Industrials

• In late February, a specialty media outlet noted Alps Logistics (9055 JP) was up for sale. I missed that. Yesterday pre-close, a headline crossed the wires. A deal was imminent.
• Nikkei overnight said “¥150bn+ market cap”. I thought KKR might slightly overpay the Hitachi Transport System (9086 JP) multiple paid. That meant +13% today was full-ish. I was wrong.
• KKR is paying ¥5,774 to minorities, and about ¥4,084-ish to the parent, who is reinvesting at ¥5,774. This is a total knock-out price paid. HUGE MINORITY WIN.

• Alps Logistics (9055 JP) recommended a pre-conditional tender offer from a KKR & Co (KKR US) subsidiary at JPY5,774, 32.7% and 69.8% premium to the last close and undisturbed price, respectively. 
• The pre-condition is approvals under competition laws of Japan, China, the EU, South Korea and Vietnam. The tender offer is expected to start in mid-August.
• The offer represents an all-time high and is a knockout bid. While the timing of regulatory approvals is a risk, the transaction is a done deal. 

• FY2023 Success: Daikin achieved record-high sales and profit, driven by FX impacts. Despite challenges like reduced demand, the Air Conditioning business expanded in key markets.
• Ambitious Targets: FY3/25 targets include surpassing previous financial records, despite continued sluggish demand.
• Cautious Outlook: While optimistic about market share gains, reservations persist, particularly regarding heat pumps. Stock performance remains steady, trading in line with historical averages.

• News: The Nikkei on April 25th reported, “A dark cloud is hovering over the future of the electric car (EV) market.
• The low prices of Chinese EV manufacturers, backed by Chinese government subsidies, are adversely affecting the performance of related companies such as motor giant Nidec Corporation (TSE Prime: 6594).
• The spread of low-cost EVs will substantially change the structure of the industry, and investors are beginning to look out for companies that will benefit from the commoditization of EVs.

• NN Inc. is a high quality diversified industrial company that combines in-depth materials science expertise with advanced engineering and production capabilities to design and manufacture high-precision metal and plastic components and assemblies for a variety of end markets on a global basis.
• The company is targeting the electric vehicle and electric grid industries which should grow at above average growth rates.
• In 2023, the company began a series of strategic initiatives to strengthen leadership, improve profitability, and generate higher levels of free cash flow.

• WillScot Mobile Mini has completed significant acquisitions to strengthen its leadership position in modular office and mobile storage industries.
• The company believes in seizing no-brainer opportunities for acquisitions despite warnings from renowned investors like Warren Buffett and Charlie Munger.
• WillScot Mobile Mini focuses on strategic advantages, organic growth, high returns on investment, and disciplined valuation methodologies to create long-term 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.

• In late February, a specialty media outlet noted Alps Logistics (9055 JP) was up for sale. I missed that. Yesterday pre-close, a headline crossed the wires. A deal was imminent.
• Nikkei overnight said “¥150bn+ market cap”. I thought KKR might slightly overpay the Hitachi Transport System (9086 JP) multiple paid. That meant +13% today was full-ish. I was wrong.
• KKR is paying ¥5,774 to minorities, and about ¥4,084-ish to the parent, who is reinvesting at ¥5,774. This is a total knock-out price paid. HUGE MINORITY WIN.

• Alps Logistics (9055 JP) recommended a pre-conditional tender offer from a KKR & Co (KKR US) subsidiary at JPY5,774, 32.7% and 69.8% premium to the last close and undisturbed price, respectively. 
• The pre-condition is approvals under competition laws of Japan, China, the EU, South Korea and Vietnam. The tender offer is expected to start in mid-August.
• The offer represents an all-time high and is a knockout bid. While the timing of regulatory approvals is a risk, the transaction is a done deal. 

• FY2023 Success: Daikin achieved record-high sales and profit, driven by FX impacts. Despite challenges like reduced demand, the Air Conditioning business expanded in key markets.
• Ambitious Targets: FY3/25 targets include surpassing previous financial records, despite continued sluggish demand.
• Cautious Outlook: While optimistic about market share gains, reservations persist, particularly regarding heat pumps. Stock performance remains steady, trading in line with historical averages.

• News: The Nikkei on April 25th reported, “A dark cloud is hovering over the future of the electric car (EV) market.
• The low prices of Chinese EV manufacturers, backed by Chinese government subsidies, are adversely affecting the performance of related companies such as motor giant Nidec Corporation (TSE Prime: 6594).
• The spread of low-cost EVs will substantially change the structure of the industry, and investors are beginning to look out for companies that will benefit from the commoditization of EVs.

• NN Inc. is a high quality diversified industrial company that combines in-depth materials science expertise with advanced engineering and production capabilities to design and manufacture high-precision metal and plastic components and assemblies for a variety of end markets on a global basis.
• The company is targeting the electric vehicle and electric grid industries which should grow at above average growth rates.
• In 2023, the company began a series of strategic initiatives to strengthen leadership, improve profitability, and generate higher levels of free cash flow.

• WillScot Mobile Mini has completed significant acquisitions to strengthen its leadership position in modular office and mobile storage industries.
• The company believes in seizing no-brainer opportunities for acquisitions despite warnings from renowned investors like Warren Buffett and Charlie Munger.
• WillScot Mobile Mini focuses on strategic advantages, organic growth, high returns on investment, and disciplined valuation methodologies to create long-term 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.

• There was a news article I missed in late February saying Alps Alpine (6770 JP), parent of Alps Logistics (9055 JP) was in the process of selling the logistics unit.
• A deal made sense for a strategic given the upcoming “2024 Problem”. Pre-close, headlines blared, the stock popped 12%, now we’re at double the end-February price.
• Late in the evening,Alps Logistics said it had received a bid from Logisteed but nothing had been decided. This morning we have a few more details, but nothing concrete

• Last May, Nippon Yusen Kk (9101 JP) announced buybacks of ¥200bn over 2 years. In August, they changed it to say  ¥200bn in the next nine months.
• That helped support the stock through early March. It was big, and a decent percentage of ADV. Today, they announced earnings and guidance and another ¥100bn buyback through April 2025.
• Earnings were OK. Guidance is a little low vs the Street. The stock popped 5% from where it was trading. Lower impact vs 2023. More cross-holder overhang consideration. 

• After a 96.5% gain on listing day, HD Hyundai Marine Solution (443060 KS) is very close to levels needed for Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusion in June.
• HD Hyundai Marine Solution needs to outperform the 50th ranked stock in the KOSPI2 INDEX by 11.4% on average over the next 15 trading days to be added to the index.
• Retail investors sold 25% of their allocation on listing day while foreign investors sold 22% of their IPO allocation with local institutions mopping up the shares.

• MHI’s stock fell 7% following the announcement of results. Guidance for FY3/25 missed analyst expectations
• Even so, MHI remains a key beneficiary of the global shift to clean energy and national policies aimed at bolstering national security 
• We remain bullish. The stock has performed well this year and but 13x EV/EBIT seems reasonable given the structural drivers

• Innospace is getting ready to complete its IPO in June 2024. According to bankers’ valuation, the implied market cap of Innospace is from 347 billion won to 434 billion won.
• Innospace engages in the satellite launch vehicle production and launch service business.
• The company estimates its sales to increase from 0.2 billion won in 2023 to 2.0 billion won in 2024, 47.8 billion won in 2025, and 97.2 billion won in 2026.

• Qantm Intellectual Property (QIP AU)‘s non-binding proposal from IPH Ltd (IPH AU) is at A$0.11 cash + 0.291 IPH shares per QIP share, a 4.5% premium to Adamantem’s A$1.817 offer.
• Since announcing the Adamantem non-binding proposal on 14 March, the IPH offer has been 4.3% higher than the Adamantem offer on average. 
• The IPH proposal also requires approval from the ACCC and NZCC. The presence of two bidders increases the probability of a binding proposal (with a bump). 

• It always seemed like a question of when, not if, IPH (IPH AU) would make an Offer for QANTM (QIP AU). IPH previously approached QANTM in 2018, but was spurned.
• Capitalising on ongoing extensions to Adamantem’s exclusivity, as it relates to its all-cash A$1.817/share Offer by way of a Scheme, IPH has now tabled an all-scrip, plus A$0.11/share dividend NBIO.
• IPH’s implied Scheme value of A$1.90/share is a premium to Adamantem’s proposal. The catch: apart from terms being indicative, IPH’s Offer requires ACCC and NZCC clearance.

• Roper Technologies had a robust start to the year, with double-digit growth in revenue, EBITDA, adjusted DEPS, and free cash flow noted for Q1, which has spurred an increased full-year outlook.
• The Q1 report highlighted the completion of another milestone for the company – the acquisition of Procare Solutions, a provider of software and integrated payments for the early childhood education market.
• The total revenue and organic revenue increased by 14% and 8% respectively while EBITDA saw a 16% growth, with EBITDA margin expanding by 60 basis points to 40.2%.

• Mastech Digital, based outside Pittsburgh, PA is an IT staffing business with a data and analytics, consulting, and project management service serving blue-chip customers in the US. Both businesses have been affected by the rapid decline in the economy and IT hiring as customers pull back.
• The company trades well below its peers and we expect stock price appreciation when it returns to growth aided by stock buybacks.
• It also plans to grow through acquisition.

• JetBlue Airways Corporation (JBLU) identified as an attractive short opportunity due to unsustainable competitive and financial position
• Struggling as sub-scale industry participant with shrinking margins, issues with GTF engines, and tough upcoming comps
• Predicted restructuring within next 2-4 years as JBLU faces challenges in overcoming fundamental issues and high debt levels

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.

• There was a news article I missed in late February saying Alps Alpine (6770 JP), parent of Alps Logistics (9055 JP) was in the process of selling the logistics unit.
• A deal made sense for a strategic given the upcoming “2024 Problem”. Pre-close, headlines blared, the stock popped 12%, now we’re at double the end-February price.
• Late in the evening,Alps Logistics said it had received a bid from Logisteed but nothing had been decided. This morning we have a few more details, but nothing concrete

• Last May, Nippon Yusen Kk (9101 JP) announced buybacks of ¥200bn over 2 years. In August, they changed it to say  ¥200bn in the next nine months.
• That helped support the stock through early March. It was big, and a decent percentage of ADV. Today, they announced earnings and guidance and another ¥100bn buyback through April 2025.
• Earnings were OK. Guidance is a little low vs the Street. The stock popped 5% from where it was trading. Lower impact vs 2023. More cross-holder overhang consideration. 

• After a 96.5% gain on listing day, HD Hyundai Marine Solution (443060 KS) is very close to levels needed for Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) inclusion in June.
• HD Hyundai Marine Solution needs to outperform the 50th ranked stock in the KOSPI2 INDEX by 11.4% on average over the next 15 trading days to be added to the index.
• Retail investors sold 25% of their allocation on listing day while foreign investors sold 22% of their IPO allocation with local institutions mopping up the shares.

• MHI’s stock fell 7% following the announcement of results. Guidance for FY3/25 missed analyst expectations
• Even so, MHI remains a key beneficiary of the global shift to clean energy and national policies aimed at bolstering national security 
• We remain bullish. The stock has performed well this year and but 13x EV/EBIT seems reasonable given the structural drivers

• Innospace is getting ready to complete its IPO in June 2024. According to bankers’ valuation, the implied market cap of Innospace is from 347 billion won to 434 billion won.
• Innospace engages in the satellite launch vehicle production and launch service business.
• The company estimates its sales to increase from 0.2 billion won in 2023 to 2.0 billion won in 2024, 47.8 billion won in 2025, and 97.2 billion won in 2026.

• Qantm Intellectual Property (QIP AU)‘s non-binding proposal from IPH Ltd (IPH AU) is at A$0.11 cash + 0.291 IPH shares per QIP share, a 4.5% premium to Adamantem’s A$1.817 offer.
• Since announcing the Adamantem non-binding proposal on 14 March, the IPH offer has been 4.3% higher than the Adamantem offer on average. 
• The IPH proposal also requires approval from the ACCC and NZCC. The presence of two bidders increases the probability of a binding proposal (with a bump). 

• It always seemed like a question of when, not if, IPH (IPH AU) would make an Offer for QANTM (QIP AU). IPH previously approached QANTM in 2018, but was spurned.
• Capitalising on ongoing extensions to Adamantem’s exclusivity, as it relates to its all-cash A$1.817/share Offer by way of a Scheme, IPH has now tabled an all-scrip, plus A$0.11/share dividend NBIO.
• IPH’s implied Scheme value of A$1.90/share is a premium to Adamantem’s proposal. The catch: apart from terms being indicative, IPH’s Offer requires ACCC and NZCC clearance.

• Roper Technologies had a robust start to the year, with double-digit growth in revenue, EBITDA, adjusted DEPS, and free cash flow noted for Q1, which has spurred an increased full-year outlook.
• The Q1 report highlighted the completion of another milestone for the company – the acquisition of Procare Solutions, a provider of software and integrated payments for the early childhood education market.
• The total revenue and organic revenue increased by 14% and 8% respectively while EBITDA saw a 16% growth, with EBITDA margin expanding by 60 basis points to 40.2%.

• Mastech Digital, based outside Pittsburgh, PA is an IT staffing business with a data and analytics, consulting, and project management service serving blue-chip customers in the US. Both businesses have been affected by the rapid decline in the economy and IT hiring as customers pull back.
• The company trades well below its peers and we expect stock price appreciation when it returns to growth aided by stock buybacks.
• It also plans to grow through acquisition.

• JetBlue Airways Corporation (JBLU) identified as an attractive short opportunity due to unsustainable competitive and financial position
• Struggling as sub-scale industry participant with shrinking margins, issues with GTF engines, and tough upcoming comps
• Predicted restructuring within next 2-4 years as JBLU faces challenges in overcoming fundamental issues and high debt levels

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.

• Kawasaki Kisen Kaisha (9107 JP) today announced earnings. Ocean Network Express earnings were out earlier and beyond that, Consolidated Revs beat, OP faltered, but NP was spot on guidance.
• Guidance for the year to March 2025 is well ahead of consensus on revenue, slightly ahead on OP, and just a wee bit ahead on NP. 
• But the company raised its 5yr MTMP Shareholder Return from ¥500bn to ¥700bn and set a new ¥100bn (5.5%) buyback to be executed in the next 3 months.

• Today, after the close, Chilled & Frozen Logistics Holdings (9099 JP) released a required (by the FIEA) Target Opinion Statement saying “Opinion Withheld.”
• C&F notes that it had received 9 possible counter-proposals, offered due dili to a certain extent, and by May 1, had 4 binding offers. 
• There are interesting competitive dynamics at play here, but cross-holding concentration matters. The question is… How much is enough?

• Singapore’s Olam Agri and global commodity merchant Louis Dreyfus Company (LDC) are duking it out for Namoi Cotton Co Operative (NAM AU), Australia’s largest cotton producer.
• After both initially lobbed competing Schemes, both have now tabled off-market Offers – A$0.67/share from LDC, A$0.66/share from Olam – each contingent on a 50.1% acceptance hurdle, FIRB, and ACCC. 
• LDC, currently holding 17%, announced it will reject Olam Agri’s Offer. Top shareholder Samuel Terry Asset Management, with 24.5%, is expected to support the winning (or superior) bid.  

• Singamas Container Holdings (716 HK) is interesting in that it has a net cash of US$300m (HK$2.35bn), but its market capitalisation is only HK$1.5bn. 
• This is a possible privatisation candidate given the steep discount to cash. The thin trading volume made it difficult to function as a financing platform.
• Business-Wise, it should have passed the trough as global container box plant utilisation is expected to improve in the next two years, driving profitability recovery.

• Over the past two weeks we’ve discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
• Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
• We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&P 500 as healthy/normal within the ongoing bull market.

• We expect Singapore Airlines to report a disappointing 4Q24 on 15 May, as earnings normalisation continues.
• Inflationary pressure is a key theme at SIA, with it suffering one of the highest levels of inflation in the APAC region.
• Our forecasts for FY25, which suggest further earnings normalisation, are c.20% below consensus at the operating level.

• Titan International is a global manufacturer of off-the-road tires, wheels and undercarriages.
• The company serves the agricultural, earthmoving / construction, and consumer markets.
• Recent strategic actions have created higher margins in recent years and brought the leverage ratio down to 2.0x.

• Kawasaki Kisen Kaisha (9107 JP) today announced earnings. Ocean Network Express earnings were out earlier and beyond that, Consolidated Revs beat, OP faltered, but NP was spot on guidance.
• Guidance for the year to March 2025 is well ahead of consensus on revenue, slightly ahead on OP, and just a wee bit ahead on NP. 
• But the company raised its 5yr MTMP Shareholder Return from ¥500bn to ¥700bn and set a new ¥100bn (5.5%) buyback to be executed in the next 3 months.

• Today, after the close, Chilled & Frozen Logistics Holdings (9099 JP) released a required (by the FIEA) Target Opinion Statement saying “Opinion Withheld.”
• C&F notes that it had received 9 possible counter-proposals, offered due dili to a certain extent, and by May 1, had 4 binding offers. 
• There are interesting competitive dynamics at play here, but cross-holding concentration matters. The question is… How much is enough?

• Singapore’s Olam Agri and global commodity merchant Louis Dreyfus Company (LDC) are duking it out for Namoi Cotton Co Operative (NAM AU), Australia’s largest cotton producer.
• After both initially lobbed competing Schemes, both have now tabled off-market Offers – A$0.67/share from LDC, A$0.66/share from Olam – each contingent on a 50.1% acceptance hurdle, FIRB, and ACCC. 
• LDC, currently holding 17%, announced it will reject Olam Agri’s Offer. Top shareholder Samuel Terry Asset Management, with 24.5%, is expected to support the winning (or superior) bid.  

• Singamas Container Holdings (716 HK) is interesting in that it has a net cash of US$300m (HK$2.35bn), but its market capitalisation is only HK$1.5bn. 
• This is a possible privatisation candidate given the steep discount to cash. The thin trading volume made it difficult to function as a financing platform.
• Business-Wise, it should have passed the trough as global container box plant utilisation is expected to improve in the next two years, driving profitability recovery.

• Over the past two weeks we’ve discussed the possibility that further downside was limited (4/23/24 Compass) and mounting evidence that suggests the pullback lows may be in (4/30/24 Compass).
• Major risk-on developments for the broad equity market have continued to roll in over the past week, which we discuss below.
• We continue to believe the lows are in, and we see the pullback to the 100-day MA on the S&P 500 as healthy/normal within the ongoing bull market.

• We expect Singapore Airlines to report a disappointing 4Q24 on 15 May, as earnings normalisation continues.
• Inflationary pressure is a key theme at SIA, with it suffering one of the highest levels of inflation in the APAC region.
• Our forecasts for FY25, which suggest further earnings normalisation, are c.20% below consensus at the operating level.

• Titan International is a global manufacturer of off-the-road tires, wheels and undercarriages.
• The company serves the agricultural, earthmoving / construction, and consumer markets.
• Recent strategic actions have created higher margins in recent years and brought the leverage ratio down to 2.0x.

• In this insight we show drivers of LalaTech’s +US$1bn turnaround in OpInc
• We also evaluate which drivers are likely to generate future improvements
• Lalatech won’t repeat incredible 2021-23 CoR, OpEx performances, in our view

• Komatsu’s operating profits for FY3/24 of Y607 billion (+24% YoY) surpassed estimates on strong U.S. equipment sales
• Komatsu guides for FY3/25 operating profits of ¥557 billion (-8.3% YoY), assuming ¥140/US$
• We believe that the market remains too focused on the near-term growth slowdown, while we believe that Komatsu is attractively priced at under 10x EV/EBIT

• On 3 May, it was reported that Hankook Tire & Technology agreed to purchase a 25% in Hanon Systems for 1.37 trillion won from Hahn & Co private equity firm. 
• After this deal, Hankook Tire & Technology will own a controlling 50.5% stake in Hanon Systems.
• We have a negative view on Hankook Tire & Technology’s additional purchase of Hanon Systems, which has experienced a declining profit margins in the past several years.

• HD Hyundai Marine Solution (443060 KS) had raised around US$539m in its Korean IPO, after pricing the deal at the top end of KRW83,400/share.
• HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
• In this note, we will talk about the demand for the deal and other trading dynamics.

Adani Ports and Special Economic Zone (APSEZ) has released FY 2023-24 numbers that were slightly above expectations. The company’s strong revenue and EBITDA growth (of 28% and 24% y-o-y, respectively) exceeded management’s guidance, supported by higher than estimated growth in cargo volumes. APSEZ appears poised to achieve its target of 500 MMT cargo volumes in 2025, supported by organic growth and the contribution from its latest acquisition (Gopalpur Port). Net adjusted leverage improved to 2.9x (FY 2022-23: 4.0x). We expect leverage to be stable in FY 2024-25, in line with management’s guidance.

APSEZ appears to have a renewed appetite for expansion (particularly in overseas markets, amid its already strong domestic position), which may present event risks. In the meantime, the company may remain affected by negative headlines related to corporate governance issues at the broader Adani Group.

• TAL Education Group showcased a strong financial performance in the fiscal fourth quarter and full fiscal year of 2024.
• The group’s Learning Services and Content Solutions segments demonstrated growth, driven by focused product development and a broadening customer base.
• The Learning Services sector saw continuous growth, supported by the expansion of learning centers and increased enrollment.

• W.W. Grainger Inc. started 2024 positively, with Q1 sales up by 3.5% (or 4.9% on a daily organic constant currency basis), gaining contributions from both High-Touch Solutions and Endless Assortment business segments.
• One highlight was the successful Grainger Show in Orlando, which saw over 10,000 of their customers, suppliers, and team members gathering to showcase the company’s offering.
• The event was fruitful, yielding positive feedback due to the partnerships formed and customer problems solved.

• In the first quarter 2024 earnings, Dover Corporation showed promising results.
• The quarter’s results were consistent with expectations, despite initial concerns that it might be the most challenging quarter.
• Counter cyclical portfolios were offset by a strong performance in end markets along with improving order and shipment trends in biopharma components and growth platforms.

• L3Harris Technologies, a leading provider of national security solutions, reported strong key performance metrics in the Q1 2024 with an industry-leading margin expansion of 80 basis points to 15.1%.
• This has fueled an upbeat full-year 2024 margin, EPS, and revenue guidance.
• The operating income went up by $150 million, boosting EPS by 7% to $3.06 per share majorly because of segment operating margin performance.

• EMCOR Group has reported a strong start to 2024 in its recent first-quarter earnings call, driven by the performance in its Electrical and Mechanical Construction segments.
• Key figures include an 18.7% increase in revenues to $3.43 billion driven mainly by organic growth.
• The Remaining Performance Obligations (RPO) grew by 16.5% to $9.2 billion.

• In this insight we show drivers of LalaTech’s +US$1bn turnaround in OpInc
• We also evaluate which drivers are likely to generate future improvements
• Lalatech won’t repeat incredible 2021-23 CoR, OpEx performances, in our view

• Komatsu’s operating profits for FY3/24 of Y607 billion (+24% YoY) surpassed estimates on strong U.S. equipment sales
• Komatsu guides for FY3/25 operating profits of ¥557 billion (-8.3% YoY), assuming ¥140/US$
• We believe that the market remains too focused on the near-term growth slowdown, while we believe that Komatsu is attractively priced at under 10x EV/EBIT

• On 3 May, it was reported that Hankook Tire & Technology agreed to purchase a 25% in Hanon Systems for 1.37 trillion won from Hahn & Co private equity firm. 
• After this deal, Hankook Tire & Technology will own a controlling 50.5% stake in Hanon Systems.
• We have a negative view on Hankook Tire & Technology’s additional purchase of Hanon Systems, which has experienced a declining profit margins in the past several years.

• HD Hyundai Marine Solution (443060 KS) had raised around US$539m in its Korean IPO, after pricing the deal at the top end of KRW83,400/share.
• HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
• In this note, we will talk about the demand for the deal and other trading dynamics.

Adani Ports and Special Economic Zone (APSEZ) has released FY 2023-24 numbers that were slightly above expectations. The company’s strong revenue and EBITDA growth (of 28% and 24% y-o-y, respectively) exceeded management’s guidance, supported by higher than estimated growth in cargo volumes. APSEZ appears poised to achieve its target of 500 MMT cargo volumes in 2025, supported by organic growth and the contribution from its latest acquisition (Gopalpur Port). Net adjusted leverage improved to 2.9x (FY 2022-23: 4.0x). We expect leverage to be stable in FY 2024-25, in line with management’s guidance.

APSEZ appears to have a renewed appetite for expansion (particularly in overseas markets, amid its already strong domestic position), which may present event risks. In the meantime, the company may remain affected by negative headlines related to corporate governance issues at the broader Adani Group.

• TAL Education Group showcased a strong financial performance in the fiscal fourth quarter and full fiscal year of 2024.
• The group’s Learning Services and Content Solutions segments demonstrated growth, driven by focused product development and a broadening customer base.
• The Learning Services sector saw continuous growth, supported by the expansion of learning centers and increased enrollment.

• W.W. Grainger Inc. started 2024 positively, with Q1 sales up by 3.5% (or 4.9% on a daily organic constant currency basis), gaining contributions from both High-Touch Solutions and Endless Assortment business segments.
• One highlight was the successful Grainger Show in Orlando, which saw over 10,000 of their customers, suppliers, and team members gathering to showcase the company’s offering.
• The event was fruitful, yielding positive feedback due to the partnerships formed and customer problems solved.

• In the first quarter 2024 earnings, Dover Corporation showed promising results.
• The quarter’s results were consistent with expectations, despite initial concerns that it might be the most challenging quarter.
• Counter cyclical portfolios were offset by a strong performance in end markets along with improving order and shipment trends in biopharma components and growth platforms.

• L3Harris Technologies, a leading provider of national security solutions, reported strong key performance metrics in the Q1 2024 with an industry-leading margin expansion of 80 basis points to 15.1%.
• This has fueled an upbeat full-year 2024 margin, EPS, and revenue guidance.
• The operating income went up by $150 million, boosting EPS by 7% to $3.06 per share majorly because of segment operating margin performance.

• EMCOR Group has reported a strong start to 2024 in its recent first-quarter earnings call, driven by the performance in its Electrical and Mechanical Construction segments.
• Key figures include an 18.7% increase in revenues to $3.43 billion driven mainly by organic growth.
• The Remaining Performance Obligations (RPO) grew by 16.5% to $9.2 billion.

• ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has launched an IPO to raise up to US$368 million.  
• We previously discussed the IPO in ZEEKR IPO: The Bull Case, ZEEKR IPO: The Bear Case and ZEEKR IPO: Latest Updates as the IPO Process Restarts. 
• The IPO price range values ZEEKR at a material discount to peers’ multiples. We would be inclined to participate in the IPO. 

• The review period for the June rebalance is complete and we expect 11 changes to the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 
• We estimate one-way turnover of 1.4% at the rebalance leading to a one-way trade of CNY 8.82bn (US$1.22bn). There are a lot of stocks with multiple days ADV to trade.
• The potential deletes have bounced off their lows as the market has recovered. But the potential passive selling could see them underperform over the next month.

• 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 2.3bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought CATL, Shenzhen Mindray, some financials.
• As outperformed Hs on Monday and Tuesday (when both were open), then Hs rocketed on Thursday and Friday. As will have to catch up early in the week.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, a number of deals were launched in India, while HD Hyundai Marine Solution (443060 KS) will list in the coming week.
• On the placement front, the two deals in Australia, WorleyParsons Ltd (WOR AU) and Endeavour Group /Australia (EDV AU) delivered opposing results.

• Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe.
• The company released an update on Q1 performance (note: FLC has a December balance date), that clearly validates the change in group strategy away from large construction and engineering projects, and towards smaller, higher margin, proprietary solutions, with a clear push into North America.
• The company has maintained full year guidance of US$90m-$100m of revenue and EBITDA of US$3.5m-$4.0m, a positive turnaround from the EBITDA breakeven position of FY23.

• ZEEKR (ZK US), a premium Chinese BEV manufacturer and a subsidiary of Geely Auto (175 HK), has launched an IPO to raise up to US$368 million.  
• We previously discussed the IPO in ZEEKR IPO: The Bull Case, ZEEKR IPO: The Bear Case and ZEEKR IPO: Latest Updates as the IPO Process Restarts. 
• The IPO price range values ZEEKR at a material discount to peers’ multiples. We would be inclined to participate in the IPO. 

• The review period for the June rebalance is complete and we expect 11 changes to the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 
• We estimate one-way turnover of 1.4% at the rebalance leading to a one-way trade of CNY 8.82bn (US$1.22bn). There are a lot of stocks with multiple days ADV to trade.
• The potential deletes have bounced off their lows as the market has recovered. But the potential passive selling could see them underperform over the next month.

• 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 2.3bn of A-shares on high gross low net volume in the two days. NORTHBOUND bought CATL, Shenzhen Mindray, some financials.
• As outperformed Hs on Monday and Tuesday (when both were open), then Hs rocketed on Thursday and Friday. As will have to catch up early in the week.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, a number of deals were launched in India, while HD Hyundai Marine Solution (443060 KS) will list in the coming week.
• On the placement front, the two deals in Australia, WorleyParsons Ltd (WOR AU) and Endeavour Group /Australia (EDV AU) delivered opposing results.

• Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe.
• The company released an update on Q1 performance (note: FLC has a December balance date), that clearly validates the change in group strategy away from large construction and engineering projects, and towards smaller, higher margin, proprietary solutions, with a clear push into North America.
• The company has maintained full year guidance of US$90m-$100m of revenue and EBITDA of US$3.5m-$4.0m, a positive turnaround from the EBITDA breakeven position of FY23.