Industrials

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• Unlike the other popular Chinese indices (CSI, SSE, ChiNext, etc.) that rebalance semiannually, the STAR 50 index has a quarterly rebalance cycle and the next rebalance will be in September.
• With the reference period for the September 2024 STAR 50 index rebal event coming to an end, we have presented our final expectations for ADDs and DELs in this insight.

• Latest fare data suggests an incrementally more concerning trend for Ryanair pricing from June.
• Concerns over pricing continue to increase in Europe, following Lufthansa’s profit warning last week.
• We cut our FY25 net income by 9% to €2,289m albeit remain above consensus of €2,170m.

• Rentokil Initial (RTO) is trading at a historically low valuation despite being in a resilient industry like pest control
• Rentokil is well-managed with a long-tenured management team that consistently exceeds guidance and has a track record of double-digit EPS growth
• With a P/E ratio of 17.5x, Rentokil presents an attractive investment opportunity with potential for a 30%+ return by the end of 2025 if targets are met and the multiple reverts to historical averages

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.

• Rolls Royce is a British company known for its power business, mainly converting stored energy into kinetic energy through big engines such as airplane engines.
• The company’s core business is in civil aerospace, with a focus on engineering excellence and a history dating back to the early 1900s.
• The publicly traded entity of Rolls Royce Holdings focuses on the aerospace market, specifically in the production of airplane engines for large commercial planes and business.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Blackline Safety provides gas detection and safety monitoring services, currently undervalued at 2.3x NTM sales
• Transitioning from hardware to SaaS will potentially double the company’s value in 3 years
• Management’s experience in the industry supports the company’s potential for future success and 100% upside over the next 3 years through revenue growth and margin improvement.

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.

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• Unlike the other popular Chinese indices (CSI, SSE, ChiNext, etc.) that rebalance semiannually, the STAR 50 index has a quarterly rebalance cycle and the next rebalance will be in September.
• With the reference period for the September 2024 STAR 50 index rebal event coming to an end, we have presented our final expectations for ADDs and DELs in this insight.

• Latest fare data suggests an incrementally more concerning trend for Ryanair pricing from June.
• Concerns over pricing continue to increase in Europe, following Lufthansa’s profit warning last week.
• We cut our FY25 net income by 9% to €2,289m albeit remain above consensus of €2,170m.

• Rentokil Initial (RTO) is trading at a historically low valuation despite being in a resilient industry like pest control
• Rentokil is well-managed with a long-tenured management team that consistently exceeds guidance and has a track record of double-digit EPS growth
• With a P/E ratio of 17.5x, Rentokil presents an attractive investment opportunity with potential for a 30%+ return by the end of 2025 if targets are met and the multiple reverts to historical averages

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.

• Rolls Royce is a British company known for its power business, mainly converting stored energy into kinetic energy through big engines such as airplane engines.
• The company’s core business is in civil aerospace, with a focus on engineering excellence and a history dating back to the early 1900s.
• The publicly traded entity of Rolls Royce Holdings focuses on the aerospace market, specifically in the production of airplane engines for large commercial planes and business.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Blackline Safety provides gas detection and safety monitoring services, currently undervalued at 2.3x NTM sales
• Transitioning from hardware to SaaS will potentially double the company’s value in 3 years
• Management’s experience in the industry supports the company’s potential for future success and 100% upside over the next 3 years through revenue growth and margin improvement.

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.

• 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