In today’s briefing:
- Nojima (7419) Launches Buyout of Conexio (9422)
- Conexio Corporation (9422 JP) JPY1,911 Tender Offer from Nojima
- Breaking Estimates Short Candidates: Kulicke & Soffa, Kronos, Marvell Tech, Montauk Renewables
- MergerTalk:Why Black Knight May Be As Safe As Houses Even If Regulators Stop Its Merger With ICE
- Taiwan Tech Weekly: Micron Earnings Miss Implies Margin Downside, Hon Hai Moving 30% Apple Business
- Delta Taiwan Vs. Thailand Monitor: Delta Thai Joining SET50, Could Open Up Rare Rel Valuation Level
- EQD | HSI Index:-Chinese Equities Have Held up into Year End and We Revisit the December Call Ratio
- Micron Fiscal Q1: Short-Term Pain For Long-Term Gain
- Hang Seng Index and Tencent
- Splunk Is A Rare Tech Growth Opportunity For 2023
Nojima (7419) Launches Buyout of Conexio (9422)
- Nojima Corp (7419 JP) is buying out Conexio Corp (9422 JP) majority owner Itochu Corp (8001 JP) along with minorities. At a 59% premium, it looks good.
- However, in terms of normalised EV/EBITDA or EV/FCF multiple, this is not expensive.
- And while the major seller/target and friendlies are oh so close, the register is more interesting than the yuho top 10 shareholder list suggests.
Conexio Corporation (9422 JP) JPY1,911 Tender Offer from Nojima
- Conexio Corp (9422 JP) has recommended Nojima Corp (7419 JP)’s tender offer of JPY1,911 per share, an 59.1% premium to the undisturbed price (22 December).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the offer has been set to meet the 66.67% ownership ratio.
- The tender offer was set in motion due to Itochu Corp (8001 JP)’s desire to exit. Itochu tendering its 60.34% stake and an attractive offer, suggests a done deal.
Breaking Estimates Short Candidates: Kulicke & Soffa, Kronos, Marvell Tech, Montauk Renewables
- This model finds companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
- The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business.
- Breaking Estimates stocks often continue to decline after the cuts. This week we flag: Kulicke & Soffa, Kronos, Marvell Tech, Montauk Renewables
MergerTalk:Why Black Knight May Be As Safe As Houses Even If Regulators Stop Its Merger With ICE
- We think that a ~40% spread overstates the risk of this deal not moving to completion.
- The horizontal integration aspects of this transaction can be remedied, but this is a largely vertical merger transaction which regulators may struggle to prove will lead to monopolistic behavior.
- Even if the ICE merger is ultimately blocked, BKI has other supporting factors that could drive upside – an attractive valuation and a potential revival of interest from other parties
Taiwan Tech Weekly: Micron Earnings Miss Implies Margin Downside, Hon Hai Moving 30% Apple Business
- Micron released its latest results, missing expectations and implying more near-term pain for the memory chip space.
- Hon Hai could shift 30% of its production for Apple outside of China according to an industry report.
- Intel delays German expansion citing cost inflation, seeking additional government subsidies.
Delta Taiwan Vs. Thailand Monitor: Delta Thai Joining SET50, Could Open Up Rare Rel Valuation Level
- Delta Thailand will be joining the Thailand SET50 Index, as was predicted by Brian Freitas here on Smartkarma.
- The “Illogical” valuation is back — Delta Taiwan trades as a smaller company despite being a substantially larger franchise.
- Opportunity — Index-Related buying of Delta Thailand could open up one of the most historically extreme relative valuations for Delta Taiwan.
EQD | HSI Index:-Chinese Equities Have Held up into Year End and We Revisit the December Call Ratio
- Chinese equities have continued to outperform versus other global markets
- The HSI Index 200dma has proved to be a barrier to the upside
- We evaluate the call ratio we suggested in November and recommend action
Micron Fiscal Q1: Short-Term Pain For Long-Term Gain
- Micron Technology, Inc. reported fiscal Q1 2023 earnings and announced cost-cutting measures.
- Macroeconomic trends are still a drag, according to the company.
- The company also announced cost cutting measures for the next year’s fiscal year.
Hang Seng Index and Tencent
- Holiday Volume and excessive price actions make market analysis less than helpful. HSI daily shares traded volume on 21st was the lowest year to date.
- Thursday saw a pick-up in volume. Word on easing Covid restrictions for international travelers, reopening HK-China Border in January, and a higher close in the US market brought outsized gains.
- The stock was up 4.12% and had the heaviest volume on HKEX on the 22nd, yet the stock volume was well below 21 days’ average volume.
Splunk Is A Rare Tech Growth Opportunity For 2023
- Splunk is stronger with Q3 earnings and guidance. The company is shadowed by takeover talk.
- The company has a strong cloud market make it a buy. The firm is shadowing by takeover talks.
- The firm has been in the news for more than two years.
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