Zhitong Finance and Economics Network
This article is transferred from the official account of Wechat, "American Stock big data".
Among the electric vehicle stocks listed in backdoor, TPG PaceBeneficial Finance (TPGY.US) looks very attractive, especially in the light of its recent price decline. The backdoor listed company will work with electric vehicle charging company EVBox GroupMerge。
EVBox is currently a wholly owned subsidiary of French utility giant Engie SA, focusing first on its home market, the European market. But looking around the world, it has the potential to become one of the major players in this fast-growing industry.
With electric car stocks on a downward trend, you might think, why buy now? If investors continue to exit the sector, the blank check company is likely to continue to fall, possibly retreating towards its offering price of $10. Admittedly, this is possible.
But this stockHas fallen to $20 a share.It is no longer worth haggling over to seize the opportunity of the market. The stock is unlikely to fall back to $10 a share, but is likely to rise to a higher price. With its past success and its impact on the European market, it is likely to expand faster than its competitors.
Why EVBox has so much potential
The backdoor listed company was launched by TPG, a private equity firm, and aims to merge with a company that meets ESG (environmental, social and governance) standards. With EVBox, it found the perfect merger target. Some backdoor listed companies that want to become electric car companies have chosen early electric car manufacturers as mergers and acquisitions targets. There are a lot of ambitious electric car manufacturers.
However, in the face of fierce competition from well-known electric car brands and existing carmakers, only a few companies will eventually be the winners. However, in areas such as electric car charging, new companies have more opportunities to capture considerable market share. This is the case with EVBox. Competition is likely to intensify. But the company's early success was enough to matchBlink Charging (BLNK.US)And ChargePoint (SBE.US) and other companies to compete.
In short, you can see why the backdoor listed company decided to use EVBox as its merger candidate. Of course, it is not enough for a company to have a good prospect and make its underlying stock worth buying. Getting a fair (or higher than fair) valuation is the key. Fortunately, the same is true of TPGY stocks today. On February 18, we concluded that the company's share price of about $30 a share appeared to be grossly undervalued. Now, at current prices, they seem cheaper than expected.
Like almost all other SPAC, investors actively pushed up the share price of TPG Pace after the news of the merger deal broke out. At one point, the share price was more than three times its offering price of $10. But now, as growth stocks tend to fall, the share price has fallen back to $20 a share. This means that investors who buy the stock near a high will suffer huge losses in the short term.
However, those who follow it now may buy it at a price that looks cheap in hindsight. Why? Let's do the math. Once the merger is completed, the number of shares in the company will increase to 139 million shares, according to estimates provided in an investor report in December. At $20 a share, the market capitalization is about $2.8 billion. Excluding the $425 million in net cash generated by the deal, the company is worth about $2.4 billion.
Comparing today's implied enterprise value with expected earnings in 2023 (372 million euros, or $450.6 million), the valuation looks very attractive. Of course, whether the stock is "hot" depends on whether it meets expectations. However, given the opportunities in its home market, this may be one of the few SPAC that converts slide projections into tangible results.
Summary of TPGY stocks
There is another one for the SPAC merger speech.Interesting points to watch:From the point of view of Europe as a whole. Since the company is still focused on Europe, which is promoting electrification more aggressively, EVBox is likely to turn a profit faster than its US counterparts. Given this extra advantage, coupled with incredible implied valuations, TPGY shares seem to be a huge opportunity as the recent "electric car craze" fades.
(editor: Peng Weifeng)