangnan Group (1366 HK): Irrevocable from the Shareholder with a Blocking Stake
- The shareholder with a blocking stake has provided an irrevocable to accept Mr Chu Hui (Chairman and CEO)’s offer to privatise Jiangnan (1366 HK) at HK$0.40 per share
- Key condition is approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). There are no other shareholders with a blocking stake.
- The price is final and attractive in the context of historical prices and multiples. At the last close, the gross spread is 8.1%. Scheme document likely despatched in mid-April.
Hindustan Aeronautics (HNAL IN) Offer for Sale: Buy Ahead of Potential MSCI Inclusion
- The Government of India is looking to sell up to 3.5% of Hindustan Aeronautics Ltd (HNAL) to meet the minimum public shareholding and will raise US$350m at the floor price.
- Hindustan Aeronautics Ltd (HNAL IN) is a potential inclusion to the MSCI India Index at the May QCIR and there will be buyers at the placement.
- Hindustan Aeronautics Ltd (HNAL IN) trades cheaper than its peers and there could be a move higher over the next few weeks.
ACCO Brands Is At A Cyclical Discount
- ACCO Brands Corporation’s stock is relatively undervalued and presents a lucrative dividend yield worth more than 6%.
- The company’s recent woes were a consequence of elevated raw material costs.
- However, key metrics imply that ACCO’s cost base is set to improve.
Snap-on Incorporated: Initiation of Coverage – Business Strategy & Recent Developments
- This is our first report on Snap-on Incorporated, a well-known manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions in the U.S.
- The company’s last result was an all-around beat and its organic sales growth was in the double-digits with a particularly strong performance in the Repair Systems & Information Group, high single-digit gains in the Snap-on Tools Group, and low single-digit gains in the Commercial and Industrial Group.
- Snap-on Tools Group sales were $542.7 million, up from $504.8 million a year ago, with a 9.6% increase in organic sales.
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