Category

Industrials

Aug 05
0

Daily Brief Industrials: Bunka Shutter, General Electric Co and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Bunka Shutter (5930 JP) – Big Buyback Vs Big CB Means No Accretion, Minimal Flow Impact
  • General Electric Company: New Product Lines

Bunka Shutter (5930 JP) – Big Buyback Vs Big CB Means No Accretion, Minimal Flow Impact

By Travis Lundy

  • Today Bunka Shutter (5930 JP) reported iffy, if predictably seasonal Q1 earnings, and FY22 forecasts. They also announced a big buyback which caused the stock to pop, then come back.
  • It came back because the stock has a decently large slightly in-the-money CB with 13 months to maturity. A big pop will get a big re-hedge.
  • Over the next year, despite the large buyback, EPS accretion and net buyback flow impact should be minimal. And the stock isn’t as cheap as it “looks.”

General Electric Company: New Product Lines

By Ishan Majumdar

  • General Electric has started seeing a solid recovery in its aerospeace business which has become an important growth driver for the company.
  • Macro pressures and supply chain have affected the revenue adversely by approximately 5%.
  • The company has recently unveiled the innovative branding of its new companies, GE Vernova, GE Healthcare, and GE Aerospace.

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

Sign Up for Free

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
Sign Up for Free
Aug 03
0

Daily Brief Industrials: GS Engineering & Construction, China Communications Construction, Kubota Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • KOSPI Size Index Series Rebalancing in September: Eight Strong Targets
  • China Comm Const (1800 HK): Accelerating New Contract Wins
  • Kubota (6326) | Small Tractors…big Problem

KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

By Sanghyun Park

  • Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering & Construction newly made the list.
  • Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.
  • The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.

China Comm Const (1800 HK): Accelerating New Contract Wins

By Osbert Tang, CFA

  • China Communications Construction (1800 HK) sealed Rmb371bn of new contract in 2Q22, or a 35.2% YoY growth, representing a sharp acceleration from just 4.9% in 1Q22. 
  • We estimate backlog is now around Rmb3.5trn and this equals to 5.2x FY21 revenue. This should have improved from 4.6x at end-FY21 and provides CCCC a secured pipeline.
  • CCCC is well positioned to gain more contracts in 2H22 as driven by the local government special purpose bonds issue. Such issue reached Rmb1.5trn, or a 166.1% growth, in Jun.

Kubota (6326) | Small Tractors…big Problem

By Mark Chadwick

  • Kubota was a key beneficiary of stay-at-home demand in the US over the past two years 
  • The pull-forward in demand is now normalising, while the macro environment has also turned more difficult  
  • We think Kubota will miss full year analyst numbers and expect the stock to trade lower to 1.2x book 

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

Sign Up for Free

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
Sign Up for Free
Aug 03
0

Daily Brief Industrials: GS Engineering & Construction, China Communications Construction, Kubota Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • KOSPI Size Index Series Rebalancing in September: Eight Strong Targets
  • China Comm Const (1800 HK): Accelerating New Contract Wins
  • Kubota (6326) | Small Tractors…big Problem

KOSPI Size Index Series Rebalancing in September: Eight Strong Targets

By Sanghyun Park

  • Eight stocks are highly likely to migrate with a substantial passive flow. Compared to the early phase of the screening period, GS Engineering & Construction newly made the list.
  • Most names should show a quite substantial passive flow (x ADTV). In particular, KCC Corp and BGF Retail deserve our special attention for their expected passive impact.
  • The flow occurs on high potential migration stocks about 20 days before the effective date. So I would start building Long/Short Basket positions with the above eight names around mid-August.

China Comm Const (1800 HK): Accelerating New Contract Wins

By Osbert Tang, CFA

  • China Communications Construction (1800 HK) sealed Rmb371bn of new contract in 2Q22, or a 35.2% YoY growth, representing a sharp acceleration from just 4.9% in 1Q22. 
  • We estimate backlog is now around Rmb3.5trn and this equals to 5.2x FY21 revenue. This should have improved from 4.6x at end-FY21 and provides CCCC a secured pipeline.
  • CCCC is well positioned to gain more contracts in 2H22 as driven by the local government special purpose bonds issue. Such issue reached Rmb1.5trn, or a 166.1% growth, in Jun.

Kubota (6326) | Small Tractors…big Problem

By Mark Chadwick

  • Kubota was a key beneficiary of stay-at-home demand in the US over the past two years 
  • The pull-forward in demand is now normalising, while the macro environment has also turned more difficult  
  • We think Kubota will miss full year analyst numbers and expect the stock to trade lower to 1.2x book 

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

Sign Up for Free

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
Sign Up for Free
Aug 02
0

Daily Brief Industrials: Daikin Industries, United Parcel Service Cl B and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Daikin (6367) | Keep Cool and Carry On
  • United Parcel Service Inc.: Expansion In The Indian Market & Other Developments

Daikin (6367) | Keep Cool and Carry On

By Mark Chadwick

  • We turn bullish on Daikin ahead of Q1 results as we become less concerned about growth risks in China and the US
  • Peer results suggest that air conditioner demand is stronger than expected due to record high global temperatures
  • Company management has a good track record of pushing through price hikes and cutting costs. We expect the company to beat guidance this year

United Parcel Service Inc.: Expansion In The Indian Market & Other Developments

By Ishan Majumdar

  • UPS managed to deliver an all-around beat in the past quarter despite the fact that its macro environment remained dynamic.
  • In spite of the decline in volume, UPS continues to win in maximum parts of the market, having strong gains in revenue quality.
  • All segments of the business have delivered growth in the operating profit.

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

Sign Up for Free

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
Sign Up for Free
Aug 02
0

Daily Brief Industrials: Daikin Industries, United Parcel Service Cl B and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Daikin (6367) | Keep Cool and Carry On
  • United Parcel Service Inc.: Expansion In The Indian Market & Other Developments

Daikin (6367) | Keep Cool and Carry On

By Mark Chadwick

  • We turn bullish on Daikin ahead of Q1 results as we become less concerned about growth risks in China and the US
  • Peer results suggest that air conditioner demand is stronger than expected due to record high global temperatures
  • Company management has a good track record of pushing through price hikes and cutting costs. We expect the company to beat guidance this year

United Parcel Service Inc.: Expansion In The Indian Market & Other Developments

By Ishan Majumdar

  • UPS managed to deliver an all-around beat in the past quarter despite the fact that its macro environment remained dynamic.
  • In spite of the decline in volume, UPS continues to win in maximum parts of the market, having strong gains in revenue quality.
  • All segments of the business have delivered growth in the operating profit.

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

Sign Up for Free

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
Sign Up for Free
Aug 01
0

Daily Brief Industrials: ACS, Actividades de Construcción y Servicios and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Untangling ACS Holding Chain

Untangling ACS Holding Chain

By Jesus Rodriguez Aguilar

  • ACS is simplifying  its corporate structure: it has acquired the minorities in CIMIC, increased its stake in Hochtief and is buyer for any shares in Hochtief owned by Atlantia.
  • Thiess is now acquiring MACA and could also be a candidate for acquisition by the parent.
  • I see value in ACS. Further rationalisation in the holding structure would be a catalyst for the reduction of the discount.

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

Sign Up for Free

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
Sign Up for Free
Aug 01
0

Daily Brief Industrials: ACS, Actividades de Construcción y Servicios and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Untangling ACS Holding Chain

Untangling ACS Holding Chain

By Jesus Rodriguez Aguilar

  • ACS is simplifying  its corporate structure: it has acquired the minorities in CIMIC, increased its stake in Hochtief and is buyer for any shares in Hochtief owned by Atlantia.
  • Thiess is now acquiring MACA and could also be a candidate for acquisition by the parent.
  • I see value in ACS. Further rationalisation in the holding structure would be a catalyst for the reduction of the discount.

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

Sign Up for Free

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
Sign Up for Free
Jul 31
0

Daily Brief Industrials: SCREEN Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Screen Holdings (7735 JP): Weakness Not Necessarily Discounted

Screen Holdings (7735 JP): Weakness Not Necessarily Discounted

By Scott Foster

  • Orders, sales and profits increased substantially YoY in the three months to June (1Q), but new SPE orders declined sequentially (QoQ) for the first time in two years.
  • Management has lowered 2Q sales and profit guidance in expectation of a weak 2Q. Full-year guidance remains unchanged. In our view, this reflects a wait-and-see attitude.
  • Major customer Intel has cut capex. TSMC and memory makers see weak quarters ahead. The potential downside risk has probably not been fully discounted.

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

Sign Up for Free

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
Sign Up for Free
Jul 31
0

Daily Brief Industrials: SCREEN Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Screen Holdings (7735 JP): Weakness Not Necessarily Discounted

Screen Holdings (7735 JP): Weakness Not Necessarily Discounted

By Scott Foster

  • Orders, sales and profits increased substantially YoY in the three months to June (1Q), but new SPE orders declined sequentially (QoQ) for the first time in two years.
  • Management has lowered 2Q sales and profit guidance in expectation of a weak 2Q. Full-year guidance remains unchanged. In our view, this reflects a wait-and-see attitude.
  • Major customer Intel has cut capex. TSMC and memory makers see weak quarters ahead. The potential downside risk has probably not been fully discounted.

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

Sign Up for Free

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
Sign Up for Free
Jul 30
0

Daily Brief Industrials: MACA Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • ACS/Thiess/MACA: Generous Premium

ACS/Thiess/MACA: Generous Premium

By Jesus Rodriguez Aguilar

  • Thiess is launching an agreed offer to acquire 100% of MACA Ltd (MLD AU) at AUD 1.025/share, in cash, cum dividend, a 28% premium, 2.8x EV/Fwd EBITDA. Minimum acceptance condition is 90%.
  • Thiess is gaining scale with the acquisition of MACA. I believe that in the future ACS/Hochtief/CIMIC will seek to acquire the whole of Thiess.
  • Gross spread (as of 29 July) is 2.43%, for a deal with high chances to complete. I would be long at this price.

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

Sign Up for Free

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
Sign Up for Free