In today’s briefing:
- ZTO Express Q3: Margins Plunge Vs Q2 | Abandons Pursuit of Share Gains | Is There a New Strategy?
- Playing with Trains
ZTO Express Q3: Margins Plunge Vs Q2 | Abandons Pursuit of Share Gains | Is There a New Strategy?
- Non-Core items boosted Q3 earnings, but core margins plunged vs Q2
- In a surprise move, ZTO has abandoned its aggressive pursuit of share
- Medium term growth is likely to slow, and pressure on margins remains
Playing with Trains
- Rolling stock manufacturer Talgo SA (TLGO SM) confirms the interest of a Hungarian investor in launching a takeover bid at €5/share, 28% premium, 10.5 EV/24e EBITDA.
- The implied market cap is €617 million and the implied EV is €837 million. My fair value estimate (DCF-based) is €4.76/share, so the potential offer price seems adequate.
- The 17 November closing share price implies a 44% probability of an offer (12% gross spread, 12% gain since disclosure), which indicates that the outcome seems uncertain.
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