Industrials

• Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
• After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December. 
• In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge. 

• November’s pricing weakness vs Summer peak is among the sharpest declines in 10+ years
• A work stoppage at some US ports could hit in January, but impact likely muted
• Share prices under pressure as investors begin pricing in softer conditions in 2025

• Back on the 15th May, a consortium (Khazanah Nasional, EPF, the Abu Dhabi Investment Authority, and Global Infrastructure Partners) collectively holding 41.22%, launched an Offer for Malaysia Airports (MAHB MK).
• After some political gymnastics, MAHB squared away the necessary regulatory approvals, and a firm Offer was made on the 15th November. The Offer Doc dispatched on the 6th December. 
• In the Circular on Friday, the IFA said NOT fair – with reference to a SOTP; but reasonable referencing historical market pricing and that no competing Offer will emerge. 

• November’s pricing weakness vs Summer peak is among the sharpest declines in 10+ years
• A work stoppage at some US ports could hit in January, but impact likely muted
• Share prices under pressure as investors begin pricing in softer conditions in 2025

• Honeywell International has recently become the center of investor attention following mounting pressure from activist investor Elliott Investment Management.
• With a massive $5 billion stake, Elliott has called for the separation of Honeywell’s aerospace business, pushing the industrial giant toward a portfolio realignment.
• Honeywell’s board announced that it is actively considering a potential aerospace spin-off, signaling a possible strategic transformation.

• In this edition: • Basic-Fit | urged by Impactive Capital to commence share buyback • InPost / DHL | DHL enters transformative deal on Iberic Peninsula with Portugal’s CTT • SBM Offshore | sells FPSO Liza Destiny to ExxonMobil for USD 535m

• Honeywell International has recently become the center of investor attention following mounting pressure from activist investor Elliott Investment Management.
• With a massive $5 billion stake, Elliott has called for the separation of Honeywell’s aerospace business, pushing the industrial giant toward a portfolio realignment.
• Honeywell’s board announced that it is actively considering a potential aerospace spin-off, signaling a possible strategic transformation.

• In this edition: • Basic-Fit | urged by Impactive Capital to commence share buyback • InPost / DHL | DHL enters transformative deal on Iberic Peninsula with Portugal’s CTT • SBM Offshore | sells FPSO Liza Destiny to ExxonMobil for USD 535m

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
• Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• With the Fed shock pushing the won past 1,450 and the KOSPI down, it’s time to dig into the stabilization fund—its size, timing, and which stocks will catch the flow.
• With ₩10T in play, even spread over 10 stages, it could drive significant price impact. NPS’s ₩1.5T injection in December shows how even smaller flows move the market.
• The FSC plans to focus on KOSPI 200 and broad market ETFs, with new ETFs like the Value-Up Index likely getting more flow—target stocks in both for bigger impact.

• International Gemmological Institute (India) raised around US$500m in its India IPO. 
• IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
• We have looked at the company’s past performance and IPO valuations in our previous notes. In this note, we talk about the trading dynamics.

• Global aviation supply continues to suffer from various supply chain disruptions, driving up lease rates and aircraft values and benefiting aircraft lessors, such as BOC Aviation (BOCA) 
• Although BOCA’s interim results were disappointing due to delayed aircraft deliveries, I expect its momentum to recover in 2025, driven by incoming aircraft and lower interest costs. 
• Stock is trading at 0.9x PB, nearing its historical trough of 0.8x, and offering a decent 5% dividend yield.

• UBTech Robotics (9880 HK) was listed in Hong Kong on 29th Dec 2023 after it raised US$130m. Its one-year lockup will expire on 28th Dec 2024.
• UBTech Robotics is engaged in artificial intelligence (AI)-empowered robotics in China, dedicated to the innovation of humanoid robots and development and sales of smart service robotic solutions.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Berli Jucker (BJC TB) has started to see better performance from Big C SSSG from 3Q2024, with strong performance in October and November, with an expected strong finish to FY2024. 
• The company continues to focus on expanding its fresh food offering, introducing more private labels into its modern retail segment, and using AI to improve logistics performance. 
• Berli Jucker‘s packaging business is benefitting from raw material lower input costs coupled with active hedging as well as a switch to Aluminium cans from PET. Valuations remain attractive. 

• Aker Carbon Capture (ACC) trades at a 21% discount to net cash, with a market cap of NOK 3.6bn versus NOK 4.6bn cash.
• Aker Horizons, ACC’s parent, faces liquidity challenges with NOK 6.1bn debt due by early 2026 and limited cash reserves.
• ACC’s potential capital return announcement could narrow the discount to NAV, with risks of minority shareholder dilution.

• FY24 OP WAS REVISED DOWN GIVEN SURGING VARIOUS COSTS.
• NO CHANGE IN MEDIUM-TERM PLAN TARGETS.
• IINO revised its FY24 guidance from OP of ¥19,200mil (+0.7% YoY) on sales of ¥145,000mil (+5.1% YoY) to OP of ¥17,400mil (-8.7% YoY) on sales of ¥146,000mil (+5.8%YoY).

• MLKN bettered our expectations for revenue (+$15 million versus our estimate) and adjusted EPS (+$0.03 versus our estimate) even as industry conditions remained challenged.
• Gross margin, down 33 bps to 38.8%, was affected by product mix, while the 81-bp decline in operating margin to 7.1% was due to higher variable and compensation expenses andthe need to ‘preload’ marketing expense in Global Retail even as the calendar split the critical holiday/cyber promotional period between 2Q and 3Q.

• Americas Contract and Global Retail posted solid quarters amid industry headwinds, while International Contract demand (typically more variable) was down.

• RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s recent announcements that it has ordered its third EIGA and that it has secured Aerospace Quality Management System AS9100D accreditation for the Tennessee facility for the manufacturing and testing of metal powder and PM-HIP production, both important milestones on the path to commercialisation.
• We have already incorporated the company’s capex guidance in our forecasts so do not anticipate any change to our estimates from these announcements.
• Our base-case DCF valuation is $1.16/share, fully diluted, which represents potential capital upside of 346%.

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
• Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• With the Fed shock pushing the won past 1,450 and the KOSPI down, it’s time to dig into the stabilization fund—its size, timing, and which stocks will catch the flow.
• With ₩10T in play, even spread over 10 stages, it could drive significant price impact. NPS’s ₩1.5T injection in December shows how even smaller flows move the market.
• The FSC plans to focus on KOSPI 200 and broad market ETFs, with new ETFs like the Value-Up Index likely getting more flow—target stocks in both for bigger impact.

• International Gemmological Institute (India) raised around US$500m in its India IPO. 
• IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
• We have looked at the company’s past performance and IPO valuations in our previous notes. In this note, we talk about the trading dynamics.

• Global aviation supply continues to suffer from various supply chain disruptions, driving up lease rates and aircraft values and benefiting aircraft lessors, such as BOC Aviation (BOCA) 
• Although BOCA’s interim results were disappointing due to delayed aircraft deliveries, I expect its momentum to recover in 2025, driven by incoming aircraft and lower interest costs. 
• Stock is trading at 0.9x PB, nearing its historical trough of 0.8x, and offering a decent 5% dividend yield.

• UBTech Robotics (9880 HK) was listed in Hong Kong on 29th Dec 2023 after it raised US$130m. Its one-year lockup will expire on 28th Dec 2024.
• UBTech Robotics is engaged in artificial intelligence (AI)-empowered robotics in China, dedicated to the innovation of humanoid robots and development and sales of smart service robotic solutions.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Berli Jucker (BJC TB) has started to see better performance from Big C SSSG from 3Q2024, with strong performance in October and November, with an expected strong finish to FY2024. 
• The company continues to focus on expanding its fresh food offering, introducing more private labels into its modern retail segment, and using AI to improve logistics performance. 
• Berli Jucker‘s packaging business is benefitting from raw material lower input costs coupled with active hedging as well as a switch to Aluminium cans from PET. Valuations remain attractive. 

• Aker Carbon Capture (ACC) trades at a 21% discount to net cash, with a market cap of NOK 3.6bn versus NOK 4.6bn cash.
• Aker Horizons, ACC’s parent, faces liquidity challenges with NOK 6.1bn debt due by early 2026 and limited cash reserves.
• ACC’s potential capital return announcement could narrow the discount to NAV, with risks of minority shareholder dilution.

• FY24 OP WAS REVISED DOWN GIVEN SURGING VARIOUS COSTS.
• NO CHANGE IN MEDIUM-TERM PLAN TARGETS.
• IINO revised its FY24 guidance from OP of ¥19,200mil (+0.7% YoY) on sales of ¥145,000mil (+5.1% YoY) to OP of ¥17,400mil (-8.7% YoY) on sales of ¥146,000mil (+5.8%YoY).

• MLKN bettered our expectations for revenue (+$15 million versus our estimate) and adjusted EPS (+$0.03 versus our estimate) even as industry conditions remained challenged.
• Gross margin, down 33 bps to 38.8%, was affected by product mix, while the 81-bp decline in operating margin to 7.1% was due to higher variable and compensation expenses andthe need to ‘preload’ marketing expense in Global Retail even as the calendar split the critical holiday/cyber promotional period between 2Q and 3Q.

• Americas Contract and Global Retail posted solid quarters amid industry headwinds, while International Contract demand (typically more variable) was down.

• RaaS has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following the company’s recent announcements that it has ordered its third EIGA and that it has secured Aerospace Quality Management System AS9100D accreditation for the Tennessee facility for the manufacturing and testing of metal powder and PM-HIP production, both important milestones on the path to commercialisation.
• We have already incorporated the company’s capex guidance in our forecasts so do not anticipate any change to our estimates from these announcements.
• Our base-case DCF valuation is $1.16/share, fully diluted, which represents potential capital upside of 346%.

• High Energy Batteries is a well established manufacturer of high-tech batteries for the Indian defence requirements. In CY2024, the promoters purchased shares worth INR 43 Mn from open market.
• Company has robust pipeline of new products, including the 330kW Torpedo Propulsion Battery, One-Shot-Battery, Battery for Sonobuoy, Proton Exchange Membrane Fuel Cells, Vanadium-Redox Flow Battery which could drive future earnings.
• The Indian Government’s procurement policy, with its focus on indigenization in defence procurement, promotes the domestic manufacturing sector, creating favorable growth opportunities for the company.

• CAUTIOUS VIEW ON THE EV MARKET CONTINUES BUT THE FIRM COMMITS TO MID-TERM SHAREHOLDERS RETURN POLICY.
• Hirano Tecseed maintained FY24 full-year guidance despite shortfall in FY24 1H operating profit vs the firm’s forecast.

• High Energy Batteries is a well established manufacturer of high-tech batteries for the Indian defence requirements. In CY2024, the promoters purchased shares worth INR 43 Mn from open market.
• Company has robust pipeline of new products, including the 330kW Torpedo Propulsion Battery, One-Shot-Battery, Battery for Sonobuoy, Proton Exchange Membrane Fuel Cells, Vanadium-Redox Flow Battery which could drive future earnings.
• The Indian Government’s procurement policy, with its focus on indigenization in defence procurement, promotes the domestic manufacturing sector, creating favorable growth opportunities for the company.

• CAUTIOUS VIEW ON THE EV MARKET CONTINUES BUT THE FIRM COMMITS TO MID-TERM SHAREHOLDERS RETURN POLICY.
• Hirano Tecseed maintained FY24 full-year guidance despite shortfall in FY24 1H operating profit vs the firm’s forecast.

• In this insight, we review the share price performances of the 18 companies/insights on the Asian Dividend Gems in 2024.
• The 18 stocks in the Asian Dividend Gems published in 2024 are up on average 4.5% from the date of publishing the insight to current price.
• The 18 companies included in the Asian Dividend Gems series this year currently have an average dividend yield of 7.1% and average SmartScore of 4.0 (out of 5.0).

• Astronics Corporation is an aerospace components manufacturer specializing in electrical power systems, seat motion systems, and automated test systems.
• The company presents a low-risk investment opportunity at 6x normalized EBITDA, despite challenges in the commercial aerospace sector.
• With a focus on Aerospace and Test Systems products, Astronics remains an attractive investment option in the aerospace and defense industry.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Approval and Safeguards: The UK government approved EP Group’s £5.3 billion acquisition of IDS, with legally binding commitments to retain Royal Mail’s headquarters, tax residence, and universal service obligations.
• IDS faces declining mail volumes, delivery fines, and the need for operational reforms; EP Group aims to revitalize the company leveraging expertise in energy and logistics sectors.
• A done deal, in my view. The acquisition is expected to close in Q1 2025.

• In this insight, we review the share price performances of the 18 companies/insights on the Asian Dividend Gems in 2024.
• The 18 stocks in the Asian Dividend Gems published in 2024 are up on average 4.5% from the date of publishing the insight to current price.
• The 18 companies included in the Asian Dividend Gems series this year currently have an average dividend yield of 7.1% and average SmartScore of 4.0 (out of 5.0).

• Astronics Corporation is an aerospace components manufacturer specializing in electrical power systems, seat motion systems, and automated test systems.
• The company presents a low-risk investment opportunity at 6x normalized EBITDA, despite challenges in the commercial aerospace sector.
• With a focus on Aerospace and Test Systems products, Astronics remains an attractive investment option in the aerospace and defense industry.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Approval and Safeguards: The UK government approved EP Group’s £5.3 billion acquisition of IDS, with legally binding commitments to retain Royal Mail’s headquarters, tax residence, and universal service obligations.
• IDS faces declining mail volumes, delivery fines, and the need for operational reforms; EP Group aims to revitalize the company leveraging expertise in energy and logistics sectors.
• A done deal, in my view. The acquisition is expected to close in Q1 2025.