Category

Industrials

Dec 10
0

Daily Brief Industrials: VinFast and more

By | Daily Briefs, Industrials

In today’s briefing:

  • VinFast IPO Preview – Too Big to Fail In Vietnam

VinFast IPO Preview – Too Big to Fail In Vietnam

By Douglas Kim

  • VinFast Auto (“VinFast”) is getting ready to complete its IPO on Nasdaq in January 2023.
  • We are cautious on the IPO of VinFast. Timing is awful and investors have slashed share prices of the company’s comps in the past year. 
  • The fact that the company is trying to hurry up to complete this IPO in early 2023 suggests that there could be some bigger concerns about long-term financing of VinFast.

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Dec 10
0

Daily Brief Industrials: VinFast and more

By | Daily Briefs, Industrials

In today’s briefing:

  • VinFast IPO Preview – Too Big to Fail In Vietnam

VinFast IPO Preview – Too Big to Fail In Vietnam

By Douglas Kim

  • VinFast Auto (“VinFast”) is getting ready to complete its IPO on Nasdaq in January 2023.
  • We are cautious on the IPO of VinFast. Timing is awful and investors have slashed share prices of the company’s comps in the past year. 
  • The fact that the company is trying to hurry up to complete this IPO in early 2023 suggests that there could be some bigger concerns about long-term financing of VinFast.

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Dec 09
0

Daily Brief Industrials: Builders Firstsource, Osome and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.
  • Osome Rakes in US$25M Series B to Grow Its Accounting Solutions Beyond SG

Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.

By Eric Fernandez, CFA

  • This model seeks companies that are potentially “overearning”, defined as companies with unusually high margins relative to their own history or relative to the industry. 
  • The reasons for the margin increases are sometimes unsustainable or fraudulent. The  critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and/or the stock’s valuation. 
  • These shorts tend to have moderate to higher betas, higher valuations due to recent strong results and good short responses to subsequently disappointing earnings.

Osome Rakes in US$25M Series B to Grow Its Accounting Solutions Beyond SG

By e27

  • Osome helps SMEs set up through a simple platform with easy-to-use software and an expert accountant to take care of financial admin

  • Singapore-based Osome, which has developed an accounting and corporate compliance app for small and medium enterprises (SMEs), has raked in US$25 million in a Series B round
  • The firm plans to expand its Asia operations, primarily in Singapore and Hong Kong

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Dec 09
0

Daily Brief Industrials: Builders Firstsource, Osome and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.
  • Osome Rakes in US$25M Series B to Grow Its Accounting Solutions Beyond SG

Overearning Short Candidates: Builders FirstSource, IBM, Forward Air Co, Deere & Co.

By Eric Fernandez, CFA

  • This model seeks companies that are potentially “overearning”, defined as companies with unusually high margins relative to their own history or relative to the industry. 
  • The reasons for the margin increases are sometimes unsustainable or fraudulent. The  critical judgement involves to what extent unsustainable margins are embedded in a company’s forecasts and/or the stock’s valuation. 
  • These shorts tend to have moderate to higher betas, higher valuations due to recent strong results and good short responses to subsequently disappointing earnings.

Osome Rakes in US$25M Series B to Grow Its Accounting Solutions Beyond SG

By e27

  • Osome helps SMEs set up through a simple platform with easy-to-use software and an expert accountant to take care of financial admin

  • Singapore-based Osome, which has developed an accounting and corporate compliance app for small and medium enterprises (SMEs), has raked in US$25 million in a Series B round
  • The firm plans to expand its Asia operations, primarily in Singapore and Hong Kong

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Dec 08
0

Daily Brief Industrials: JD Logistics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

By Ming Lu

  • The growth rate of total revenue accelerated in the third quarter of 2022.
  • We believe the organic growth was also strong besides the acquisition of Deppon.
  • We set an upside of 29% and a price target of HK$19.90.

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Dec 08
0

Daily Brief Industrials: JD Logistics and more

By | Daily Briefs, Industrials

In today’s briefing:

  • JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

JD Logistics (2618 HK): 3Q22 High Growth, Not Just Acquired But Organic, 29% Upside

By Ming Lu

  • The growth rate of total revenue accelerated in the third quarter of 2022.
  • We believe the organic growth was also strong besides the acquisition of Deppon.
  • We set an upside of 29% and a price target of HK$19.90.

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Dec 07
0

Daily Brief Industrials: DMCI Holdings, Sunpower Group, Toshiba Corp, Beijing-Shanghai High Speed Railway-A, Deere & Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
  • Sunpower: 2023 China Re-Opening Stock, but CB Conversion Uncertainty Needs To Be Resolved
  • Toshiba (6502 JP): JIP’s Privatisation Bid Is Floundering
  • FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change
  • Deere & Co: New Product Launches & Other Drivers

PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes

By Brian Freitas

Sunpower: 2023 China Re-Opening Stock, but CB Conversion Uncertainty Needs To Be Resolved

By Nicolas Van Broekhoven

  • Sunpower has had a rough +/-18 months as input cost rises coincided with Force Majeure issues at some of its clients due to never-ending rolling Chinese lockdowns.
  • Mr. Market has pushed Sunpower back below 0.27 SGD/share (-43% YTD) despite revenue- and EBITDA growth continuing at its GI division. Profits have been compressed due to rising input costs.
  • As China re-opens in FY23 Sunpower should benefit from normalization and recovery in demand from its industrial base customers. However, CB conversion details are needed for re-rating to start.

Toshiba (6502 JP): JIP’s Privatisation Bid Is Floundering

By Arun George

  • JIP, Toshiba Corp (6502 JP)‘s preferred bidder, is reported to be under pressure from co-investors to cut its offer price. Securing financing continues to be troublesome.  
  • An offer valuing Toshiba less than JPY2.2 trillion would face pushback from the special committee, let alone shareholders. There are no signs of a JIC/Bain coming to the rescue. 
  • While the Toshiba/peers price ratio remains undemanding compared to historical ratios, Toshiba looks expensive vs peers on multiples. With short-term newsflow likely to be incrementally negative, remain on the sidelines.

FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change

By Brian Freitas

Deere & Co: New Product Launches & Other Drivers

By Baptista Research

  • Deere had a challenging start to the new fiscal as a result of a work stoppage at some of its biggest U.S. plants, but managed to resolve the situation with the help of a new contract.
  • The company delivered another all-around beat and the performance across its segments was fueled by persistently high demand and increased production rates.
  • Furthermore, they launched several large wheel loaders, including 744 P-tier, 824 P-tier, 844 P-tier, and brand-new 904 P-tier.

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Dec 07
0

Daily Brief Industrials: DMCI Holdings, Sunpower Group, Toshiba Corp, Beijing-Shanghai High Speed Railway-A, Deere & Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes
  • Sunpower: 2023 China Re-Opening Stock, but CB Conversion Uncertainty Needs To Be Resolved
  • Toshiba (6502 JP): JIP’s Privatisation Bid Is Floundering
  • FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change
  • Deere & Co: New Product Launches & Other Drivers

PCOMP Index Rebalance Preview Feb 23: Higher Free Float Means Fewer Changes

By Brian Freitas

Sunpower: 2023 China Re-Opening Stock, but CB Conversion Uncertainty Needs To Be Resolved

By Nicolas Van Broekhoven

  • Sunpower has had a rough +/-18 months as input cost rises coincided with Force Majeure issues at some of its clients due to never-ending rolling Chinese lockdowns.
  • Mr. Market has pushed Sunpower back below 0.27 SGD/share (-43% YTD) despite revenue- and EBITDA growth continuing at its GI division. Profits have been compressed due to rising input costs.
  • As China re-opens in FY23 Sunpower should benefit from normalization and recovery in demand from its industrial base customers. However, CB conversion details are needed for re-rating to start.

Toshiba (6502 JP): JIP’s Privatisation Bid Is Floundering

By Arun George

  • JIP, Toshiba Corp (6502 JP)‘s preferred bidder, is reported to be under pressure from co-investors to cut its offer price. Securing financing continues to be troublesome.  
  • An offer valuing Toshiba less than JPY2.2 trillion would face pushback from the special committee, let alone shareholders. There are no signs of a JIC/Bain coming to the rescue. 
  • While the Toshiba/peers price ratio remains undemanding compared to historical ratios, Toshiba looks expensive vs peers on multiples. With short-term newsflow likely to be incrementally negative, remain on the sidelines.

FTSE China A50 Index Rebalance: Stock Connect Deletion to Drive Change

By Brian Freitas

Deere & Co: New Product Launches & Other Drivers

By Baptista Research

  • Deere had a challenging start to the new fiscal as a result of a work stoppage at some of its biggest U.S. plants, but managed to resolve the situation with the help of a new contract.
  • The company delivered another all-around beat and the performance across its segments was fueled by persistently high demand and increased production rates.
  • Furthermore, they launched several large wheel loaders, including 744 P-tier, 824 P-tier, 844 P-tier, and brand-new 904 P-tier.

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Dec 06
0

Daily Brief Industrials: Aneka Gas, Daifuku Co Ltd, CEL Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Aneka Gas (AGII IJ) – Out of Thin Air
  • Daifuku (6383) | Attractive Valuation Drivers Despite near Term Risks
  • A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

Aneka Gas (AGII IJ) – Out of Thin Air

By Angus Mackintosh

  • Aneka Gas is an interesting concept in that its product literally comes out of thin air given its position as Indonesia’s leading Industrial gas player with a 45% market share.
  • The company provides investors with wide-ranging exposure to the Indonesian economy from industry to infrastructure, consumer goods, healthcare, and SME amongst others, which also reduces risk through diversity.
  • Aneka Gas 9M2022 numbers reflected a change in revenue mix and demand for medical gas reduces post-COVID and other areas such as industry, retail, and infrastructure started to recover.

Daifuku (6383) | Attractive Valuation Drivers Despite near Term Risks

By Mark Chadwick

  • Daifuku is a growth stock that has fallen by 26% YTD reflecting near term risks to growth and margins
  • We believe that Daifuku is a major beneficiary of continued investment in automation, especially in e-commerce and logistics
  • We analyse Daifuku’s core valuation drivers and see around 16% upside for the stock

A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

By Generals and Workouts

  • The cash comes from a one-off asset sale. CEL hasn’t been building cash on the balance sheet for years. While management has no intention of paying out the cash at present, they plan to use it for acquisitions. It won’t stay on the balance sheet for ever.

  • CEL’s operating business is not a great business, but it’s not terrible either. CEL earned an average of 15% pretax on capital employed over the last three years (FY20-FY22). The operating business earns above its cost of capital, is consistently profitable and ~40% of earnings are paid out as dividends.

  • Management has a lot of skin in the game. CEL’s founder and president, Masatsugu Shinno, owns 60% of the company, which aligns his interests with shareholders.

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Dec 06
0

Daily Brief Industrials: Aneka Gas, Daifuku Co Ltd, CEL Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Aneka Gas (AGII IJ) – Out of Thin Air
  • Daifuku (6383) | Attractive Valuation Drivers Despite near Term Risks
  • A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

Aneka Gas (AGII IJ) – Out of Thin Air

By Angus Mackintosh

  • Aneka Gas is an interesting concept in that its product literally comes out of thin air given its position as Indonesia’s leading Industrial gas player with a 45% market share.
  • The company provides investors with wide-ranging exposure to the Indonesian economy from industry to infrastructure, consumer goods, healthcare, and SME amongst others, which also reduces risk through diversity.
  • Aneka Gas 9M2022 numbers reflected a change in revenue mix and demand for medical gas reduces post-COVID and other areas such as industry, retail, and infrastructure started to recover.

Daifuku (6383) | Attractive Valuation Drivers Despite near Term Risks

By Mark Chadwick

  • Daifuku is a growth stock that has fallen by 26% YTD reflecting near term risks to growth and margins
  • We believe that Daifuku is a major beneficiary of continued investment in automation, especially in e-commerce and logistics
  • We analyse Daifuku’s core valuation drivers and see around 16% upside for the stock

A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

By Generals and Workouts

  • The cash comes from a one-off asset sale. CEL hasn’t been building cash on the balance sheet for years. While management has no intention of paying out the cash at present, they plan to use it for acquisitions. It won’t stay on the balance sheet for ever.

  • CEL’s operating business is not a great business, but it’s not terrible either. CEL earned an average of 15% pretax on capital employed over the last three years (FY20-FY22). The operating business earns above its cost of capital, is consistently profitable and ~40% of earnings are paid out as dividends.

  • Management has a lot of skin in the game. CEL’s founder and president, Masatsugu Shinno, owns 60% of the company, which aligns his interests with shareholders.

💡 Before it’s here, it’s on Smartkarma

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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