In today’s briefing:
- Hitachi Transport (9086 JP): Trading Too Wide
- Air New Zealand Shortfall – Not a Great Take-Up Probably Because of the Large Retail Holding
- Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters
- MonotaRo: Not a Pandemic Stock
Hitachi Transport (9086 JP): Trading Too Wide
- The Hitachi Transport System (9086 JP) deal announced last week was a big win for minorities, discussed in Hitachi Transport System (9086) Shareholders Get the BIG Win in This VLBO.
- Market ructions and the Hitachi Metals saga have this trading wide.
- This deal looks different in terms of approval risk and timing risk than Hitachi Metals and is worth a closer look now.
Air New Zealand Shortfall – Not a Great Take-Up Probably Because of the Large Retail Holding
- Air New Zealand (AIR) was aiming to raise around US$827m (NZ$1.2bn) via a renounceable rights issue. It has now launched a shortfall of around US$153m, at last close.
- We have covered the background of the rights and expected shortfall in our earlier note, Air New Zealand Rights and Possible Shortfall – Delayed Boarding but Its Priced to Fly.
- In this note, we talk about the recent updates and shortfall pricing.
Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters
- Shenzhen International (152 HK) has secured pre-tax gain of HK$2.8bn from deemed disposal of Qianhai Business and this is another example for its ability to realise underlying asset value.
- SZI still holds a 50% stake in Qianhai Business, allowing it to capture further upside from this project. The transaction should also improve cash flow as land fees are repaid.
- Other logistics transformation projects like the South China Logistics Park, which has an area even larger than Qianhai Business, will provide upside for the longer term.
MonotaRo: Not a Pandemic Stock
- Monotaro’s 1Q22 topline was broadly in line with expectations but OP overshot consensus and company guidance by ¥355m and ¥396m respectively as SG&A fell short of the plan by ¥435m.
- Although the market treated MonotaRO Co Ltd (3064 JP) as a pandemic stock, it has stronger fundamentals than most pandemic winners.
- Shares are not cheap enough to be outright bullish but it is still a decent long hedge to short many other low-quality names.
Before it’s here, it’s on Smartkarma
