Industrials

• Korea’s majority party plans to amend the Capital Markets Act to base listed companies’ merger ratios on intrinsic rather than market value, dubbed the “Doosan Bobcat Prevention Law.”
• Other conglomerates, like Hanwha and Hyundai Motor Group, may execute mergers just before this amendment.
• We should expect shareholder-favorable merger ratios. So, we should position in such companies before announcements, ideally just before the new amendment’s enforcement.

• Sanil Electric reported excellent IPO book building results. The IPO price has been determined at 35,000 won, which is 16.7% higher than the high end of the IPO price range.
• The demand ratio from 2,205 institutional investors was 414 to 1. Sanil Electric (062040 KS) IPO will start trading on 29 July 2024. 
• Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (67% higher than the IPO price of 35,000 won).

• CSX Corporation reported mixed financial results for the first quarter of 2024, demonstrating solid operational performance amid various challenges including severe weather and infrastructure disruptions.
• The company recorded a total volume increase of 3% driven primarily by a 7% growth in its Intermodal business.
• Despite this growth in volume, revenue declined slightly by approximately 1% year over year to just under $3.7 billion, influenced by lower fuel surcharges and changes in mix.

• Q1 FY12/24 results: Revenue JPY12.6bn (+11.2% YoY), Operating profit JPY2.5bn (+19.1% YoY), Net income JPY2.4bn (+29.8% YoY).
• Orders and backlog: Orders JPY12.0bn (+7.6% YoY), Order backlog JPY17.4bn (+9.1% YoY), driven by semiconductor-related applications.
• FY12/24 forecast: Revenue JPY54.0bn (+9.6% YoY), Operating profit JPY10.9bn (+17.4% YoY), Capital investment JPY16.0bn (JPY5.7bn in FY12/23).

• Korea’s majority party plans to amend the Capital Markets Act to base listed companies’ merger ratios on intrinsic rather than market value, dubbed the “Doosan Bobcat Prevention Law.”
• Other conglomerates, like Hanwha and Hyundai Motor Group, may execute mergers just before this amendment.
• We should expect shareholder-favorable merger ratios. So, we should position in such companies before announcements, ideally just before the new amendment’s enforcement.

• Sanil Electric reported excellent IPO book building results. The IPO price has been determined at 35,000 won, which is 16.7% higher than the high end of the IPO price range.
• The demand ratio from 2,205 institutional investors was 414 to 1. Sanil Electric (062040 KS) IPO will start trading on 29 July 2024. 
• Our base case valuation of Sanil Electric is market cap of 1.8 trillion won or target price of 58,593 won (67% higher than the IPO price of 35,000 won).

• CSX Corporation reported mixed financial results for the first quarter of 2024, demonstrating solid operational performance amid various challenges including severe weather and infrastructure disruptions.
• The company recorded a total volume increase of 3% driven primarily by a 7% growth in its Intermodal business.
• Despite this growth in volume, revenue declined slightly by approximately 1% year over year to just under $3.7 billion, influenced by lower fuel surcharges and changes in mix.

• Q1 FY12/24 results: Revenue JPY12.6bn (+11.2% YoY), Operating profit JPY2.5bn (+19.1% YoY), Net income JPY2.4bn (+29.8% YoY).
• Orders and backlog: Orders JPY12.0bn (+7.6% YoY), Order backlog JPY17.4bn (+9.1% YoY), driven by semiconductor-related applications.
• FY12/24 forecast: Revenue JPY54.0bn (+9.6% YoY), Operating profit JPY10.9bn (+17.4% YoY), Capital investment JPY16.0bn (JPY5.7bn in FY12/23).

• The Doosan Group are planning to restructure Doosan Enerbility (034020 KS), Doosan Bobcat Inc (241560 KS) and Doosan Robotics (454910 KS) by reorganizing the business structure to find synergies.
• Doosan Enerbility will spin-off its stake in Doosan Bobcat and merge it with Doosan Robotics. Doosan Robotics will then look to acquire full control of Doosan Bobcat via a share swap.
• There could be an adhoc inclusion to the KOSPI200 INDEX at the end of October and global passives will buy Doosan Robotics (454910 KS) at the time of merger completion.

• Medi Assist Healthcare Services (0886371D IN) was listed on 23rd Jan 2024 after raising US$140m. The IPO had been 100% secondary, with the promoters and pre-IPO investors trimming their stakes.
• Medi Assist Healthcare Services (Medi Assist) provides third party administration services to insurance companies via its subsidiaries.
• Coming up for six-month lockup expiry are the firm’s pre-IPO shareholders and a portion of the promoters’ stakes.

• Strong team, innovative product, and potential market demand in auto tech space support highly speculative projections for investment in Joby Aerospace
• Despite concerns about aggressive projections, company’s current valuation offers attractive entry point for investors seeking substantial upside with decent margin of safety
• Joby’s eVTOL aircraft development and plans for air taxi service differentiate it from other failed SPAC ventures, positioning it as top-tier hard tech startup with potential for success

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.

• Timee has set an indicative IPO price range of ¥1,350-1,450 per share and will raise US$280m (at the midpoint) where existing shareholders will sell down part of their ownership.
• We expect Timee’s earnings to grow as the company is still in its early stages and with further growth in scale, we expect Timee’s margins to continue to expand further.
• Our analysis shows that Timee Inc (215A JP) IPO is valued attractively as the company has better-than-peer margin profile which suggests that there is further upside to implied valuation multiples.

• Nextracker’s Fourth Quarter and Full Fiscal Year 2024 conference detailed a period of significant achievement and robust performance, balanced by a practical outlook on the evolving challenges and opportunities in the solar industry.
• The company reported a strong year with highlights including a 40% annual increase in Q4 revenue to $737 million and a doubling of adjusted EBITDA to $160 million for the same period.
• This capped a fiscal year where revenue soared over 30% to hit $2.5 billion with adjusted EDBITA more than doubling to $521 million.

• The Doosan Group are planning to restructure Doosan Enerbility (034020 KS), Doosan Bobcat Inc (241560 KS) and Doosan Robotics (454910 KS) by reorganizing the business structure to find synergies.
• Doosan Enerbility will spin-off its stake in Doosan Bobcat and merge it with Doosan Robotics. Doosan Robotics will then look to acquire full control of Doosan Bobcat via a share swap.
• There could be an adhoc inclusion to the KOSPI200 INDEX at the end of October and global passives will buy Doosan Robotics (454910 KS) at the time of merger completion.

• Medi Assist Healthcare Services (0886371D IN) was listed on 23rd Jan 2024 after raising US$140m. The IPO had been 100% secondary, with the promoters and pre-IPO investors trimming their stakes.
• Medi Assist Healthcare Services (Medi Assist) provides third party administration services to insurance companies via its subsidiaries.
• Coming up for six-month lockup expiry are the firm’s pre-IPO shareholders and a portion of the promoters’ stakes.

• Strong team, innovative product, and potential market demand in auto tech space support highly speculative projections for investment in Joby Aerospace
• Despite concerns about aggressive projections, company’s current valuation offers attractive entry point for investors seeking substantial upside with decent margin of safety
• Joby’s eVTOL aircraft development and plans for air taxi service differentiate it from other failed SPAC ventures, positioning it as top-tier hard tech startup with potential for success

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.

• Timee has set an indicative IPO price range of ¥1,350-1,450 per share and will raise US$280m (at the midpoint) where existing shareholders will sell down part of their ownership.
• We expect Timee’s earnings to grow as the company is still in its early stages and with further growth in scale, we expect Timee’s margins to continue to expand further.
• Our analysis shows that Timee Inc (215A JP) IPO is valued attractively as the company has better-than-peer margin profile which suggests that there is further upside to implied valuation multiples.

• Nextracker’s Fourth Quarter and Full Fiscal Year 2024 conference detailed a period of significant achievement and robust performance, balanced by a practical outlook on the evolving challenges and opportunities in the solar industry.
• The company reported a strong year with highlights including a 40% annual increase in Q4 revenue to $737 million and a doubling of adjusted EBITDA to $160 million for the same period.
• This capped a fiscal year where revenue soared over 30% to hit $2.5 billion with adjusted EDBITA more than doubling to $521 million.

• SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
• There have been some changes to the SSE 180 expected ADDs/DELs lists since our last insight.

• SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
• In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
• There have been some changes to the SSE 180 expected ADDs/DELs lists since our last insight.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net BUY RMB +15.9bn of A-shares. NORTHBOUND bought Financials, Industry, Infotech, etc. They sold Communications (which was a HUGE SOUTHBOUND buy) and Pharma/Healthcare.
• It is notable that net flows as a percentage of value traded are clearly “short gamma”, which is to say, sector underperformers are being sold, sector outperformers being bought.

• T.S. Lines (TSL HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
• T.S. Lines (TSL) is a container shipping firm primarily operating in the Asia Pacific (APAC) region.
• In this note, we look at the firm’s past performance.

• TS Lines’ comp Wan Hai has reported strong numbers so far in 2024
• But TS Lines is unlikely to match Wan Hai’s impressive H124 gains
• Next for TS Lines: H124 financials and valuation vs Wan Hai, RCL

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net BUY RMB +15.9bn of A-shares. NORTHBOUND bought Financials, Industry, Infotech, etc. They sold Communications (which was a HUGE SOUTHBOUND buy) and Pharma/Healthcare.
• It is notable that net flows as a percentage of value traded are clearly “short gamma”, which is to say, sector underperformers are being sold, sector outperformers being bought.

• T.S. Lines (TSL HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
• T.S. Lines (TSL) is a container shipping firm primarily operating in the Asia Pacific (APAC) region.
• In this note, we look at the firm’s past performance.

• TS Lines’ comp Wan Hai has reported strong numbers so far in 2024
• But TS Lines is unlikely to match Wan Hai’s impressive H124 gains
• Next for TS Lines: H124 financials and valuation vs Wan Hai, RCL

• On 11 July, the Doosan Group announced a major business structure reorganization, including the delisting of Doosan Bobcat Inc (241560 KS).
• In our view (over the next 3-6 months), these transactions appear to be value-destroying for Doosan Bobcat and Doosan Enerbility minority shareholders but positive for Doosan Robotics shareholders.
• Doosan Robotics plans to acquire the remaining 54% stake in Doosan Bobcat through a tender offer. Once Doosan Robotics fully owns Doosan Bobcat, its shares will be delisted.

• Hesai Group shares significantly underperformed in 2024 with shares down ~47% over the year versus a ~23% gain on the Nasdaq Composite.
• Moreover, a San Francisco-based Ouster, one of the key competitors among LiDAR makers, outperformed Hesai Group and the NASDAQ on a year-to-date basis.
• I believe Hesai Group should initiate a share buyback program as RoboSense has recently announced on-market share repurchase plan to create value for its shareholders.  

• Lufthansa mainline losses in 2024 force management to pursue transformation
• ​Portfolio management challenges driven by a variety of factors including LH mainline unit costs and pricing at sister companies
• Much work to do to turn ITA around, while firm management focus is required at home

• ASGN Inc. delivered a robust set of results for the first quarter of 2024, demonstrating solid growth in certain areas despite challenges in others.
• With revenue of $1.05 billion and an adjusted EBITDA of $10.3 million, both metrics approached the upper end of the company’s guidance, underscoring management’s effective operational execution and strategic foresight.
• The company’s diverse portfolio, balancing commercial and government segments, has provided a buffer against the cyclical nature of IT spending, particularly amid ongoing economic uncertainties.

• Sensata Technologies has reported a solid performance in the first quarter of 2024, reflecting both advances and challenges within its diverse portfolio.
• This review aims to provide an impartial analysis of Sensata’s recent financial results and strategic engagements as disclosed in their latest financial disclosures.
• Beginning with the financial metrics, Sensata Technologies recorded a slight revenue increase from $998 million in Q1 2023 to $1.007 billion in Q1 2024, representing a modest year-over-year growth of 1%.

• Revenue increased by 13.4% YoY to JPY5.8bn, driven by new customers and expanded maintenance services for existing customers.
• Operating profit rose by 32.3% YoY to JPY342mn, with an OPM up 0.8pp YoY to 5.9%.
• Gross profit reached JPY1.3bn (+12.8% YoY), with a GPM of 22.6% (-0.1pp YoY), and SG&A expenses were JPY960mn (+7.1% YoY).

• On 11 July, the Doosan Group announced a major business structure reorganization, including the delisting of Doosan Bobcat Inc (241560 KS).
• In our view (over the next 3-6 months), these transactions appear to be value-destroying for Doosan Bobcat and Doosan Enerbility minority shareholders but positive for Doosan Robotics shareholders.
• Doosan Robotics plans to acquire the remaining 54% stake in Doosan Bobcat through a tender offer. Once Doosan Robotics fully owns Doosan Bobcat, its shares will be delisted.

• Hesai Group shares significantly underperformed in 2024 with shares down ~47% over the year versus a ~23% gain on the Nasdaq Composite.
• Moreover, a San Francisco-based Ouster, one of the key competitors among LiDAR makers, outperformed Hesai Group and the NASDAQ on a year-to-date basis.
• I believe Hesai Group should initiate a share buyback program as RoboSense has recently announced on-market share repurchase plan to create value for its shareholders.  

• Lufthansa mainline losses in 2024 force management to pursue transformation
• ​Portfolio management challenges driven by a variety of factors including LH mainline unit costs and pricing at sister companies
• Much work to do to turn ITA around, while firm management focus is required at home

• ASGN Inc. delivered a robust set of results for the first quarter of 2024, demonstrating solid growth in certain areas despite challenges in others.
• With revenue of $1.05 billion and an adjusted EBITDA of $10.3 million, both metrics approached the upper end of the company’s guidance, underscoring management’s effective operational execution and strategic foresight.
• The company’s diverse portfolio, balancing commercial and government segments, has provided a buffer against the cyclical nature of IT spending, particularly amid ongoing economic uncertainties.

• Sensata Technologies has reported a solid performance in the first quarter of 2024, reflecting both advances and challenges within its diverse portfolio.
• This review aims to provide an impartial analysis of Sensata’s recent financial results and strategic engagements as disclosed in their latest financial disclosures.
• Beginning with the financial metrics, Sensata Technologies recorded a slight revenue increase from $998 million in Q1 2023 to $1.007 billion in Q1 2024, representing a modest year-over-year growth of 1%.

• Revenue increased by 13.4% YoY to JPY5.8bn, driven by new customers and expanded maintenance services for existing customers.
• Operating profit rose by 32.3% YoY to JPY342mn, with an OPM up 0.8pp YoY to 5.9%.
• Gross profit reached JPY1.3bn (+12.8% YoY), with a GPM of 22.6% (-0.1pp YoY), and SG&A expenses were JPY960mn (+7.1% YoY).