Industrials

• Tuhu Car (9690 HK) was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.
• Tuhu is an integrated online and offline platform for automotive services in China.
• Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, >90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.

• The number of risk-on signals continues to grow, while risk-off signals remain virtually non-existent. We will be sure to point it out when this dynamic starts to change
• In the meantime, we want to continue riding this bull market higher, and our bullish outlook on the S&P 500, Russell 2000, and Nasdaq 100 (since early-November 2023) remains intact.
• Gold is breaking out of a 3.5-year base to all-time closing highs — buy. Silver is breaking out above a 3-month base at $23.50. Fueled by toppy DXY and rates

• Tuhu Car (9690 HK) was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.
• Tuhu is an integrated online and offline platform for automotive services in China.
• Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, >90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.

• The number of risk-on signals continues to grow, while risk-off signals remain virtually non-existent. We will be sure to point it out when this dynamic starts to change
• In the meantime, we want to continue riding this bull market higher, and our bullish outlook on the S&P 500, Russell 2000, and Nasdaq 100 (since early-November 2023) remains intact.
• Gold is breaking out of a 3.5-year base to all-time closing highs — buy. Silver is breaking out above a 3-month base at $23.50. Fueled by toppy DXY and rates

• Sanyo Trading (3176 JP) is a small specialised trading company (rubber, polymers, elastomers, etc). Niche, decent profitability/margins, highish ROE.
• Banks in the MUFG and SMBC family are selling. Norinchukin is selling a bit too. 
• This is small in size but big in impact. 20% of Max RWF. 50d ADV. Unlike other recent, larger, offerings, this has no flow mitigants. But it’s cheap.

• China is focusing on dominating the export market for light vehicles, yellow machinery, mining equipment, and wheeled equipment transported on Ro-Ro vessels
• Chinese manufacturers are flooding the market with goods and using government subsidies to increase exports
• Shortage of global seaborne transport capacity is the main obstacle, driving Ro-Ro rates to extreme levels, but Chinese exporters are eager to expand their market share.

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.

• Takamiya announced its 3Q FY24/3 consolidated sales of ¥32,183 mn (+4.9% YoY), operating profit of ¥2,405 mn (+49.7% YoY), ordinary profit of ¥2,526 mn (+46.5% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥1,727 mn (+46.9% YoY).
• All the segments, sales business, rental business and overseas business, posted an increase in operating profit YoY.
• Especially, rental business became a driving force of the expansion of the whole business. 

• Sanyo Trading (3176 JP) is a small specialised trading company (rubber, polymers, elastomers, etc). Niche, decent profitability/margins, highish ROE.
• Banks in the MUFG and SMBC family are selling. Norinchukin is selling a bit too. 
• This is small in size but big in impact. 20% of Max RWF. 50d ADV. Unlike other recent, larger, offerings, this has no flow mitigants. But it’s cheap.

• China is focusing on dominating the export market for light vehicles, yellow machinery, mining equipment, and wheeled equipment transported on Ro-Ro vessels
• Chinese manufacturers are flooding the market with goods and using government subsidies to increase exports
• Shortage of global seaborne transport capacity is the main obstacle, driving Ro-Ro rates to extreme levels, but Chinese exporters are eager to expand their market share.

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.

• Takamiya announced its 3Q FY24/3 consolidated sales of ¥32,183 mn (+4.9% YoY), operating profit of ¥2,405 mn (+49.7% YoY), ordinary profit of ¥2,526 mn (+46.5% YoY), and profit attributable to owners of parent (hereafter, net profit) of ¥1,727 mn (+46.9% YoY).
• All the segments, sales business, rental business and overseas business, posted an increase in operating profit YoY.
• Especially, rental business became a driving force of the expansion of the whole business. 

• On Friday after the close, the S&P DJI Index Committee announced changes to the S&P 100, S&P500, S&P MidCap400, and S&P SmallCap600. Changes happen at the close 15 March 2024.
• Super Micro Computer (SMCI US) and Deckers Outdoor (DECK US) replace Zions Bancorporation (ZION US) and Whirlpool Corp (WHR US) in the S&P500. 2 changes to 400, 6 to 600.
• The immediate reaction was to send SMCI up 12.5%. That’s shortsighted. It pays to count the pennies involved. There are a LOT of pennies.

• The index changes for the March 2024 index rebal event for the T50/100 index family and the TDIV index were confirmed after market close on Friday 1st March 2024.
• The confirmed changes for T50 and T100 were captured in our expectations but an additional change we expected did not materialize which adversely affected our flow expectations for March 2024.
• In this insight, we take a close look at the breakdown of our final flow expectations for the upcoming Inclusion/Exclusion and Capping events.

• 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 23.5bn of A-shares on strong average activity after RMB +49bn the previous four trading weeks. More efforts by authorities to eliminate selling.
• No finance names of any kind in the top ten this week after 5/10 the week before. Slight tendencies to trade on reversion.

• A group of shareholders are looking to raise US$220m from selling their stakes in Nippon Express Holdings (9147 JP).
• Overall, the deal would be a relatively large one to digest at 11 days of Nippon Express’ three month ADV, and 4.8% of the firm’s total shares outstanding.
• Together with the announcement, the firm has also guided towards a share buyback program which should provide some share price support a month post-deal,  in our view.

• CIMC Vehicles Group (301039 CH) (CIMCV) is a leading global manufacturer of semi-trailers and various truck bodies that is the mainstay of heavy ground goods transport  
• 9M23 earnings surged by 216% and beat consensus, scope for further earnings upgrade as the business and management outlook statement is very positive   
• Our target price of CNY12.50 (+31% UPSIDE) is based on 2024 PE 15x – a 10% discount against the industry leader Caterpillar 

Key points

• Ritchie Brothers has faced challenges such as contentious acquisition, activist involvement, dilutive financing, and firing of key executives
• Despite these challenges, the company’s profitability has been improving significantly
• Author believes RB Global’s earnings power will continue to grow, potentially reaching $5 per share by 2025, presenting a favorable comparison to the current share price in the $60s

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.

• On Friday after the close, the S&P DJI Index Committee announced changes to the S&P 100, S&P500, S&P MidCap400, and S&P SmallCap600. Changes happen at the close 15 March 2024.
• Super Micro Computer (SMCI US) and Deckers Outdoor (DECK US) replace Zions Bancorporation (ZION US) and Whirlpool Corp (WHR US) in the S&P500. 2 changes to 400, 6 to 600.
• The immediate reaction was to send SMCI up 12.5%. That’s shortsighted. It pays to count the pennies involved. There are a LOT of pennies.

• The index changes for the March 2024 index rebal event for the T50/100 index family and the TDIV index were confirmed after market close on Friday 1st March 2024.
• The confirmed changes for T50 and T100 were captured in our expectations but an additional change we expected did not materialize which adversely affected our flow expectations for March 2024.
• In this insight, we take a close look at the breakdown of our final flow expectations for the upcoming Inclusion/Exclusion and Capping events.

• 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 23.5bn of A-shares on strong average activity after RMB +49bn the previous four trading weeks. More efforts by authorities to eliminate selling.
• No finance names of any kind in the top ten this week after 5/10 the week before. Slight tendencies to trade on reversion.

• A group of shareholders are looking to raise US$220m from selling their stakes in Nippon Express Holdings (9147 JP).
• Overall, the deal would be a relatively large one to digest at 11 days of Nippon Express’ three month ADV, and 4.8% of the firm’s total shares outstanding.
• Together with the announcement, the firm has also guided towards a share buyback program which should provide some share price support a month post-deal,  in our view.

• CIMC Vehicles Group (301039 CH) (CIMCV) is a leading global manufacturer of semi-trailers and various truck bodies that is the mainstay of heavy ground goods transport  
• 9M23 earnings surged by 216% and beat consensus, scope for further earnings upgrade as the business and management outlook statement is very positive   
• Our target price of CNY12.50 (+31% UPSIDE) is based on 2024 PE 15x – a 10% discount against the industry leader Caterpillar 

Key points

• Ritchie Brothers has faced challenges such as contentious acquisition, activist involvement, dilutive financing, and firing of key executives
• Despite these challenges, the company’s profitability has been improving significantly
• Author believes RB Global’s earnings power will continue to grow, potentially reaching $5 per share by 2025, presenting a favorable comparison to the current share price in the $60s

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.

• Apart from being mildly EPS accretive, Keisei Electric Railway Co (9009 JP)‘s buyback is a means to get crossholders out, therefore, it may not have much direct market impact. 
• Cie De Saint-Gobain (SGO FP) firms a decade-high-plus Offer price for CSR Ltd (CSR AU) – this is done.
• Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue “Bond-Type Class Shares.” First reaction: You wot, mate?

• Nippon Express Holdings (9147 JP) has announced a secondary offering of up to 4.8 million shares (including overallotment). There are seven selling shareholders.
• The secondary offering comes ahead of the implementation of regulatory restrictions on truck drivers’ overtime in April 2024, which is widely known as the ‘2024 Problem’.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 11 and 13 March (likely 11 March).

• Apart from being mildly EPS accretive, Keisei Electric Railway Co (9009 JP)‘s buyback is a means to get crossholders out, therefore, it may not have much direct market impact. 
• Cie De Saint-Gobain (SGO FP) firms a decade-high-plus Offer price for CSR Ltd (CSR AU) – this is done.
• Rakuten Group (4755 JP) announced it would propose an amendment to its Articles at the AGM (28 March) to issue “Bond-Type Class Shares.” First reaction: You wot, mate?

• Nippon Express Holdings (9147 JP) has announced a secondary offering of up to 4.8 million shares (including overallotment). There are seven selling shareholders.
• The secondary offering comes ahead of the implementation of regulatory restrictions on truck drivers’ overtime in April 2024, which is widely known as the ‘2024 Problem’.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 11 and 13 March (likely 11 March).

• Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
• Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
• NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

• Copart, Inc, a leading provider of online vehicle auctions, recently disclosed its second-quarter financial results for the fiscal year 2024.
• The recorded statements offered valuable insights into the company’s operational and financial advancements during the period.
• In the insurance business, the company reported profitable growth despite slight disturbances in the comparison metrics, primarily caused by significant catastrophic events in the previous year, including Hurricane Ian.

• The fourth quarter results from TRS were not up to our expectations after a recovery in packaging was subdued by an unexpected significant decline in the specialty business
• The specialty business has been a source of sales growth for the past nearly three years without any sign of slowing down until Q4. 
• TRS reported fourth quarter sales of $209.6 million compared to our forecast of $247.4 million. The biggest delta was from specialty where sales missed our estimate by $26 million

• Quanta Services, Inc., a provider of specialized contracting services, reported fourth-quarter and full-year results for 2023 reflecting double-digit growth in revenues and earnings, pointing to robust demand and solid execution.
• Total year-end backlog was $30.1 billion, indicative of the company’s enduring client relationships and momentum entering 2024.
• Record revenue was achieved 6 out of the last 7 years along with 6 consecutive years of record-adjusted EBITDA and 7 years of continuous record-adjusted earnings per share, aided by Quanta’s operational and financial platform backed by over 50,000 dedicated employees.

• Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
• Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
• NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

• Copart, Inc, a leading provider of online vehicle auctions, recently disclosed its second-quarter financial results for the fiscal year 2024.
• The recorded statements offered valuable insights into the company’s operational and financial advancements during the period.
• In the insurance business, the company reported profitable growth despite slight disturbances in the comparison metrics, primarily caused by significant catastrophic events in the previous year, including Hurricane Ian.

• The fourth quarter results from TRS were not up to our expectations after a recovery in packaging was subdued by an unexpected significant decline in the specialty business
• The specialty business has been a source of sales growth for the past nearly three years without any sign of slowing down until Q4. 
• TRS reported fourth quarter sales of $209.6 million compared to our forecast of $247.4 million. The biggest delta was from specialty where sales missed our estimate by $26 million

• Quanta Services, Inc., a provider of specialized contracting services, reported fourth-quarter and full-year results for 2023 reflecting double-digit growth in revenues and earnings, pointing to robust demand and solid execution.
• Total year-end backlog was $30.1 billion, indicative of the company’s enduring client relationships and momentum entering 2024.
• Record revenue was achieved 6 out of the last 7 years along with 6 consecutive years of record-adjusted EBITDA and 7 years of continuous record-adjusted earnings per share, aided by Quanta’s operational and financial platform backed by over 50,000 dedicated employees.