Industrials

• Grandblue Environment Co A (600323 CH) disclosed a potential pre-conditional privatisation of Canvest Environmental Protection Group (1381 HK) at HK$4.90 per share, a 20.7% premium to the last close price. 
• Completing the capital injection from SOE entities into the offeror is a precondition. Grandblue also proposes that the controlling shareholder roll over 7.23% of its effective 44.75% stake. 
• While not a knockout bid, the offer is reasonable. Shareholders with blocking stakes should support a binding proposal. Timing is the key risk. 

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
• We previously discussed the IPO in Timee (215A JP) IPO: The Bull Case and Timee (215A JP) IPO: The Bear Case. 
• In this note, we discuss valuation. Our analysis suggests that Timee is attractively valued at the IPO price range in the context of the forecasted growth. 

• Timee Inc (215A JP) is looking to raise US$290m in its Japan IPO. The IPO will be a 100% secondary selldown by existing shareholders.
• Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
• In an earlier note, we looked at the firm’s past performance and peer comparison. In this note, we discuss our thoughts on valuation.

• 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 SELL RMB 13.9bn of A-shares. NORTHBOUND bought utilities and raw materials and sold everything else, especially consumer names. Appliances remain on the sell side.
• 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, not bought.

• The review period for the September rebalance ends 30 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
• We forecast 6 changes for the index, including migrations between the STAR 100 Index and the SSE STAR50 (STAR50 INDEX).
• Excluding the migrations, the potential adds have outperformed the potential deletes since the start of the calendar year and there could be further outperformance over the next few weeks.

• Operations are on track with earlier guidance given during FY23 results, loads and yields are healthy, with UK and North American performing better than expected  
• Will buyback and cancel remaining 97.7m preference shares for a sum of HKD10b by end of July 2024. Shareholder dilution has been avoided  
• Cathay Pacific is a value BUY, our target price of HK$9.90 (+24% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP) 

• Shenzhen Yuejiang Technology (Dobot), a China-based cobot company, filed for a Hong Kong IPO. Cobots are robots with operational robotic arms intended for collaboration within a shared space.
• Dobot was backed by CICC, CRRC VC, Greenpine Growth, Qianhai Equity, and China Internet Investment Fund, among others. The company was founded in 2015 in Shenzhen, PRC.
• The offering may attract significant investor interest after South Korea’s robotics company Doosan Robotics could raise ~$318M in October 2023.

• We believe SF’s core express margins are higher than most of its peers’ margins
• But on 2023 EV / EBITDA SF trades at multiples below most Chinese, US peers
• One objective of SF listing in HK is to attract global investors, lift valuation

• Grandblue Environment Co A (600323 CH) disclosed a potential pre-conditional privatisation of Canvest Environmental Protection Group (1381 HK) at HK$4.90 per share, a 20.7% premium to the last close price. 
• Completing the capital injection from SOE entities into the offeror is a precondition. Grandblue also proposes that the controlling shareholder roll over 7.23% of its effective 44.75% stake. 
• While not a knockout bid, the offer is reasonable. Shareholders with blocking stakes should support a binding proposal. Timing is the key risk. 

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
• We previously discussed the IPO in Timee (215A JP) IPO: The Bull Case and Timee (215A JP) IPO: The Bear Case. 
• In this note, we discuss valuation. Our analysis suggests that Timee is attractively valued at the IPO price range in the context of the forecasted growth. 

• Timee Inc (215A JP) is looking to raise US$290m in its Japan IPO. The IPO will be a 100% secondary selldown by existing shareholders.
• Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
• In an earlier note, we looked at the firm’s past performance and peer comparison. In this note, we discuss our thoughts on valuation.

• 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 SELL RMB 13.9bn of A-shares. NORTHBOUND bought utilities and raw materials and sold everything else, especially consumer names. Appliances remain on the sell side.
• 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, not bought.

• The review period for the September rebalance ends 30 July. We expect the changes to be announced 30 August with the implementation taking place after the close on 13 September.
• We forecast 6 changes for the index, including migrations between the STAR 100 Index and the SSE STAR50 (STAR50 INDEX).
• Excluding the migrations, the potential adds have outperformed the potential deletes since the start of the calendar year and there could be further outperformance over the next few weeks.

• Operations are on track with earlier guidance given during FY23 results, loads and yields are healthy, with UK and North American performing better than expected  
• Will buyback and cancel remaining 97.7m preference shares for a sum of HKD10b by end of July 2024. Shareholder dilution has been avoided  
• Cathay Pacific is a value BUY, our target price of HK$9.90 (+24% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP) 

• Shenzhen Yuejiang Technology (Dobot), a China-based cobot company, filed for a Hong Kong IPO. Cobots are robots with operational robotic arms intended for collaboration within a shared space.
• Dobot was backed by CICC, CRRC VC, Greenpine Growth, Qianhai Equity, and China Internet Investment Fund, among others. The company was founded in 2015 in Shenzhen, PRC.
• The offering may attract significant investor interest after South Korea’s robotics company Doosan Robotics could raise ~$318M in October 2023.

• We believe SF’s core express margins are higher than most of its peers’ margins
• But on 2023 EV / EBITDA SF trades at multiples below most Chinese, US peers
• One objective of SF listing in HK is to attract global investors, lift valuation

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In mid-June 2024, we had two expected ADDs and DELs for the September 2024 index rebal event and they remain unchanged even after the end of the reference period.
• However, our capping flow expectations continue to change as the pro-forma post-rebalance weights change with share prices. In this insight, we have provided our latest flow estimates.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In mid-June 2024, we had two expected ADDs and DELs for the September 2024 index rebal event and they remain unchanged even after the end of the reference period.
• However, our capping flow expectations continue to change as the pro-forma post-rebalance weights change with share prices. In this insight, we have provided our latest flow estimates.

• On 20 May, I wrote that Japanese activist MURAKAMI Yoshiaki and relations/affiliates had gone from 5% to 20% of Mitsui Matsushima (1518 JP) in 5 trading days.
• I wondered if it was real, or a pump & dump, but they went to near 30% in following days. THEN they drifted off as Murakami-Fille sold while Murakami-Père bought. 
• The reasoning was not clear, but the story had real potential. Still does. Today, shareholders got more good news. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight include: J&T Global Express (1519 HK), Flat Glass (6865 HK), Lifetech Scientific (1302 HK), and PCCW Ltd (8 HK).

• On 5 July, Hanwha Energy announced a tender offer of 8% stake in Hanwha Corporation (000880 KS) worth 180 billion won.
• The tender offer price is 30,000 won. Hanwha Energy will launch a tender offer for up to 6 million shares of Hanwha Corp, representing 8% of outstanding shares. 
• Hanwha Corp’s 34% stake in Hanwha Aerospace which is worth 4.2 trillion won. (191% of Hanwha Corp’s market cap). 

• Old Dominion Freight Line, a major freight carrier company, recently released its first quarter 2024 which reflected a challenging economic environment but also highlighted areas of growth.
• Despite the continued softness in the domestic economy, Old Dominion was able to report modest year over-year increases in revenue and earnings per diluted share for two consecutive quarters.
• Its Q1 2024 earnings per diluted share of $1.34 signifies a new company record for this period.

• On 20 May, I wrote that Japanese activist MURAKAMI Yoshiaki and relations/affiliates had gone from 5% to 20% of Mitsui Matsushima (1518 JP) in 5 trading days.
• I wondered if it was real, or a pump & dump, but they went to near 30% in following days. THEN they drifted off as Murakami-Fille sold while Murakami-Père bought. 
• The reasoning was not clear, but the story had real potential. Still does. Today, shareholders got more good news. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight include: J&T Global Express (1519 HK), Flat Glass (6865 HK), Lifetech Scientific (1302 HK), and PCCW Ltd (8 HK).

• On 5 July, Hanwha Energy announced a tender offer of 8% stake in Hanwha Corporation (000880 KS) worth 180 billion won.
• The tender offer price is 30,000 won. Hanwha Energy will launch a tender offer for up to 6 million shares of Hanwha Corp, representing 8% of outstanding shares. 
• Hanwha Corp’s 34% stake in Hanwha Aerospace which is worth 4.2 trillion won. (191% of Hanwha Corp’s market cap). 

• Old Dominion Freight Line, a major freight carrier company, recently released its first quarter 2024 which reflected a challenging economic environment but also highlighted areas of growth.
• Despite the continued softness in the domestic economy, Old Dominion was able to report modest year over-year increases in revenue and earnings per diluted share for two consecutive quarters.
• Its Q1 2024 earnings per diluted share of $1.34 signifies a new company record for this period.

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
• In Timee (215A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on rapidly slowing growth, an industry-low FCF profile, and a business model predicated on access to large funding and significant share option dilution.

• On 4 July, NPS disclosed the details of the ownership changes for 112 listed companies in Korea, of which 87 were listed in KOSPI and 25 in KOSDAQ. 
• In 2Q 2024, the NPS reduced its investments in defense and military stocks and increased investments in cosmetics, shipbuilding, and food companies in Korea.
• NPS reduced its capital allocation to the military & defense sector. NPS reduced its stake in LIG Nex1 (-2.32%), Poongsan Corp (-2.24%), and Hanwha Aerospace (-1.02%). 

• Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) is an industrial equipment–related trading company with a history that goes back more than a century.
• While primarily handling power transmission products, such as motors and chains, the Company also handles factory automation (FA) equipment, including conveyors for automobiles and liquid crystals.
• Furthermore, the Company is expanding into other industrial equipment parts, including actuators, such as cylinders, for semiconductor-manufacturing equipment, and conveyor equipment in factories, inspection equipment, and various types of meters. 

• Takamiya (hereafter, the Company) announced its FY24/3 full-year earnings results on Friday, May 10, 2024 after the market closed.
• Sales, operating profit, and net profit were below its initial estimates, except for ordinary profit.
• However, a significant increase in profits were achieved thanks to the strong performance of its high-margin rental business.

• UFP Industries Inc. has presented its Q1 2024 earnings, showcasing a resilient yet moderately challenged financial and operational landscape.
• The company reported net sales of $1.64 billion, a decrease driven by diminished demand and lower lumber market levels, alongside a net earnings per share of $1.96, which fortunately exceeded expectations due to a nonrecurring tax benefit.
• Despite the fall in net sales, the consistency in earnings per share beyond projections is commendable and highlights the company’s effective management and strategic financial controls.

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
• In Timee (215A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on rapidly slowing growth, an industry-low FCF profile, and a business model predicated on access to large funding and significant share option dilution.

• On 4 July, NPS disclosed the details of the ownership changes for 112 listed companies in Korea, of which 87 were listed in KOSPI and 25 in KOSDAQ. 
• In 2Q 2024, the NPS reduced its investments in defense and military stocks and increased investments in cosmetics, shipbuilding, and food companies in Korea.
• NPS reduced its capital allocation to the military & defense sector. NPS reduced its stake in LIG Nex1 (-2.32%), Poongsan Corp (-2.24%), and Hanwha Aerospace (-1.02%). 

• Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) is an industrial equipment–related trading company with a history that goes back more than a century.
• While primarily handling power transmission products, such as motors and chains, the Company also handles factory automation (FA) equipment, including conveyors for automobiles and liquid crystals.
• Furthermore, the Company is expanding into other industrial equipment parts, including actuators, such as cylinders, for semiconductor-manufacturing equipment, and conveyor equipment in factories, inspection equipment, and various types of meters. 

• Takamiya (hereafter, the Company) announced its FY24/3 full-year earnings results on Friday, May 10, 2024 after the market closed.
• Sales, operating profit, and net profit were below its initial estimates, except for ordinary profit.
• However, a significant increase in profits were achieved thanks to the strong performance of its high-margin rental business.

• UFP Industries Inc. has presented its Q1 2024 earnings, showcasing a resilient yet moderately challenged financial and operational landscape.
• The company reported net sales of $1.64 billion, a decrease driven by diminished demand and lower lumber market levels, alongside a net earnings per share of $1.96, which fortunately exceeded expectations due to a nonrecurring tax benefit.
• Despite the fall in net sales, the consistency in earnings per share beyond projections is commendable and highlights the company’s effective management and strategic financial controls.

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.   
• Timee’s app allows users to work shifts as short as one hour at restaurants, convenience stores, and hotels, with quick payment for their work.   
• The bull case rests on favourable market trends, best-in-class revenue growth, good retention rates, credible growth drivers, and top-quartile EBITDA margins.

• Mineral Resources is a founder-led diversified infrastructure and mining business that has seen significant growth since its IPO.
• The business is divided into two segments, with the infrastructure business, “Infraco,” playing a crucial role in the company’s success.
• The company’s CEO believes they are just getting started and can grow to many multiples of their current size.

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

• The rally in Yangzijiang Shipbuilding (YZJSGD SP) over the last month should result in the stock being added to global passive portfolios late next month.
• Yangzijiang Shipbuilding (YZJSGD SP) trades cheaper than peers on forward PE but there has been a big rally in the stock over the last month.
• There has been an increase in cumulative excess volume since mid-May and there will be positioning for the event, but there could be further gains in the stock.

• Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.   
• Timee’s app allows users to work shifts as short as one hour at restaurants, convenience stores, and hotels, with quick payment for their work.   
• The bull case rests on favourable market trends, best-in-class revenue growth, good retention rates, credible growth drivers, and top-quartile EBITDA margins.

• Mineral Resources is a founder-led diversified infrastructure and mining business that has seen significant growth since its IPO.
• The business is divided into two segments, with the infrastructure business, “Infraco,” playing a crucial role in the company’s success.
• The company’s CEO believes they are just getting started and can grow to many multiples of their current size.

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

• The rally in Yangzijiang Shipbuilding (YZJSGD SP) over the last month should result in the stock being added to global passive portfolios late next month.
• Yangzijiang Shipbuilding (YZJSGD SP) trades cheaper than peers on forward PE but there has been a big rally in the stock over the last month.
• There has been an increase in cumulative excess volume since mid-May and there will be positioning for the event, but there could be further gains in the stock.