Industrials

• TAL Education Group delivered a robust set of results in its fiscal first quarter of 2025, showcasing significant revenue growth and strategic expansions in both its learning services and content solutions sectors.
• These outcomes reflect the company’s focused execution on its operational strategies and its adaptability to the evolving educational needs.
• Financially, TAL Education Group reported a net revenue of USD 414.2 million, a substantial increase of 50.4% from the previous year, paralleled by a 56.9% increase in RMB terms.

• Revenue in FY06/24 declined 5.6% YoY, mainly due to the exclusion of a subsidiary from consolidation.
• The FY06/25 forecast calls for revenue of JPY21.0bn (+0.4% YoY) and operating profit of JPY2.5bn (+1.8% YoY).
• Earnings exceeded initial estimates through FY06/23, but FY06/24 performance was in line with the initial plan.

• Following highly challenged 1H24 performances from Air France-KLM and Lufthansa, but strength from IAG, we publish a deep dive on the drivers of divergent performances.
• We raise our forecasts at IAG but make heavy cuts at Air France-KLM and Lufthansa, with concerns over their ability to improve over pre-pandemic performances.
• This critical juncture, as each carrier implements some type of transformation plan, and carriers around the world see earnings re-set downwards, requires strong governance for expanding portfolios of airlines.

• We are reiterating our Buy rating, $8 price target and slightly tweaking our projections after urban-gro, as part of their engagement with a new accounting firm, announced a restatement of historic results, driven by deferred tax liabilities.
• We note the restatement will have no material impact on historic Revenue, Adjusted EBITDA and cash flows.
• That said, we now do not expect the company to announce 2Q24 results now before October.

• TAL Education Group delivered a robust set of results in its fiscal first quarter of 2025, showcasing significant revenue growth and strategic expansions in both its learning services and content solutions sectors.
• These outcomes reflect the company’s focused execution on its operational strategies and its adaptability to the evolving educational needs.
• Financially, TAL Education Group reported a net revenue of USD 414.2 million, a substantial increase of 50.4% from the previous year, paralleled by a 56.9% increase in RMB terms.

• Revenue in FY06/24 declined 5.6% YoY, mainly due to the exclusion of a subsidiary from consolidation.
• The FY06/25 forecast calls for revenue of JPY21.0bn (+0.4% YoY) and operating profit of JPY2.5bn (+1.8% YoY).
• Earnings exceeded initial estimates through FY06/23, but FY06/24 performance was in line with the initial plan.

• Following highly challenged 1H24 performances from Air France-KLM and Lufthansa, but strength from IAG, we publish a deep dive on the drivers of divergent performances.
• We raise our forecasts at IAG but make heavy cuts at Air France-KLM and Lufthansa, with concerns over their ability to improve over pre-pandemic performances.
• This critical juncture, as each carrier implements some type of transformation plan, and carriers around the world see earnings re-set downwards, requires strong governance for expanding portfolios of airlines.

• We are reiterating our Buy rating, $8 price target and slightly tweaking our projections after urban-gro, as part of their engagement with a new accounting firm, announced a restatement of historic results, driven by deferred tax liabilities.
• We note the restatement will have no material impact on historic Revenue, Adjusted EBITDA and cash flows.
• That said, we now do not expect the company to announce 2Q24 results now before October.

• 10 in 10 with Fu Yu Corporation – Precision Engineering for a Sustainable Future 10 Questions for https://investors.sgx.com/_security-types/stocks/F13 Fu Yu Corp has a significant presence in precision plastic injection moulding.
• 10 in 10 with Fu Yu Corporation – Precision Engineering for a Sustainable Future A key cornerstone in Fu Yu’s transformation is your Smart Factory, which will improve manufacturing capabilities and operational efficiency.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharti Airtel
• China Vanke
• China International Marine Containers A
• Vedanta Resources

• 10 in 10 with Fu Yu Corporation – Precision Engineering for a Sustainable Future 10 Questions for https://investors.sgx.com/_security-types/stocks/F13 Fu Yu Corp has a significant presence in precision plastic injection moulding.
• 10 in 10 with Fu Yu Corporation – Precision Engineering for a Sustainable Future A key cornerstone in Fu Yu’s transformation is your Smart Factory, which will improve manufacturing capabilities and operational efficiency.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Bharti Airtel
• China Vanke
• China International Marine Containers A
• Vedanta Resources

• Hindenburg Research released a report on SEBI Chief Madhabi Puri Buch, accusing her of conflicts of interest, particularly about the Adani Group.
• Analysis of Responses given by Madhabi & Dhaval Buch, SEBI, 360 One and Adani.
• Analysis of events and allegations made by Hindenburg on Madhabi and critical assessment on that.

• Recruit Holdings (6098 JP) ’s share price has been up more than 40% YTD driven by better-than-expected earnings and an announcement to buy back ¥600bn worth shares.
• The company’s 1Q earnings beat consensus and showed some recovery across all business segments, however, the labour markets are heading towards a decline.
• It seems that the company has run out of investment options, and we would not rush to make an entry as worst is not over yet for the company.

• Container ships are standardized, and fleets can be “market to market” values
• This approach suggests TS Lines’ equity could be worth > US$2.0 bn
• However, there are some caveats that come with this valuation approach

• CBAK Energy Technology continues to leverage its strong relationships with portable energy and home energy storage manufacturers to deliver solid results.
• Pricing pressures remain in the broader battery cell market but CBAK’s margins remained strong in Q2.
• The company recorded another profitable quarter and we think investor confidence in the company should continue to grow despite quarter-to-quarter fluctuations.

• CS Wind Corp (112610 KS) is one of the biggest players in wind tower globally with a substantial presence in the US. 
• Excellent Q2 24 operating numbers led to a sharp increase in the share price that is mainly driven by short covering. 
• The revenue growth occurred without sacrificing profitability, a sign that the company is in the driving seat.

• Revenue decreased to JPY78.8bn (-7.4% YoY), operating profit fell to JPY1.7bn (-46.5% YoY), and recurring profit dropped to JPY2.2bn (-40.5% YoY).
• Domestic machinery sales fell 18.9% YoY, overseas machinery sales declined 35.4% YoY, and equipment tools sales in Japan decreased 1.5% YoY.
• Revenue in the Construction Products segment was JPY21.8bn (-1.6% YoY), with segment profit at JPY745mn (-26.0% YoY).

• Quanta Services showcased robust financial performance for the second quarter of 2024, delivering double-digit growth in revenue, adjusted EBITDA, and adjusted earnings per share.
• The company reported significant strength in its backlog, achieving a record total of $31.3 billion accompanied by strong cash flow generation.
• These results stem largely from ongoing demand for Quanta’s services, fueled by multiyear programs focused on developing renewable energy and power grid infrastructure in North America.

• 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.

• 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.

• W.W. Grainger reported its financial results for the second quarter of 2024, reflecting a performance shaped by strategic alignments, moderate growth, and persistent macroeconomic challenges.
• The company, led by Chairman and CEO D.G. Macpherson and CFO Dee Merriwether, emphasized the ongoing commitment to customer-centric innovations and operational adjustments amidst a transforming economic landscape.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Hindenburg Research released a report on SEBI Chief Madhabi Puri Buch, accusing her of conflicts of interest, particularly about the Adani Group.
• Analysis of Responses given by Madhabi & Dhaval Buch, SEBI, 360 One and Adani.
• Analysis of events and allegations made by Hindenburg on Madhabi and critical assessment on that.

• Recruit Holdings (6098 JP) ’s share price has been up more than 40% YTD driven by better-than-expected earnings and an announcement to buy back ¥600bn worth shares.
• The company’s 1Q earnings beat consensus and showed some recovery across all business segments, however, the labour markets are heading towards a decline.
• It seems that the company has run out of investment options, and we would not rush to make an entry as worst is not over yet for the company.

• Container ships are standardized, and fleets can be “market to market” values
• This approach suggests TS Lines’ equity could be worth > US$2.0 bn
• However, there are some caveats that come with this valuation approach

• CBAK Energy Technology continues to leverage its strong relationships with portable energy and home energy storage manufacturers to deliver solid results.
• Pricing pressures remain in the broader battery cell market but CBAK’s margins remained strong in Q2.
• The company recorded another profitable quarter and we think investor confidence in the company should continue to grow despite quarter-to-quarter fluctuations.

• CS Wind Corp (112610 KS) is one of the biggest players in wind tower globally with a substantial presence in the US. 
• Excellent Q2 24 operating numbers led to a sharp increase in the share price that is mainly driven by short covering. 
• The revenue growth occurred without sacrificing profitability, a sign that the company is in the driving seat.

• Revenue decreased to JPY78.8bn (-7.4% YoY), operating profit fell to JPY1.7bn (-46.5% YoY), and recurring profit dropped to JPY2.2bn (-40.5% YoY).
• Domestic machinery sales fell 18.9% YoY, overseas machinery sales declined 35.4% YoY, and equipment tools sales in Japan decreased 1.5% YoY.
• Revenue in the Construction Products segment was JPY21.8bn (-1.6% YoY), with segment profit at JPY745mn (-26.0% YoY).

• Quanta Services showcased robust financial performance for the second quarter of 2024, delivering double-digit growth in revenue, adjusted EBITDA, and adjusted earnings per share.
• The company reported significant strength in its backlog, achieving a record total of $31.3 billion accompanied by strong cash flow generation.
• These results stem largely from ongoing demand for Quanta’s services, fueled by multiyear programs focused on developing renewable energy and power grid infrastructure in North America.

• 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.

• 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.

• W.W. Grainger reported its financial results for the second quarter of 2024, reflecting a performance shaped by strategic alignments, moderate growth, and persistent macroeconomic challenges.
• The company, led by Chairman and CEO D.G. Macpherson and CFO Dee Merriwether, emphasized the ongoing commitment to customer-centric innovations and operational adjustments amidst a transforming economic landscape.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Pacific Basin Shipping (2343 HK) may realise at least US$60m of revenue, or around 10% higher total TCE, in 2H24, based on its solid forward vessel coverage.  
• Sustained re-routing of vessels due to Middle East tension and higher demand from China due to fixed asset spending are supportive of rates. FFA is now 3-4% higher than spot.
• The stock is inexpensive at 9.7x PER and 0.8x P/B, and its 7.6% dividend yield is attractive. A solid balance sheet also means an upside on the payout ratio. 

• Despite rising spot rates, Maersk Q224 revenue and EBITDA both fell Y/Y
• After lifting pessimistic guidance in June, Maersk upped FY24 targets again
• We believe Maersk probably moved to limit spot exposure a year ago

• Pacific Basin Shipping (2343 HK) may realise at least US$60m of revenue, or around 10% higher total TCE, in 2H24, based on its solid forward vessel coverage.  
• Sustained re-routing of vessels due to Middle East tension and higher demand from China due to fixed asset spending are supportive of rates. FFA is now 3-4% higher than spot.
• The stock is inexpensive at 9.7x PER and 0.8x P/B, and its 7.6% dividend yield is attractive. A solid balance sheet also means an upside on the payout ratio. 

• Despite rising spot rates, Maersk Q224 revenue and EBITDA both fell Y/Y
• After lifting pessimistic guidance in June, Maersk upped FY24 targets again
• We believe Maersk probably moved to limit spot exposure a year ago

• 1Q results supported management’s full-year sales and profit guidance, which remains unchanged. Operating profit was up 2.7x YoY on a 17% increase in sales.
• Total new orders received increased by only 4.2% YoY and fell short of sales, but Aerospace & Defense orders were up 35.5% and slightly exceeded sales.
• Our own forecast – above management’s guidance this year with further growth next year – and our share price target are unchanged. 21% potential upside.

• 1Q results supported management’s full-year sales and profit guidance, which remains unchanged. Operating profit was up 2.7x YoY on a 17% increase in sales.
• Total new orders received increased by only 4.2% YoY and fell short of sales, but Aerospace & Defense orders were up 35.5% and slightly exceeded sales.
• Our own forecast – above management’s guidance this year with further growth next year – and our share price target are unchanged. 21% potential upside.