In today’s briefing:
- Sembcorp Marine & Keppel O&M: STI Inclusion Possibility & Other Index Flow
- MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends
- Sumitomo Elec Buys Out Sub Techno Associé) At ¥1,695/Share – Insulting Explanation. Deserves More.
- Sumitomo Electric Buys Out Sub Nissin Electric (6641) At ¥1,700/Share – ATH But Still Too Low
- Pertamina Geothermal Energy IPO: Offering Details & Index Inclusion
- Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023
- Hesai Group Pre-IPO – Peer Comparison – Not Really the Largest, Globally or Locally
- Pertamina Geothermal IPO: The Investment Case
- Pertamina Geothermal Energy IPO – Thoughts on Valuation
- Pushpay Holdings: 3rd March Scheme Meeting. IA Says Fair
Sembcorp Marine & Keppel O&M: STI Inclusion Possibility & Other Index Flow
- The Sembcorp Marine (SMM) EGM is scheduled for 16 February. If approved by shareholders, the Asset Co transaction and completion of the KOM restructuring will be done by 28 February.
- We expect no market trade from FTSE trackers, buying from MSCI trackers, while there is a question mark over treatment in the FTSE Straits Times Index (STI) (STI INDEX).
- There could be selling in Sembcorp Marine (SMM SP) from active Keppel Corp (KEP SP) shareholders and that could have a bigger impact on the stock.
MSCI Feb 2023 QCIR Preview: Potential Changes as Review Period Ends
- The review period for the February Quarterly Comprehensive Index Review (QCIR) of the MSCI indices ended yesterday. There will be a number of changes in the Asia Pacific region.
- Most of the inclusions are in China and the country weight in the MSCI Emerging Markets Index should increase leading to outflows from other markets.
- On average, the potential adds have outperformed the potential deletes over the last few weeks. At a glance, pre-positioning appears to be lighter than in the past.
Sumitomo Elec Buys Out Sub Techno Associé) At ¥1,695/Share – Insulting Explanation. Deserves More.
- Sumitomo Electric Industries (5802 JP) is taking over to subs through tender offers. Both are light. Both this one for Techno Associe (8249 JP) and the one for Nissin Electric.
- Both deals are light -slightly offensive, but in different ways. The Board decisions are more offensive than the actual prices, but it’s Sumi Elec buying, so those are offensive too.
- There’s a history here. Sumi Elec went to 51% at an offensively low price (EV/EBITDA below zero) in 2019. But this is probably a done deal anyway.
Sumitomo Electric Buys Out Sub Nissin Electric (6641) At ¥1,700/Share – ATH But Still Too Low
- Sumitomo Electric Industries (5802 JP) has announced a takeover of two of its subsidiaries today. The larger one is Nissin Electric (6641 JP).
- This deal, done for governance purposes, hits an all-time high price. But, like others, it ignores synergies in pricing, has an inadequate premium, and process is just bad.
- But given the shareholder structure, this is highly likely to sail through un-molested.
Pertamina Geothermal Energy IPO: Offering Details & Index Inclusion
- Pertamina Geothermal (0125738D IJ) is offering 10.35bn shares in its IPO at a price range of IDR 820-945/share to raise between US$567-653m and valuing the company between US$2.27-2.61bn.
- The stock will not get fast entry to the MSCI, FTSE or local Indonesia indices (IDX30 Index/ LQ45 Index/ IDX80 Index).
- The stock should be added to MSCI Small Cap in May and to the FTSE All-Cap in September bringing in some passive flow.
Dentium: An Undervalued Corporate Activist Target + Likely Inclusion Candidate for KOSPI 200 in 2023
- We believe Dentium is an attractive stock to own right now. It has an excellent combination of strong growth in sales and profits and discounted valuations.
- Driven by its strong share price appreciation in the past year, Dentium now has become a strong candidate for a potential inclusion in KOSPI 200 index in 2023.
- There is a growing probability that Dentium could be targeted by corporate activists to pressure the company to cancel treasury shares and provide higher dividends.
Hesai Group Pre-IPO – Peer Comparison – Not Really the Largest, Globally or Locally
- Hesai Group (HSAI US) is looking to raise at least US$100m in its upcoming US IPO.
- HSAI is a manufacturer of three-dimensional light detection and ranging (Lidar) solutions. It has shipped over 103,000 Lidar units from 2017 to the end of 2022.
- In this note, we will undertake a peer comparison with domestic and US-listed peers.
Pertamina Geothermal IPO: The Investment Case
- Pertamina Geothermal (0125738D IJ)/PGE, a subsidiary of PT Pertamina (Persero) (PERT IJ), is seeking to raise up to US$657 million at a price range of IDR820-945 per share.
- PGE is the largest geothermal concession holder in Indonesia, in terms of capacity installed, according to Wood Mackenzie.
- The investment case rest on steady growth, high margins, strong cash generation, manageable leverage, ambitious growth plans and attractive dividend payout.
Pertamina Geothermal Energy IPO – Thoughts on Valuation
- Pertamina Geothermal Energy (PGE) is looking to raise around US$650m in its upcoming Indonesia IPO. PGE is an Indonesian state owned power producer which utilizes geothermal energy to produce electricity.
- PGE currently manages 13 Geothermal Working Areas with a total capacity of 1,877 MW, of which 672 MW is owned by it, while 1,205 MW is via joint operations.
- We have looked at the company’s performance in our previous note. In this note, we talk about valuations.
Pushpay Holdings: 3rd March Scheme Meeting. IA Says Fair
- Back on the 28 October, church donor management play Pushpay Holdings (PPH NZ/PPH AU) announced a Scheme with BGH/Sixth Street at NZ$1.34/share, a 30.1% premium to undisturbed.
- The Scheme Booklet is now out. The shareholder meeting will take place on the 3 March. The independent advisor concluded the Offer price is within its valuation range.
- Assuming 11 April payment, this is trading at a gross/annualised spread of 3.0%/18.0%.
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