Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<p>I have written about parent-subsidiary listings several times, and with the upcoming market reclassification by the Tokyo Stock Exchange, there has been a lot of interest in moves to dissolve parent-subsidiary listings. On June 23, at the annual shareholders' meeting of Hitachi, Ltd. (6501), in response to a shareholder's question about whether the company should take in listed subsidiary Hitachi Construction Machinery (6305) as a wholly owned subsidiary or sell it, it was reported that Mamoru Morita, Executive Senior Officer in charge of strategic planning, responded that "We will strive to reach a conclusion by the end of fiscal 2021".  With the announcement of the sale of Hitachi Metals in April this year, Hitachi Construction Machinery will be the only listed subsidiary remaining, and the handling of this subsidiary will naturally attract attention.</p>

I have written about parent-subsidiary listings several times, and with the upcoming market reclassification by the Tokyo Stock Exchange, there has been a lot of interest in moves to dissolve parent-subsidiary listings. On June 23, at the annual shareholders' meeting of Hitachi, Ltd. (6501), in response to a shareholder's question about whether the company should take in listed subsidiary Hitachi Construction Machinery (6305) as a wholly owned subsidiary or sell it, it was reported that Mamoru Morita, Executive Senior Officer in charge of strategic planning, responded that "We will strive to reach a conclusion by the end of fiscal 2021".  With the announcement of the sale of Hitachi Metals in April this year, Hitachi Construction Machinery will be the only listed subsidiary remaining, and the handling of this subsidiary will naturally attract attention.

Japan's Governance: Parent-Subsidiary Listing Dissolution and ROIC

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

Hitachi Construction Machinery / Event-Driven

<p>HCM was up as much as 7.2% at one point today after a strong intraday rise in the lunch session. The driver was commentary from parent Hitachi at its AGM where it suggested that it would decide this year whether to sell its stake in HCM or make it a fully consolidated subsidiary.</p>

HCM was up as much as 7.2% at one point today after a strong intraday rise in the lunch session. The driver was commentary from parent Hitachi at its AGM where it suggested that it would decide this year whether to sell its stake in HCM or make it a fully consolidated subsidiary.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p><a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> has, for over a decade, been restructuring itself by selling subsidiaries here and buying them in there. There are two remaining after the somewhat recent sale of <a href="https://www.smartkarma.com/entities/hitachi-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:14457:1" rel="noopener">Hitachi Chemical (4217 JP)</a>, de-consolidation of <a href="https://www.smartkarma.com/entities/hitachi-capital-corp" target="_blank" data-smartkarma-citation="entities:14410:1" rel="noopener">Hitachi Capital (8586 JP)</a>, and buy-in of <a href="https://www.smartkarma.com/entities/hitachi-high-tech-corporation" target="_blank" data-smartkarma-citation="entities:7046:1" rel="noopener">Hitachi High-Tech (8036 JP)</a> (after a flurry of other deals to sell out stakes in <a href="https://www.smartkarma.com/entities/hitachi-kokusai-electric-inc" target="_blank" data-smartkarma-citation="entities:2523:1" rel="noopener">Hitachi Kokusai Electric (6756 JP)</a>, <a href="https://www.smartkarma.com/entities/hitachi-koki-co-ltd" target="_blank" data-smartkarma-citation="entities:18359:1" rel="noopener">Hitachi Koki (6581 JP)</a>, Hitachi Maxell and Clarion in the previous few years).</p>
<p>In October last year, I addressed the issue of the selldown of the last two <a href="https://www.smartkarma.com/entities/hitachi-metals-ltd" target="_blank" data-smartkarma-citation="entities:8561:1" rel="noopener">Hitachi Metals (5486 JP)</a> and <a href="https://www.smartkarma.com/entities/hitachi-construction-machinery" target="_blank" data-smartkarma-citation="entities:19433:1" rel="noopener">Hitachi Construction Machinery (6305 JP)</a> in <a href="https://www.smartkarma.com/insights/the-right-trade-may-be-hitachi" target="_blank" data-smartkarma-citation="insights:44551" rel="noopener">The Right Trade May Be Hitachi</a>, which argued that Hitachi itself was probably the better deal than the subs. Since then, Hitachi is up 39.3%, <a href="https://www.smartkarma.com/entities/hitachi-construction-machinery" target="_blank" data-smartkarma-citation="entities:19433:1" rel="noopener">Hitachi Construction Machinery (6305 JP)</a> is up 3.6%, and <a href="https://www.smartkarma.com/entities/hitachi-metals-ltd" target="_blank" data-smartkarma-citation="entities:8561:1" rel="noopener">Hitachi Metals (5486 JP)</a> is up 23%. </p>
<p><a href="https://www.smartkarma.com/profiles/mio-kato" target="_blank" data-smartkarma-citation="accounts:713" rel="noopener">Mio Kato</a> has written a few times about Hitachi Metals and about how one might not be able to expect a very high takeout price through the sale process that Hitachi was running. I wholly agreed with Mio, because I think it is not an easy asset to sell later, but I couldn't come up with a reason to sell the stock because I expect funding is available, costs can be cut, Hitachi might keep 20% and sell a call option to help with funding, and if a company needs a lot of work to restructure, I am sure that Bain Consulting could be prevailed upon to provide their consulting services for a price (one of the dirty little secrets of private equity is that GPs get management and incentive fees on assets and sales, but profits in the interim come with costs, and some of those costs can be allocated to the GP as well).</p>
<p>Hitachi took in bids earlier this spring after running an auction process and three weeks ago an <a href="https://www.ft.com/content/659a5857-9369-4f9b-8595-06bb89888772" target="_blank" rel="noopener">article</a> in the FT hit the tape saying<em> "Bain nears $8bn deal to buy Hitachi Metals." </em>That was around current market price give or take net debt so people were thinking there might not be a premium.</p>
<div class="content-highlight">
<p>Today, we got a deal announcement. Indeed, Bain is paying near US$8bn, but it is structured in such a way that Bain pays ¥1675/share to Hitachi and ¥2181/share to minorities, which produces a combined price just over ¥1900/share.</p>
<p>This approximates a decent result for everyone involved.  </p>
</div>
<p>More below the fold. </p>

Hitachi Ltd (6501 JP) has, for over a decade, been restructuring itself by selling subsidiaries here and buying them in there. There are two remaining after the somewhat recent sale of Hitachi Chemical (4217 JP), de-consolidation of Hitachi Capital (8586 JP), and buy-in of Hitachi High-Tech (8036 JP) (after a flurry of other deals to sell out stakes in Hitachi Kokusai Electric (6756 JP), Hitachi Koki (6581 JP), Hitachi Maxell and Clarion in the previous few years).
In October last year, I addressed the issue of the selldown of the last two Hitachi Metals (5486 JP) and Hitachi Construction Machinery (6305 JP) in The Right Trade May Be Hitachi, which argued that Hitachi itself was probably the better deal than the subs. Since then, Hitachi is up 39.3%, Hitachi Construction Machinery (6305 JP) is up 3.6%, and Hitachi Metals (5486 JP) is up 23%. 
Mio Kato has written a few times about Hitachi Metals and about how one might not be able to expect a very high takeout price through the sale process that Hitachi was running. I wholly agreed with Mio, because I think it is not an easy asset to sell later, but I couldn't come up with a reason to sell the stock because I expect funding is available, costs can be cut, Hitachi might keep 20% and sell a call option to help with funding, and if a company needs a lot of work to restructure, I am sure that Bain Consulting could be prevailed upon to provide their consulting services for a price (one of the dirty little secrets of private equity is that GPs get management and incentive fees on assets and sales, but profits in the interim come with costs, and some of those costs can be allocated to the GP as well).
Hitachi took in bids earlier this spring after running an auction process and three weeks ago an article in the FT hit the tape saying "Bain nears $8bn deal to buy Hitachi Metals." That was around current market price give or take net debt so people were thinking there might not be a premium.

Today, we got a deal announcement. Indeed, Bain is paying near US$8bn, but it is structured in such a way that Bain pays ¥1675/share to Hitachi and ¥2181/share to minorities, which produces a combined price just over ¥1900/share.
This approximates a decent result for everyone involved.  

More below the fold. 

Bain Bids Up BIG For Hitachi Metals (5486) - Now We Wait

<p>On Thursday, the Nikkei came out with an <a href="https://asia.nikkei.com/Economy/BOJ-to-widen-interest-rate-target-range-to-support-bank-profits" target="_blank" rel="noopener">article</a> during the lunch break of equities trading. The headline said <em>"BOJ to widen interest rate target range to support bank profits" </em>and indeed in the article it noted that the BOJ would allow the long end of the curve to fluctuate more widely, creating a slightly steeper curve. This could lead to slightly better bank profits less because of the extra 5bp on the curve but more because of the expectation of forcing borrowers to pay more on an absolute basis. </p><p>What was MORE important for equity markets was the idea that the BOJ <em>"would also abolish its target for purchasing exchange-traded funds, now 6 trillion yen ($55 billion) per year, and instead vow to make such purchases only in times of market turmoil."</em></p><p>The article also suggested that the "Target" would be removed for the ¥90bn of J-REITs they buy as a base case (doubled now to ¥180bn as the ¥6trln was doubled to ¥12trln in the depths of the covid crash of March 2020). </p><p>This move caused Nikkei to underperform TOPIX on the day. TOPIX actually ended up on the day, and ended above where the market closed the AM session before the article came out. Nikkei fell, and started underperforming TOPIX from that point on. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/195/872/original/Screenshot+2021-03-21+at+3.26.17+PM.png?1616311594" class="editor-image img-responsive" data-smartkarma-image-id="195872"></figure><p></p></section><p>Nikkei underperformed TOPIX in the AM session on Friday, and when the BOJ announcements came mid-day on Friday, there were additional subtleties involved. </p><p>The details are <a href="https://www.boj.or.jp/en/announcements/release_2021/rel210319c.pdf" target="_blank" rel="noopener">here</a>. The presentation with the basic details is <a href="https://www.boj.or.jp/en/announcements/release_2021/k210319b.pdf" target="_blank" rel="noopener">here</a>.</p><ul>
<li>The target rates for ETF and REIT buying will be abolished, but the current "Target Rate" of annual buying will become annual maxima (¥12 trillion for ETFs, ¥180bn for J-REITs, with ongoing maximum ownership limits on ETFs in place).</li>
<li>Buying of ETFs and J-REITs will be conducted "as necessary" "in times of market turbulence" and such buying will be done only on TOPIX ETFs.</li>
<li>The "Special Rules for Purchases of ETFs to Support Firms Proactively Investing in Physical and Human Capital" will continue as before with only specific ETFs permitted in this group. The amount of ~¥300bn/year and ¥1.2bn per business day will continue.</li>
</ul><p>It based the new policy on the Reference <a href="https://www.boj.or.jp/en/announcements/release_2021/k210319c.pdf" target="_blank" rel="noopener">document</a> which backs up the changes in policy is <em>much</em> more interesting reading.  Appendix 5 and Chart 12 are the parts you want to read.</p><p>The hypotheses and results are described here.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/195/869/original/Screenshot+2021-03-21+at+3.02.28+PM.png?1616310186" class="editor-image img-responsive" data-smartkarma-image-id="195869"></figure></section><p>There are a couple of other side conclusions but the base understanding is...</p><div class="content-highlight"><p>When the BOJ steps into the market in size, in times of market turbulence, and when stocks are trading below their medium-term average, it has a greater effect per dollar spent on market-wide risk premia as measured in option premia than buying in normal times, and size matters when looking at the risk premia change on single stocks.  </p></div><h3>What This Means</h3><ul>
<li>When the BOJ steps into the market in size, in times of market turbulence, and when stocks are trading below their medium-term average, it has a greater effect per dollar spent on market-wide risk premia as measured in option premia than buying in normal times, and size matters when looking at the risk premia change on single stocks.  </li>
<li>Expect the BOJ to follow the concept of its study (Appendix 5 again).</li>
<li>Expect the BOJ to pay greater attention to futures activity. </li>
</ul><h3>What This Does NOT Mean</h3><ul><li>It does NOT mean the BOJ will be selling any ETFs.</li></ul><hr><p>It is worthwhile taking a look at WHY the market reacted the way it did on Thursday and Friday afternoon, and it is worthwhile looking at what the BOJ ETF buying might look like going forward. </p><p>So we do so below the fold.</p><p>Note: This is part 1 of the analysis of potential future BOJ ETF Buying. Part II looks at the difference in single stock makeup. </p>

On Thursday, the Nikkei came out with an article during the lunch break of equities trading. The headline said "BOJ to widen interest rate target range to support bank profits" and indeed in the article it noted that the BOJ would allow the long end of the curve to fluctuate more widely, creating a slightly steeper curve. This could lead to slightly better bank profits less because of the extra 5bp on the curve but more because of the expectation of forcing borrowers to pay more on an absolute basis. What was MORE important for equity markets was the idea that the BOJ "would also abolish its target for purchasing exchange-traded funds, now 6 trillion yen ($55 billion) per year, and instead vow to make such purchases only in times of market turmoil."The article also suggested that the "Target" would be removed for the ¥90bn of J-REITs they buy as a base case (doubled now to ¥180bn as the ¥6trln was doubled to ¥12trln in the depths of the covid crash of March 2020). This move caused Nikkei to underperform TOPIX on the day. TOPIX actually ended up on the day, and ended above where the market closed the AM session before the article came out. Nikkei fell, and started underperforming TOPIX from that point on. Nikkei underperformed TOPIX in the AM session on Friday, and when the BOJ announcements came mid-day on Friday, there were additional subtleties involved. The details are here. The presentation with the basic details is here.
The target rates for ETF and REIT buying will be abolished, but the current "Target Rate" of annual buying will become annual maxima (¥12 trillion for ETFs, ¥180bn for J-REITs, with ongoing maximum ownership limits on ETFs in place).
Buying of ETFs and J-REITs will be conducted "as necessary" "in times of market turbulence" and such buying will be done only on TOPIX ETFs.
The "Special Rules for Purchases of ETFs to Support Firms Proactively Investing in Physical and Human Capital" will continue as before with only specific ETFs permitted in this group. The amount of ~¥300bn/year and ¥1.2bn per business day will continue.
It based the new policy on the Reference document which backs up the changes in policy is much more interesting reading.  Appendix 5 and Chart 12 are the parts you want to read.The hypotheses and results are described here.There are a couple of other side conclusions but the base understanding is...When the BOJ steps into the market in size, in times of market turbulence, and when stocks are trading below their medium-term average, it has a greater effect per dollar spent on market-wide risk premia as measured in option premia than buying in normal times, and size matters when looking at the risk premia change on single stocks.  What This Means
When the BOJ steps into the market in size, in times of market turbulence, and when stocks are trading below their medium-term average, it has a greater effect per dollar spent on market-wide risk premia as measured in option premia than buying in normal times, and size matters when looking at the risk premia change on single stocks.  
Expect the BOJ to follow the concept of its study (Appendix 5 again).
Expect the BOJ to pay greater attention to futures activity. 
What This Does NOT MeanIt does NOT mean the BOJ will be selling any ETFs.It is worthwhile taking a look at WHY the market reacted the way it did on Thursday and Friday afternoon, and it is worthwhile looking at what the BOJ ETF buying might look like going forward. So we do so below the fold.Note: This is part 1 of the analysis of potential future BOJ ETF Buying. Part II looks at the difference in single stock makeup. 

Quantifying the BOJ Change in ETF Policy: Assessing Future ETF Buying Methodology

Equity Bottom-Up

Hitachi Construction Machinery / Equity Bottom-Up

<h2>Revenue Guidance Overly Conservative</h2><p>HCM reported its 3QFY21 results on Friday (29th January) which saw both revenues and OP decrease YoY by 4.3% and 30.6% respectively with the deterioration in its profitability mainly due to the impact of lower sales volume in 3QFY21. However, the reported revenue was 1.6% higher than consensus while OP was -23.1% lower.</p><div><table class="table table-striped"><tbody>
<tr>
<td rowspan="2" style="width: 23.9%;"><p style="text-align: center;"><strong>In ¥m</strong></p></td>
<td colspan="3" style="width: 76.1%;"><p style="text-align: center;"><strong>3QFY21</strong></p></td>
</tr>
<tr>
<td style="width: 29.8%;"><p style="text-align: center;"><strong>Actual Results</strong></p></td>
<td style="width: 30.4%;"><p style="text-align: center;"><strong>Consensus</strong></p></td>
<td style="width: 15.9%;"><p style="text-align: center;"><strong>Surprise</strong></p></td>
</tr>
<tr>
<td style="width: 23.9%;"><p>Revenue</p></td>
<td style="width: 29.8%;"><p style="text-align: right;">                             197,825</p></td>
<td style="width: 30.4%;"><p style="text-align: right;">                              194,733</p></td>
<td style="width: 15.9%;"><p style="text-align: right;">1.6%</p></td>
</tr>
<tr>
<td style="width: 23.9%;"><p>Operating Profit</p></td>
<td style="width: 29.8%;"><p style="text-align: right;">                                  9,749</p></td>
<td style="width: 30.4%;"><p style="text-align: right;">                                 12,675</p></td>
<td style="width: 15.9%;"><p style="text-align: right;">-23.1%</p></td>
</tr>
<tr>
<td style="width: 23.9%;"><p>OPM</p></td>
<td style="width: 29.8%;"><p style="text-align: right;">4.9%</p></td>
<td style="width: 30.4%;"><p style="text-align: right;">6.5%</p></td>
<td style="width: 15.9%;"><p style="text-align: right;">-1.6% points</p></td>
</tr>
</tbody></table></div><div style="text-align: left;" class="content-caption"><em>Source: Company disclosures, CapIQ</em></div><p>The company has not changed its full year guidance for FY21 and expects revenue and OP of ¥211bn (-13.5% YoY) and ¥21bn (-1% YoY, implying an OPM of 10.4%) respectively in 4QFY21.</p><p>HCM's revenue expectation for 4QFY21 is 9.0% lower than consensus while OP is 6% higher than consensus implying an OPM of 10.3%.</p><table class="table table-striped"><tbody>
<tr>
<td style="width: 29.1%;"><p><strong>In ¥m</strong></p></td>
<td style="width: 34.96%;"><p style="text-align: center;"><strong>Expected 4QFY21</strong></p></td>
<td style="width: 35.94%;"><p style="text-align: center;"><strong>Guidance – FY21</strong></p></td>
</tr>
<tr>
<td style="width: 29.1%;"><p>Net sales</p></td>
<td style="width: 34.96%;"><p style="text-align: right;">                             211,273</p></td>
<td style="width: 35.94%;"><p style="text-align: right;">                              770,000</p></td>
</tr>
<tr>
<td style="width: 29.1%;"><p>Operating income</p></td>
<td style="width: 34.96%;"><p style="text-align: right;">                               21,702</p></td>
<td style="width: 35.94%;"><p style="text-align: right;">                                 40,000</p></td>
</tr>
<tr>
<td style="width: 29.1%;"><p>OPM</p></td>
<td style="width: 34.96%;"><p style="text-align: right;">10.3%</p></td>
<td style="width: 35.94%;"><p style="text-align: right;">5.2%</p></td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption"><em>Source: Company disclosures, CapIQ</em></div>

Revenue Guidance Overly ConservativeHCM reported its 3QFY21 results on Friday (29th January) which saw both revenues and OP decrease YoY by 4.3% and 30.6% respectively with the deterioration in its profitability mainly due to the impact of lower sales volume in 3QFY21. However, the reported revenue was 1.6% higher than consensus while OP was -23.1% lower.

In ¥m
3QFY21


Actual Results
Consensus
Surprise


Revenue
                             197,825
                              194,733
1.6%


Operating Profit
                                  9,749
                                 12,675
-23.1%


OPM
4.9%
6.5%
-1.6% points

Source: Company disclosures, CapIQThe company has not changed its full year guidance for FY21 and expects revenue and OP of ¥211bn (-13.5% YoY) and ¥21bn (-1% YoY, implying an OPM of 10.4%) respectively in 4QFY21.HCM's revenue expectation for 4QFY21 is 9.0% lower than consensus while OP is 6% higher than consensus implying an OPM of 10.3%.

In ¥m
Expected 4QFY21
Guidance – FY21


Net sales
                             211,273
                              770,000


Operating income
                               21,702
                                 40,000


OPM
10.3%
5.2%

Source: Company disclosures, CapIQ

Japan

Kurita Water Industries Ltd. manufactures, sells, and maintains water treatment equipment and systems.  The Company's products include water purification and waste water treatment equipment as well as soil remediation systems.  Kurita also manufactures and sells chemicals for water treatment related to sanitation, air-conditioning, and construction.

EBARA CORPORATION manufactures pneumatic and hydraulic pumps and related equipment.  The Company's products include fuel, oil, water, and firefighting pumps, as well as steam turbines and boilers.  Ebara Corporation also engineers garbage incinerators, smoke desulfurizers, and other products related to environmental technology.

IHI Corporation manufactures heavy machinery. The Company produces aircraft jet engines, rocket propulsion systems, and ships for military and commercial use. Ishikawajima-Harima also constructs petroleum refineries and nuclear power plants.

HOSHIZAKI ELECTRIC CORPORATION manufactures and sells commercial use kitchen equipment such as freezers, refrigerators, food/beverage dispensers.  The Company has sales subsidiaries across Japan as well as overseas.

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

DAIFUKU CO., LTD. designs, manufactures, and sells material handling equipment such as automated storage systems, conveyors, and automatic sorters.  The Company's products are used for automation in manufacturing and distribution businesses.

SUMITOMO HEAVY INDUSTRIES, LTD. manufactures and markets heavy electric machinery.  The Company's operations include heavy machinery, shipbuilding, mass-production machinery, environmental equipment, and construction machinery divisions.  Sumitomo Heavy Industries also produces equipment for semiconductor and laser technologies.

Minebea Mitsumi manufactures and markets miniature and instrument ball bearings.  The Company also makes DC motors, servo motors, stepping motors, spindle motors, pivot assemblies, rod-end and spherical bearings, fasteners, and computer keyboards. Minebea Mitsumi has production facilities in Thailand and Singapore.

DMG MORI CO., LTD. manufactures and markets machine tools and related products. The Company's product line includes numerical control (NC) and high-speed precision lathes, horizontal and vertical machining centers (MCs), and other stationary machine tools capable of performing various tasks.

NGK Insulators, Ltd. manufactures and sells electrical insulators, industrial ceramic products, environmental systems, and electronic parts. The Company's products include ceramic catalyst carrier for exhaust gas purification, automotive honeycombs for exhaust filtering, gas analyzers, high pressure compaction systems, and sewer cleaning equipment.

Samsung Heavy Industries Co., Ltd. manufactures crude oil tankers, container vessels, bulk carriers, cruisers, and passenger ferries.  The Company also produces steel and bridge structures, and material handling equipment.  In addition, Samsung Heavy Industries provides civil engineering, architectural, and plant construction services.

Seatrium Ltd offers engineering solutions for the offshore, marine, and energy industries. The Company provides rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding. Seatrium serves customers worldwide.

Yangzijiang Shipbuilding (Holdings) Limited builds a wide range of ships. The Company produces a wide range of commercial vessels, mini bulk carriers, multi-purpose cargo vessels, containerships, chemical tankers, offshore supply vessels, rescue and salvage vessels, and lifting vessels.

AGCO Corporation manufactures and distributes agricultural equipment throughout the world.  The Company sells a range of agricultural equipment and related replacement parts, including tractors, combines, hay tools, sprayers, and forage equipment.  AGCO markets its products under a variety of brand names, including Massey Ferguson, AGCO, Tye, GLEANER, and Hesston.

Thermax Ltd manufactures equipment and machinery used to both produce and to conserve energy. The Company operates through a number of divisions, including Boilers, Heat Recovery Steam Generators, Water Treatment Plants and Air Pollution Control Equipment. In addition, Thermax  produces steam and gas turbines and diesel gensets through a number of strategic alliances.

Watts Water Technologies, Inc. designs, manufactures, and sells a line of products to the water regulation and control markets.  The Company has manufacturing plants and distribution channels in the United States, Canada, and Europe, as well as a joint venture in The People's Republic of China.

Chart Industries, Inc. is a global manufacturer of equipment used in the production, storage, and end-use of hydrocarbon and industrial gases. The Company's products include vacuum-insulated containment vessels, heat exchangers, cold boxes, and other cryogenic components.

Zoomlion Heavy Industry Science and Technology Co., Ltd.manufactures and markets construction machinery.  The Company's products include concrete machinery, cranes, road machinery, drilling equipment, and other heavy construction equipment.  Zoomlion also produces environmental machinery and satellite navigation products.

Suzhou Dongshan Precision Manufacturing Co., Ltd. develops, manufactures and sells precision metal plate and cast metal.  The Company's products include communication equipment precision metal part, and machine bed precision metal part.

Hanwha Ocean Co., Ltd. operates as a shipbuilding and offshore company. The Company provides floating structure construction, steel wire drying, commercial vessels, specialty vessels, gas carrier, tanker, containership, ro ro, bulk carrier, submarine, warship, auxiliaries, cruise ships, and ferries manufacturing services. Hanwha Ocean also offers onshore plants services.

Hitachi Construction Machinery Co., Ltd. develops, manufactures, sells, and repairs construction machinery. The Company's products include hydraulic excavators, crawler cranes, wheel loaders, shield machines, and bulldozers. Hitachi Construction Machinery, a subsidiary of Hitachi, Ltd., markets its products worldwide through sales offices overseas.

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Hitachi Construction Machinery (6305 JP)

Japan's Governance: Parent-Subsidiary Listing Dissolution and ROIC

it is expected that there will be an increase in the use of KPIs in management strategies such as growth strategies, with an awareness of the cost...

Metrical Inc

Hitachi Construction – TOB Head-Fake

Commentary from Hitachi at its AGM that it would decide this year whether to sell its stake in HCM or make it a fully consolidated subsidiary...

Mio Kato

Bain Bids Up BIG For Hitachi Metals (5486) - Now We Wait

Hitachi has agreed to sell Hitachi Metals to Bain/JIP/JIS. It is a complex transaction designed to get Hitachi out, get minorities a premium, get...

Travis Lundy

Quantifying the BOJ Change in ETF Policy: Assessing Future ETF Buying Methodology

The BOJ has announced a change in ETF Buying Program Parameters. The study/review they did is required reading to understand how they might buy...

Travis Lundy

HCM - Favour HCM over Komatsu for Now

HCM's guidance looks conservative on the revenue line though margins have been disappointing. However, there are signs of underlying improvement...

Mio Kato

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