Industrials: Air New Zealand, Toshiba Corp, SK Shieldus, Orient Overseas International, Yangzijiang Shipbuilding, Transport Corp Of India and more

• Air New Zealand (AIR NZ) is the latest airline do a Covid Recapitalisation with a “heavy rights issue” where 
• The dynamics will likely play out somewhat similarly to the way Singapore Air’s did. The initial squeeze and first leg down have. 
• But that means LOTS of opportunity here for long only, passive, and arbitrageurs alike.

• On 24 March, the EGM defeated both company and 3D Investment proposals. That night, a leak in the Nikkei said the company would pursue privatisation measures. Supply side interest. Check. 
• That same day, Bain signed a “Confirmation Agreement” with lead Toshiba shareholder Effissimo would tender into a Bain Tender Offer. Demand Side interest confirmed. Check. 
• Now we have a 3D public letter to the Board demanding 3 measures before the AGM. 

• S1 Corp is more giant in sales and ranks first in the local on-site security market, so it is tough to understand why SK Shieldus should receive a higher valuation. 
• If the growth story is sexier, the story may be different. Still, many investors will have doubts about whether SK Shieldus’ growth story is convincingly explained in the IPO prospectus.
• Even the lower end of the indicative price band is likely to be downwardly corrected in the post-IPO price-finding. Hence, I do not recommend an aggressive approach to this IPO.

• Current at 66 constituents, we expect to reach 80 HSI INDEX constituents by the end of the year before moving higher towards 100 index members in 2023.
• We list 10 stocks that could be added to the index in June – with one-way turnover close to 6%, the actual number of inclusions will be lower.
• We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.

• SK Shieldus (SKS) aims to raise around US$800m via a mix of issuing primary and secondary shares in its Korea IPO.
• SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
• In this note, we will talk about the postive aspects of the deal.

• Yangzijiang Shipbuilding (YZJSGD SP)‘s EGM will be held on 18 April to vote on the proposed spin-off and listing of the company’s investment segment, YZJ Financial Holdings Ltd (YZJFH).
• This spin-off involves an in-specie distribution of YSJFH, with a possible listing by month-end.
• YZJ’s shares have had a solid run since the initial restructuring announcement last November. There looks to be still more juice left in the trade. 

• 3D Investment Partners has sent another open letter to Toshiba’s Board of Directors once again pushing for privatisation options. 
• Once again, the fund’s claims and demands come across as rather shrill and potentially desperate. 
• 3D’s behaviour is a stark contrast with other activists who have been quieter and more skilful and could be the biggest risk to Toshiba in our view.

• SK Shieldus (SKS) aims to raise around US$800m via a mix of issuing primary and secondary shares in its Korea IPO.
• SKS is the security subsidiary of SK Square. It provides security services across four main categories: information security/Cybersecurity, convergence security, physical security, and Safety & Care.
• In this note, we will talk about the not so positive aspects of the deal.

• TCI has developed robust capabilities in multimodal Logistics via its presence across major transportation modes.
• The company has well-diversified service offerings from Road freight, integrated Supply Chain solutions, Sea freight, to a JV with CONCOR for Rail freight.
• These capabilities would be a key enabler for consistent growth in volumes and earnings for TCI over the next few years

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