Industrials: Siemens Gamesa Renewable Energy, S.A., Doosan Corp, Shenzhen Expressway Co H, RITES Ltd, Nesco Ltd and more

• Siemens Energy seems to have the backing of both BlackRock and Norges, and could then count on 72.55% of the votes vs. 75% approval at EGM needed for delisting.
• The shares have seen high purchasing activity since the offer announcement (€158 million average turnover since Monday). Gross spread is 1.5%, 3.7% estimated annual return (assuming settlement on 24 October).
• One could sell part of the shares if the share price rises above the offer price and await a possible sweetening, and tender the rest during the acceptance period.

• There are three major reasons we like a pair trade between Doosan Corp (go long) and Doosan Enerbility (go short). 
• First, share prices of two companies have diverged too much this year. Second, Doosan Corp is currently trading at a 76% discount to its NAV, which is excessive. 
• Third, as investors have poured capital into nuclear power themed Doosan Enerbility, they have neglected its parent Doosan Corp. 

• Shenzhen Expressway Co H (548 HK) guided that many drivers are presented for the rest of the year to support growth, after a 24% YoY decline in 1Q22 net profit. 
• Toll road business should benefit from organic growth and project completions, while clean energy and waste treatment businesses will experience astronomical growth from capacity acquisitions. 
• There exists room to leverage up for growth as liabilities-to-asset ratio is still 11pp below its tolerance level of 65%. Besides below-average PERs, FY22F yield of 10% is attractive too.

• RITES Ltd. (RITES) reported a good set of Q4FY22 numbers with revenues of Rs 766 Cr (up 20% YoY), supported by the higher export sales, EBIDTA of Rs 204 Cr (up 10% YoY), and APAT of Rs 141 Cr (down 1% YoY).
• The company registered EBITDA Margins of 26.7% in Q4FY22 (our estimate: 26.8%) as against 29.2% in Q4FY21
• We roll over our estimate to FY24 and retain a BUY rating on the stock, valuing the company at 11.5x FY24E EPS to arrive at a target price of Rs 275/share (Rs 305/share earlier), implying an upside of 10% from the CMP.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.