In today’s briefing:
- Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- Ibiden (4062 JP): Guidance Looks Too High, but Dropping Toward an Entry Point
- COSCO Shipping Energy (1138 HK): Ahead of the Curve…but Too Much
- Power Mech Projects – Result Above Expectations; Rs36bn Revenue Guidance Given
- Thermax – Weak Profitability Offsets Strong Topline Growth; Strong Order Inflow
Toyo Construction Comes Out Fighting Against YFO, But Sincerely.
- As discussed in the last insight, there was the possibility that YFO was jumping the gun. From the near 100+ pages released by Toyo Construction (1890 JP) today, they did.
- TC accused YFO of being “dishonest” in its attitude and actions, from the “reasons” stated in its Large Shareholder Report and market purchases to YFO’s Murakami-san’s previous interactions.
- What TC doesn’t yet understand is that when a company is in play, if a “market check” comes in, that’s OK. Investors are not hurt by a higher bid.
Ibiden (4062 JP): Guidance Looks Too High, but Dropping Toward an Entry Point
- Share price down 35% since last December, probably because FY Mar-23 guidance seems over-optimistic. Gearing to falling demand and rising costs is high.
- Sales and profits should eventually rebound as 5G smart phone and data center related demand continue to grow, and after new capacity comes on line in 2024.
- First rate IC substrate and printed wiring board technology, and sound finances, make the company a candidate for long-term investment.
COSCO Shipping Energy (1138 HK): Ahead of the Curve…but Too Much
- Share price of Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK) has rallied 55.7% over the last four months, and we believe it is now prudent to trim position.
- P/B valuation is almost at 5-year high and over 2SD above historical average, but ROE for FY22F is still shy of the peak level achieved in such period.
- There is downgrade risk for FY22F consensus profit of Rmb1.6bn given 1Q22 profit of just Rmb25m, and near-term retreat in spot rate does not bode well for CSET.
Power Mech Projects – Result Above Expectations; Rs36bn Revenue Guidance Given
- Strong ordering pipeline, margins to improve going forward: The company has received two orders worth Rs2.97bn in 1QFY23.
- Working capital position: Working capital days at the end of 4QFY22 saw an improvement to 145 days vs 194 days at the end of 4QFY21 and 180 days at the end of 3QFY22.
- Outlook: We expect revenue/earnings CAGR of 29.3%/42.4% over FY22-FY24E. Current valuation is inexpensive considering the company’s healthy order book, low D/E and decent RoCE (18% in FY20).
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.
Thermax – Weak Profitability Offsets Strong Topline Growth; Strong Order Inflow
- Strong order inflow indicates broad-based recovery: Thermax posted consolidated order inflow of Rs33.96bn, up 127% YoY, aided by a broad-based industrial recovery.
- Other business updates: (1) Chemicals segment margins were affected due to the company’s inability to pass on elevated costs through sufficient price hikes and geopolitical tensions.
- Outlook and valuation: We expect Thermax to report 34%/46.2% revenue/earnings CAGR over FY22- FY24E. The stock is currently trading at 46.5x FY23E EPS.
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.
Before it’s here, it’s on Smartkarma
