In today’s briefing:
- Toshiba (6502) – Now We Have the First Rounds Bids In, And We Wait, But It’s Top of Range
- Toshiba – Key Takeaway Is Toshiba Tec’s Attractiveness
- Xiamen Port’s Juicy HK$2.25 Per H Share Privatisation Offer
- Air China to Take Over Embattled Regional Airline
- BAFS : Recovery Phase Has Kicked Off
- Dilip Buildcon Ltd – Fixed Cost Projects Affect Margins
Toshiba (6502) – Now We Have the First Rounds Bids In, And We Wait, But It’s Top of Range
- Since Toshiba reported lacklustre earnings and guidance, there has been a steady flow of articles in the press about the privatisation process going on behind the scenes.
- On 25 March, Toshiba let it be known a privatisation process would start. On 31 March, Bain gave notice it would participate. Toshiba has been in talks since 21 April
- First round bids were due 30 May, and 10 total submissions were made, with 8 privatisation proposals proffered. Now we wait…
Toshiba – Key Takeaway Is Toshiba Tec’s Attractiveness
- Toshiba provided an update today on its management policy and the status of discussions with potential investors.
- The management targets unveiled looked plausible but rather optimistic while the only real new information on the potential privatisation was that 8 bids had been submitted.
- In the end the most interesting takeaway for us was that Toshiba Tec would play a key role in Toshiba’s data business.
Xiamen Port’s Juicy HK$2.25 Per H Share Privatisation Offer
- Xiamen International Port H (3378 HK) announced a pre-conditional privatisation offer from Xiamen Port Holding at HK$2.25 per H share + final dividend of RMB0.021 per share (ex-div: 15 June).
- The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
- The offer is attractive in comparison to historical share prices and multiples. We think that the privatisation proposal will likely succeed. At the last close, the gross spread is 55.2%.
Air China to Take Over Embattled Regional Airline
- National flag carrier Air China Ltd. (601111.SH) is planning to take control of Shandong Airlines as part of a bailout of the debt-ridden regional airline, it said this week.
- The state-owned giant is stepping in as its smaller peer suffers along with the rest of the country’s civil aviation industry, with companies racking up huge losses due to the Covid-19 pandemic.
- Air China is already the second-largest shareholder of Shandong Airlines Group Co. Ltd. with a 49.4% stake
BAFS : Recovery Phase Has Kicked Off
- Maintain BUY recommendation for BAFS with a target price of Bt34.0. Business performance are expected to turn profit by 3Q22, driven by recovery in aviation fuel services volume along
- BAFS report 1Q22 net loss at Bt77m, the smallest loss in the past eight quarters. The result came out slightly above our expectation.
- The least loss in the past eight quarters supported by dividend income recognition worth Bt50m from power plant business in Japan (acquired in 4Q21)and an increase in aviation fuel volume
Dilip Buildcon Ltd – Fixed Cost Projects Affect Margins
- Operational performance and guidance: For FY22, DBL reported revenue of Rs90bn, down 2.2% YoY.
- Asset monetization: The management had signed a term sheet for the sale of 10 HAM assets to Shrem InVIT.
- Order book: The current orderbook stands at Rs255bn, with 45% contribution from Roads, 17% from Irrigation, 22.5% from Mining, 9% from Tunnel, 5% from Special Bridges and the balance from Airport & Metros.
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