Industrials

• There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 28 June.
• All changes are in line with our forecasts, but one stock could be a surprise inclusion for some.
• Passive trackers will need to buy 3.9% of float in I-TAIL, 3.7% of float in Berli Jucker, 1.5% of float in Ngern TidLor and 1% of float in Bangchak Corporation.

• Count (ASX:CUP) is an accounting and wealth business in Australia which is both the 18th largest Accounting firm whilst simultaneously being the 3rd largest AFSL holder in the country after its consolidation of Diverger (ASX:DVR) due to be implemented on the 1st of March 2024.

• As some may gather, our shares in Count have come from the implementation of Diverger transaction, and as a result I will be focusing on the specifics of the combined business and its prospects.

• First, Count’s Accounting division generates the lion’s share of its revenue and earnings, but the same can be said of its invested capital with all the related contract assets and receivables of some $20m at YE FY2023 whereas the net revenue due to advisers is more than what is due to from the client by an estimated $2.4m in the wealth division (negative net working capital).

• Begbies Traynor is one the UK’s largest outfits of insolvency practitioners which are also in the process of growing its non-insolvency service lines such as corporate finance, financial advisory, asset valuations, PP&E transactions, and property consultancy.
• Whilst these service lines differ there is much collusion between them allowing for revenue synergies where appropriate.
• For reference I suggest that readers refer to my older write up which goes into detail about the business.

• HII, known for its expertise in shipbuilding and defense technologies, reported a mixed first quarter for 2024.
• The first quarter was marked by a record revenue of $2.8 billion, illustrating robust demand for HII’s offerings in shipbuilding and a significant growth in their Mission Technologies segment.
• The revenue increase manifested a 4.9% rise compared to the previous year, driven largely by advancements in the aforementioned sectors.

• Toro specializes in the manufacturing and sale of removal products for industries such as golf courses, sports fields, public parks, and agricultural operations
• The company also offers maintenance and repair services to drive recurring revenue from its customer base
• Toro’s products are known for their durability, efficiency, and innovation, helping them maintain a strong market position and grow their customer base, ultimately driving steady profits and shareholder value.

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.

• Armstrong World Industries commenced 2024 with robust first-quarter results, demonstrating sustained growth momentum from the previous year.
• The report indicates a notable increase in key financial metrics, including a 5% rise in net sales and a significant 16% growth in adjusted EBITDA.
• Additionally, an impressive 23% increase in adjusted diluted earnings per share and a 46% surge in adjusted free cash flow highlights efficient financial management.

• U-Haul Holding Company is the parent company of U-Haul International, the world’s largest consumer truck and trailer rental company.
• U-Haul is also the third largest self-storage operator in North America.
• U-Haul benefited in a leveraged manner from the increase in demand for self-moving services during the pandemic.

• ATS Corporation has demonstrated resilience and strategic execution in its latest quarterly and annual financial results, delivering robust performance across its diverse business segments.
• The year witnessed the highest revenues and earnings in the company’s history, underpinned by significant order bookings, particularly in the fourth quarter.
• This growth was further bolstered by strategic acquisitions and a focus on innovation, which has expanded ATS’s proprietary technology and patent portfolio.

• There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 28 June.
• All changes are in line with our forecasts, but one stock could be a surprise inclusion for some.
• Passive trackers will need to buy 3.9% of float in I-TAIL, 3.7% of float in Berli Jucker, 1.5% of float in Ngern TidLor and 1% of float in Bangchak Corporation.

• Count (ASX:CUP) is an accounting and wealth business in Australia which is both the 18th largest Accounting firm whilst simultaneously being the 3rd largest AFSL holder in the country after its consolidation of Diverger (ASX:DVR) due to be implemented on the 1st of March 2024.

• As some may gather, our shares in Count have come from the implementation of Diverger transaction, and as a result I will be focusing on the specifics of the combined business and its prospects.

• First, Count’s Accounting division generates the lion’s share of its revenue and earnings, but the same can be said of its invested capital with all the related contract assets and receivables of some $20m at YE FY2023 whereas the net revenue due to advisers is more than what is due to from the client by an estimated $2.4m in the wealth division (negative net working capital).

• Begbies Traynor is one the UK’s largest outfits of insolvency practitioners which are also in the process of growing its non-insolvency service lines such as corporate finance, financial advisory, asset valuations, PP&E transactions, and property consultancy.
• Whilst these service lines differ there is much collusion between them allowing for revenue synergies where appropriate.
• For reference I suggest that readers refer to my older write up which goes into detail about the business.

• HII, known for its expertise in shipbuilding and defense technologies, reported a mixed first quarter for 2024.
• The first quarter was marked by a record revenue of $2.8 billion, illustrating robust demand for HII’s offerings in shipbuilding and a significant growth in their Mission Technologies segment.
• The revenue increase manifested a 4.9% rise compared to the previous year, driven largely by advancements in the aforementioned sectors.

• Toro specializes in the manufacturing and sale of removal products for industries such as golf courses, sports fields, public parks, and agricultural operations
• The company also offers maintenance and repair services to drive recurring revenue from its customer base
• Toro’s products are known for their durability, efficiency, and innovation, helping them maintain a strong market position and grow their customer base, ultimately driving steady profits and shareholder value.

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.

• Armstrong World Industries commenced 2024 with robust first-quarter results, demonstrating sustained growth momentum from the previous year.
• The report indicates a notable increase in key financial metrics, including a 5% rise in net sales and a significant 16% growth in adjusted EBITDA.
• Additionally, an impressive 23% increase in adjusted diluted earnings per share and a 46% surge in adjusted free cash flow highlights efficient financial management.

• U-Haul Holding Company is the parent company of U-Haul International, the world’s largest consumer truck and trailer rental company.
• U-Haul is also the third largest self-storage operator in North America.
• U-Haul benefited in a leveraged manner from the increase in demand for self-moving services during the pandemic.

• ATS Corporation has demonstrated resilience and strategic execution in its latest quarterly and annual financial results, delivering robust performance across its diverse business segments.
• The year witnessed the highest revenues and earnings in the company’s history, underpinned by significant order bookings, particularly in the fourth quarter.
• This growth was further bolstered by strategic acquisitions and a focus on innovation, which has expanded ATS’s proprietary technology and patent portfolio.

• Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.
• Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.
• Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.

• China Railway Signal & Communication (3969 HK)‘s latest order backlog is estimated to be Rmb173.7bn, enough to cover FY24F revenue by 4.4x.
• Gross margin has sustained expansion, reaching a record high of 27.8% in 1Q24. Higher R&D expenses will benefit its medium-term earnings.
• Net cash equals 59% of the share price, allowing it to maintain over 50% payout and potentially higher going forward. Operating cash flow has also turned around to positive.

• We conducted a Q&A with Kinik, who is a key supplier to companies including TSMC, UMC, and Micron.
• Kinik is dramatically expanding its diamond disk capacity; these products are critical to the production of wafers for advanced semiconductor nodes.
• We believe Kinik has high visibility into future industry demand. Gross margins are likely to expand in the coming years as advanced diamond products become increasingly important to wafer production.

• Senior Presidential Secretary said this morning that a tax reform, including reducing inheritance tax rates to the OECD average, will be disclosed in late July with the tax reform plan.
• Stocks sensitive to reduced inheritance tax, notably Hyundai Motor Group subsidiaries like Hyundai Glovis and Hyundai Motor, could see significant attention amid governance restructuring efforts under Chung Eui-sun.
• Retroactive application and its extent may impact markets, potentially affecting groups like Samsung, influencing diverse investment strategies based on specifics.

• China Railway Signal & Communication (3969 HK)‘s latest order backlog is estimated to be Rmb173.7bn, enough to cover FY24F revenue by 4.4x.
• Gross margin has sustained expansion, reaching a record high of 27.8% in 1Q24. Higher R&D expenses will benefit its medium-term earnings.
• Net cash equals 59% of the share price, allowing it to maintain over 50% payout and potentially higher going forward. Operating cash flow has also turned around to positive.

• We conducted a Q&A with Kinik, who is a key supplier to companies including TSMC, UMC, and Micron.
• Kinik is dramatically expanding its diamond disk capacity; these products are critical to the production of wafers for advanced semiconductor nodes.
• We believe Kinik has high visibility into future industry demand. Gross margins are likely to expand in the coming years as advanced diamond products become increasingly important to wafer production.

• The Palliser/Keisei Electric Railway Co (9009 JP) is an unconvincing trade. Avoid being long Keisei vs Oriental Land (4661 JP) except in short-term impact events. Avoid the drift trade also.
• On the subject of activism, keep an eye on China Merchants China Direct Investments (133 HK)‘s 20th June AGM. If Kan’s re-election is rejected, this stock should gain more momentum.
• A Sigma Healthcare (SIG AU)/Chemist Warehouse merger carried regulatory risk. And now the ACCC has raised a raft of concerns. 

• Donaldson Company’s third quarter fiscal 2024 results illuminate a company adeptly navigating its competitive landscape and growth avenues, albeit with nuances across different segments and geographies that invite a more tempered enthusiasm.
• The reported 6% increase in total sales to a record $928 million and a 22% increase in EPS to a record $0.92, alongside an operating margin at a more than decade-high, succinctly encapsulate the firm’s short-term operational success.
• In Mobile Solutions, notable volume growth driven by the aftermarket business has surpassed pricing gains, which points to robust market performance and potentially sustainable revenue streams from recurrent business.

• The Palliser/Keisei Electric Railway Co (9009 JP) is an unconvincing trade. Avoid being long Keisei vs Oriental Land (4661 JP) except in short-term impact events. Avoid the drift trade also.
• On the subject of activism, keep an eye on China Merchants China Direct Investments (133 HK)‘s 20th June AGM. If Kan’s re-election is rejected, this stock should gain more momentum.
• A Sigma Healthcare (SIG AU)/Chemist Warehouse merger carried regulatory risk. And now the ACCC has raised a raft of concerns. 

• Donaldson Company’s third quarter fiscal 2024 results illuminate a company adeptly navigating its competitive landscape and growth avenues, albeit with nuances across different segments and geographies that invite a more tempered enthusiasm.
• The reported 6% increase in total sales to a record $928 million and a 22% increase in EPS to a record $0.92, alongside an operating margin at a more than decade-high, succinctly encapsulate the firm’s short-term operational success.
• In Mobile Solutions, notable volume growth driven by the aftermarket business has surpassed pricing gains, which points to robust market performance and potentially sustainable revenue streams from recurrent business.

• Today at noon JST, Rs Technologies (3445 JP) released an announcement on TDNet, “Our policy regarding the tender offer for Helios Techno Holding Co., Ltd. shares”
• In it, they indicated that the price offered – ¥825/share – is a price which “fully returns to general shareholders the increased enterprise value that will result from [transaction] synergies.”
• They acknowledge the market price is trading higher than the TOB Price, but say they have no plans to raise the Tender Offer Price. So now what? It depends.

• The contract termination was driven primarily by costs, according to the WSJ.
• Unlike most CXW ICE contracts, the center has been operated under a costlier model because it was initially opened in 2014 to house families, then was transitioned in 2021 to detention primarily of individual adults.
• Despite the expected short-term challenge of the contract termination, longer term we expect rising demand from ICE under the traditional detention model.

Norcros’s FY24 results highlight its resilience in the face of tough markets, but we continue to believe that the outlook is improving in both of its core markets, the UK and South Africa. Despite the improving outlook we have maintained our revenue and profit forecasts and 251p/share valuation post the results, with the company trading on an undemanding P/E rating of 6.6x. However, it is worth highlighting the scale of the opportunity on offer to Norcros, which was illustrated at the recent capital markets day.

• Regional airlines like SkyWest were established to operate connecting routes under contracts with major airlines
• SkyWest’s efficient operations and strong relationships with major carriers have made it a dominant player in the regional airline market
• The company’s financial success and potential for future growth indicate a positive outlook for the coming years

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.

• Today at noon JST, Rs Technologies (3445 JP) released an announcement on TDNet, “Our policy regarding the tender offer for Helios Techno Holding Co., Ltd. shares”
• In it, they indicated that the price offered – ¥825/share – is a price which “fully returns to general shareholders the increased enterprise value that will result from [transaction] synergies.”
• They acknowledge the market price is trading higher than the TOB Price, but say they have no plans to raise the Tender Offer Price. So now what? It depends.

• The contract termination was driven primarily by costs, according to the WSJ.
• Unlike most CXW ICE contracts, the center has been operated under a costlier model because it was initially opened in 2014 to house families, then was transitioned in 2021 to detention primarily of individual adults.
• Despite the expected short-term challenge of the contract termination, longer term we expect rising demand from ICE under the traditional detention model.

Norcros’s FY24 results highlight its resilience in the face of tough markets, but we continue to believe that the outlook is improving in both of its core markets, the UK and South Africa. Despite the improving outlook we have maintained our revenue and profit forecasts and 251p/share valuation post the results, with the company trading on an undemanding P/E rating of 6.6x. However, it is worth highlighting the scale of the opportunity on offer to Norcros, which was illustrated at the recent capital markets day.

• Regional airlines like SkyWest were established to operate connecting routes under contracts with major airlines
• SkyWest’s efficient operations and strong relationships with major carriers have made it a dominant player in the regional airline market
• The company’s financial success and potential for future growth indicate a positive outlook for the coming years

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.

• Its unclear whether Yemen-based Houthis would end attacks after ceasefire
• We’ve entered peak Summer shipping season from Asia to US, Europe
• Higher spot rates have already lifted contract rates in Q2 2024

• FY03/24 sales reached JPY231.5bn (+0.6% YoY), operating profit JPY15.5bn (+4.0% YoY), and net income JPY8.5bn (+31.2% YoY).
• Segment sales: Energy JPY101.0bn (-1.5% YoY), Information and Communications JPY56.7bn (+5.0% YoY), CATV JPY35.8bn (+3.7% YoY).
• FY03/25 forecast: sales JPY244.0bn (+5.4% YoY), operating profit JPY16.0bn (+3.2% YoY), net income JPY9.0bn (+6.1% YoY).

• FY03/24: Sales JPY231.5bn (+0.6% YoY), operating profit JPY15.5bn (+4.0% YoY), net income JPY8.5bn (+31.2% YoY).
• FY03/25 forecast: Sales JPY244.0bn (+5.4% YoY), operating profit JPY16.0bn (+3.2% YoY), net income JPY9.0bn (+6.1% YoY).
• Segment results: Energy sales JPY101.0bn (-1.5% YoY), Information and Communications sales JPY56.7bn (+5.0% YoY), Construction sales JPY25.0bn (-6.6% YoY).

• Sales grew 6.9% YoY to JPY324.8bn, exceeding the FY02/24 forecast, driven by existing and new customer contracts.
• Operating profit fell 3.7% YoY to JPY15.2bn due to increased SG&A expenses despite segment profit growth.
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) valued at JPY3.1bn.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Full-year FY02/24 forecast: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and net income JPY10.4bn (-2.9% YoY).
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) with a total acquisition value of JPY3.1bn.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales grew YoY in all segments, notably in Construction Work and Materials and Supplies Sourcing Services, despite rising SG&A expenses.
• Full-year forecast for FY02/24: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and annual dividends JPY87 per share.

• Sales increased 6.9% YoY to JPY324.8bn, driven by growth in existing customer wallets and new contracts.
• Operating profit fell 3.7% YoY to JPY15.2bn, impacted by higher SG&A expenses despite segment profit growth.
• Net income attributable to owners of the parent rose 5.5% YoY to JPY10.7bn, exceeding the full-year forecast.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales grew YoY in all seven segments, with notable growth in Construction Work and Materials and Supplies Sourcing Services.
• Full-year forecast for FY02/24: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and annual dividends per share JPY87.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales and operating profit grew YoY in all segments, with notable increases in Construction Work and Materials and Supplies Sourcing Services.
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) with a total acquisition value of JPY3.1bn.

• Sales: JPY324.8bn (+6.9% YoY), Operating profit: JPY15.2bn (-3.7% YoY), Recurring profit: JPY15.5bn (-3.3% YoY), Net income: JPY10.7bn (+5.5% YoY).
• Sales growth driven by existing customer wallet share and new contracts; notable growth in Construction Work and Materials and Supplies Sourcing Services.
• Full-year forecast: Sales JPY340.0bn (+4.7% YoY), Operating profit JPY16.0bn (+5.0% YoY), Recurring profit JPY16.0bn (+3.3% YoY), Net income JPY10.4bn (-2.9% YoY).

• Its unclear whether Yemen-based Houthis would end attacks after ceasefire
• We’ve entered peak Summer shipping season from Asia to US, Europe
• Higher spot rates have already lifted contract rates in Q2 2024

• FY03/24 sales reached JPY231.5bn (+0.6% YoY), operating profit JPY15.5bn (+4.0% YoY), and net income JPY8.5bn (+31.2% YoY).
• Segment sales: Energy JPY101.0bn (-1.5% YoY), Information and Communications JPY56.7bn (+5.0% YoY), CATV JPY35.8bn (+3.7% YoY).
• FY03/25 forecast: sales JPY244.0bn (+5.4% YoY), operating profit JPY16.0bn (+3.2% YoY), net income JPY9.0bn (+6.1% YoY).

• FY03/24: Sales JPY231.5bn (+0.6% YoY), operating profit JPY15.5bn (+4.0% YoY), net income JPY8.5bn (+31.2% YoY).
• FY03/25 forecast: Sales JPY244.0bn (+5.4% YoY), operating profit JPY16.0bn (+3.2% YoY), net income JPY9.0bn (+6.1% YoY).
• Segment results: Energy sales JPY101.0bn (-1.5% YoY), Information and Communications sales JPY56.7bn (+5.0% YoY), Construction sales JPY25.0bn (-6.6% YoY).

• Sales grew 6.9% YoY to JPY324.8bn, exceeding the FY02/24 forecast, driven by existing and new customer contracts.
• Operating profit fell 3.7% YoY to JPY15.2bn due to increased SG&A expenses despite segment profit growth.
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) valued at JPY3.1bn.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Full-year FY02/24 forecast: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and net income JPY10.4bn (-2.9% YoY).
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) with a total acquisition value of JPY3.1bn.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales grew YoY in all segments, notably in Construction Work and Materials and Supplies Sourcing Services, despite rising SG&A expenses.
• Full-year forecast for FY02/24: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and annual dividends JPY87 per share.

• Sales increased 6.9% YoY to JPY324.8bn, driven by growth in existing customer wallets and new contracts.
• Operating profit fell 3.7% YoY to JPY15.2bn, impacted by higher SG&A expenses despite segment profit growth.
• Net income attributable to owners of the parent rose 5.5% YoY to JPY10.7bn, exceeding the full-year forecast.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales grew YoY in all seven segments, with notable growth in Construction Work and Materials and Supplies Sourcing Services.
• Full-year forecast for FY02/24: Sales JPY340.0bn (+4.7% YoY), operating profit JPY16.0bn (+5.0% YoY), and annual dividends per share JPY87.

• Sales for FY02/23 were JPY324.8bn (+6.9% YoY), operating profit JPY15.2bn (-3.7% YoY), and net income JPY10.7bn (+5.5% YoY).
• Sales and operating profit grew YoY in all segments, with notable increases in Construction Work and Materials and Supplies Sourcing Services.
• The company plans to acquire 700,000 treasury shares (1.44% of total issued shares) with a total acquisition value of JPY3.1bn.

• Sales: JPY324.8bn (+6.9% YoY), Operating profit: JPY15.2bn (-3.7% YoY), Recurring profit: JPY15.5bn (-3.3% YoY), Net income: JPY10.7bn (+5.5% YoY).
• Sales growth driven by existing customer wallet share and new contracts; notable growth in Construction Work and Materials and Supplies Sourcing Services.
• Full-year forecast: Sales JPY340.0bn (+4.7% YoY), Operating profit JPY16.0bn (+5.0% YoY), Recurring profit JPY16.0bn (+3.3% YoY), Net income JPY10.4bn (-2.9% YoY).