Industrials

• Last year with earnings, Ushio Inc (6925 JP) announced a HUUUGE buyback discussed in  HUUUGE Ushio (6925) Buyback. The headline was 17% of shares out. They ended up buying 13.2%. 
• Last year the stock popped on the news. Then shares went sideways for months. Then they went up on stable (bad) earnings guidance in H2. Today they beat Q3-updated guidance.
• But today they announced a “new growth strategy” to 2030, and guided to a SHARP (-60%) drop in OP and NP to March 2025, and announced a HUUUGE Buyback. Again.

• Grab‘s focus last year was offering more affordable products, which helped to increase its addressable market. FY2024 will see the rollout of a broader range of initiatives across economic segments. 
• This year Grab is rolling out more premium offerings and new initiatives, including advance bookings, family accounts, increased reviews, and new merchant features to grow revenue streams from advertising.
• The upcoming results are likely to reflect seasonal factors but should also reveal something about Grab’s new initiatives and the changing competitive environment, with GoTo investing more aggressively. 

• Back in June 2022, US/Europe toll-road play Atlas Arteria (ALX AU) (ATLIX) rejected IFM Global Infrastructure’s request for limited company information, before deciding whether to submit a non-binding indicative proposal. 
• Undeterred, IFM, which held 15% of shares out at the time, bumped its stake to 19% two months later; and has continued to capitalise on Australia’s creep provisions ever since. 
• This morning, IFM is understood to have lifted its stake to ~26.5%, in an apparent attempt to gain additional board representation. Another tilt cannot be ruled out. 

• An uplift in China orders – Q1 FY12/24 results saw a continued decline in sales by 7.4% YoY and 9.3% QoQ.
• However, the core Machine Tools segment saw flat sales QoQ, and order visibility improved with China orders rising by 39.4% QoQ albeit from a low base.
• Cost reduction efforts have commenced and are set to accelerate into Q2 FY12/24 which should improve the scope for profitability, although ultimately this will be sales volume dependent. 

• Management has indicated that the pipeline for new leases, renewals is robust as ICE & multiple government entities seek capacity.
• Company is engaged in multiple discussions.
• In addition, the recent debt issuance extended maturities & CXW was able to maintain the cost of capital despite the uncertain rate, economic outlook.

• Last year with earnings, Ushio Inc (6925 JP) announced a HUUUGE buyback discussed in  HUUUGE Ushio (6925) Buyback. The headline was 17% of shares out. They ended up buying 13.2%. 
• Last year the stock popped on the news. Then shares went sideways for months. Then they went up on stable (bad) earnings guidance in H2. Today they beat Q3-updated guidance.
• But today they announced a “new growth strategy” to 2030, and guided to a SHARP (-60%) drop in OP and NP to March 2025, and announced a HUUUGE Buyback. Again.

• Grab‘s focus last year was offering more affordable products, which helped to increase its addressable market. FY2024 will see the rollout of a broader range of initiatives across economic segments. 
• This year Grab is rolling out more premium offerings and new initiatives, including advance bookings, family accounts, increased reviews, and new merchant features to grow revenue streams from advertising.
• The upcoming results are likely to reflect seasonal factors but should also reveal something about Grab’s new initiatives and the changing competitive environment, with GoTo investing more aggressively. 

• Back in June 2022, US/Europe toll-road play Atlas Arteria (ALX AU) (ATLIX) rejected IFM Global Infrastructure’s request for limited company information, before deciding whether to submit a non-binding indicative proposal. 
• Undeterred, IFM, which held 15% of shares out at the time, bumped its stake to 19% two months later; and has continued to capitalise on Australia’s creep provisions ever since. 
• This morning, IFM is understood to have lifted its stake to ~26.5%, in an apparent attempt to gain additional board representation. Another tilt cannot be ruled out. 

• An uplift in China orders – Q1 FY12/24 results saw a continued decline in sales by 7.4% YoY and 9.3% QoQ.
• However, the core Machine Tools segment saw flat sales QoQ, and order visibility improved with China orders rising by 39.4% QoQ albeit from a low base.
• Cost reduction efforts have commenced and are set to accelerate into Q2 FY12/24 which should improve the scope for profitability, although ultimately this will be sales volume dependent. 

• Management has indicated that the pipeline for new leases, renewals is robust as ICE & multiple government entities seek capacity.
• Company is engaged in multiple discussions.
• In addition, the recent debt issuance extended maturities & CXW was able to maintain the cost of capital despite the uncertain rate, economic outlook.

• Toppan Printing (7911 JP) established a new Medium-Term Management Plan with targets in May 2023. 8% ROE, PBR >1.0x. More DX business. More management modernisation. More ESG. Mooooarrrrr!
• They also promised capital measures: ¥100bn of buybacks over three years. Total shareholder return of 50%+ over three years. More progress in selling down cross-holdings. 
• Today the company reported better-than expected full-year revenues, OP, and Net Profit, added more to the buybacks, and shortened the buyback period to two years. Details matter.

• Our base case valuation of Innospace is target price of 51,481 won per share (12 month view), which is 28% higher than the midpoint of the IPO valuation range.
• We estimate Innospace to generate sales of 1.8 billion won in 2024, 28.7 billion won in 2025, and 58.3 billion won in 2026.
• Innospace is involved in the satellite launch vehicle production and launch service business.

• FY Mar-24 results were ahead of guidance, but management’s FY Mar-25 forecast has sales flat and profits down in the second half.
• The shares have dropped back 24% from their all-time high, bringing the forward P/E ratio down to 22X.
• China and foundry remain strong while North America and memory pick up. Guidance is probably conservative. Buy into the weakness.

• Breton Technology (1884270D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
• Breton Technology is a clean energy solution provider in China, focusing on the design, development and commercialization of engineering machinery powered by new energy sources. 
• Such engineering machinery includes battery-electric loaders and wide-body dump trucks, each offering a variety of payload and battery capacities. 

• CBAK Energy Technology is poised to benefit from a sharp uptick in portable energy systems and home energy storage.
• Despite pricing pressures in the industry, CBAK’s strong relationships with key customers and solid safety record enabled has enabled it to retain pricing power which boosted battery margins significantly in the first quarter as raw material continued to fall.
• As investors begin to focus on the growing and profitable battery business, we believe there is substantial upside for the stock which is now trading at just over 3 times our 2024 EPS estimate.

• In the first quarter 2024, Verisk Analytics, Inc. reported solid performance with organic constant currency revenue growth of 6.9%, driven partially by broad-based subscription growth of 7.8% across most of its businesses.
• The result was aligned with guidance for 2024 and highlighted the company’s efforts to evolve into an integrated insurance-focused enterprise.
• CEO Lee Shavel stated that Verisk is driving predictable and consistent growth by partnering with the insurance ecosystem to address their major challenges.

• Late 90s/early 00’s had stock volatility based on undisclosed news, while recent market movements show stocks moving significantly without any news
• Example of stock Virco dropping 18% with no news and high trading volume, despite company having positive financial indicators
• Virco has small outstanding share count, manageable net debt, and attractive valuation multiples based on estimated future earnings

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.

• Toppan Printing (7911 JP) established a new Medium-Term Management Plan with targets in May 2023. 8% ROE, PBR >1.0x. More DX business. More management modernisation. More ESG. Mooooarrrrr!
• They also promised capital measures: ¥100bn of buybacks over three years. Total shareholder return of 50%+ over three years. More progress in selling down cross-holdings. 
• Today the company reported better-than expected full-year revenues, OP, and Net Profit, added more to the buybacks, and shortened the buyback period to two years. Details matter.

• Our base case valuation of Innospace is target price of 51,481 won per share (12 month view), which is 28% higher than the midpoint of the IPO valuation range.
• We estimate Innospace to generate sales of 1.8 billion won in 2024, 28.7 billion won in 2025, and 58.3 billion won in 2026.
• Innospace is involved in the satellite launch vehicle production and launch service business.

• FY Mar-24 results were ahead of guidance, but management’s FY Mar-25 forecast has sales flat and profits down in the second half.
• The shares have dropped back 24% from their all-time high, bringing the forward P/E ratio down to 22X.
• China and foundry remain strong while North America and memory pick up. Guidance is probably conservative. Buy into the weakness.

• Breton Technology (1884270D CH) is looking to raise up to US$200m in its upcoming HK IPO. The deal will be run by CICC and CMB International.
• Breton Technology is a clean energy solution provider in China, focusing on the design, development and commercialization of engineering machinery powered by new energy sources. 
• Such engineering machinery includes battery-electric loaders and wide-body dump trucks, each offering a variety of payload and battery capacities. 

• CBAK Energy Technology is poised to benefit from a sharp uptick in portable energy systems and home energy storage.
• Despite pricing pressures in the industry, CBAK’s strong relationships with key customers and solid safety record enabled has enabled it to retain pricing power which boosted battery margins significantly in the first quarter as raw material continued to fall.
• As investors begin to focus on the growing and profitable battery business, we believe there is substantial upside for the stock which is now trading at just over 3 times our 2024 EPS estimate.

• In the first quarter 2024, Verisk Analytics, Inc. reported solid performance with organic constant currency revenue growth of 6.9%, driven partially by broad-based subscription growth of 7.8% across most of its businesses.
• The result was aligned with guidance for 2024 and highlighted the company’s efforts to evolve into an integrated insurance-focused enterprise.
• CEO Lee Shavel stated that Verisk is driving predictable and consistent growth by partnering with the insurance ecosystem to address their major challenges.

• Late 90s/early 00’s had stock volatility based on undisclosed news, while recent market movements show stocks moving significantly without any news
• Example of stock Virco dropping 18% with no news and high trading volume, despite company having positive financial indicators
• Virco has small outstanding share count, manageable net debt, and attractive valuation multiples based on estimated future earnings

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.

• MHI was sold off last week as FY Mar-24 operating profit fell short of guidance and management guided for a decline in new orders this fiscal year.
• Orders momentum has peaked. Sales and profits will follow. But the latter are still rising and guidance could once again be conservative.
• Consolidation of the share price is likely to continue until orders and profit trends are confirmed.

• 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, after a stellar showing by HD Hyundai Marine Solution (443060 KS), the coming week will be a busy one for India listings.
• On the placement front, there were no major deals during the week. We did look at Asmedia Technology (5269 TT) planned GDR, and Wuxi XDC’s upcoming lockup expiry.

• China’s two national port companies China Merchants Port (144 HK) and Cosco Shipping Ports (1199 HK) have underperformed, but exports have picked up. We see an opportunity here.
• With a 9.2% increase in container throughput, CSPL even down by 4.8% YTD, underperformed CMPH by 12.9pp. There is room for it to catch up.
• CSPL is also cheaper at 7x and 6.3x PERs for the next two years, making it more attractive on a relative basis.

• 1H Results: On April 12, 2024, Paycloud Holdings Inc. announced its 2Q FY2024/8 earnings, its first earnings announcement since becoming a holding company and changing its name on March 1, 2024.
• In 1H FY2024/8, the company reported net sales of ¥1,990 mn, adjusted EBITDA of ¥226 mn, and operating profit of ¥86 mn. It had an irregular 5-month accounting period in 1Q FY2023/8 that included the July-August 2022 earnings following a change in the accounting period of the former Valuedesign Inc., which was merged with the company.
• As a result, the company’s earnings summary for 1H FY2024/8 show sales being down 12% YoY, adjusted EBITDA up 2% YoY, and operating profit up 237% YoY.

• MHI was sold off last week as FY Mar-24 operating profit fell short of guidance and management guided for a decline in new orders this fiscal year.
• Orders momentum has peaked. Sales and profits will follow. But the latter are still rising and guidance could once again be conservative.
• Consolidation of the share price is likely to continue until orders and profit trends are confirmed.

• 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, after a stellar showing by HD Hyundai Marine Solution (443060 KS), the coming week will be a busy one for India listings.
• On the placement front, there were no major deals during the week. We did look at Asmedia Technology (5269 TT) planned GDR, and Wuxi XDC’s upcoming lockup expiry.

• China’s two national port companies China Merchants Port (144 HK) and Cosco Shipping Ports (1199 HK) have underperformed, but exports have picked up. We see an opportunity here.
• With a 9.2% increase in container throughput, CSPL even down by 4.8% YTD, underperformed CMPH by 12.9pp. There is room for it to catch up.
• CSPL is also cheaper at 7x and 6.3x PERs for the next two years, making it more attractive on a relative basis.

• 1H Results: On April 12, 2024, Paycloud Holdings Inc. announced its 2Q FY2024/8 earnings, its first earnings announcement since becoming a holding company and changing its name on March 1, 2024.
• In 1H FY2024/8, the company reported net sales of ¥1,990 mn, adjusted EBITDA of ¥226 mn, and operating profit of ¥86 mn. It had an irregular 5-month accounting period in 1Q FY2023/8 that included the July-August 2022 earnings following a change in the accounting period of the former Valuedesign Inc., which was merged with the company.
• As a result, the company’s earnings summary for 1H FY2024/8 show sales being down 12% YoY, adjusted EBITDA up 2% YoY, and operating profit up 237% YoY.

• KKR’s Offer for Alps Logistics (9055 JP) is a knock-out price. HUGE MINORITY WIN. This trades a little wide because the “gap risk” is so large, but it’s still safe.
• It’s reasonable to expect the listing of various components of L’Occitane (973 HK) other than in HK, would (should) be hugely accretive; for those investors who can (or may) participate.
• Hankook Tire & Technology (161390 KS) seeks a controlling stake in Hanon Systems (018880 KS).

• 10.7% share in the first quarter compared to 8.6% in the same period last year.
• DAF trucks are highly desired by customers in South America and the region is an important part of PACCAR’s growth and success.
• In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture.

• Republic Services, during their first quarter 2024 earnings, highlighted strong financial results underpinned by profit-oriented growth.
• During the quarter, they saw revenue growth of 8%, an adjusted EBITDA growth of 12%, an expansion of adjusted EBITDA margin by 120 basis points.
• The adjusted earnings per share were $1.45 and the adjusted free cash flow produced was $535 million.

• KKR’s Offer for Alps Logistics (9055 JP) is a knock-out price. HUGE MINORITY WIN. This trades a little wide because the “gap risk” is so large, but it’s still safe.
• It’s reasonable to expect the listing of various components of L’Occitane (973 HK) other than in HK, would (should) be hugely accretive; for those investors who can (or may) participate.
• Hankook Tire & Technology (161390 KS) seeks a controlling stake in Hanon Systems (018880 KS).

• 10.7% share in the first quarter compared to 8.6% in the same period last year.
• DAF trucks are highly desired by customers in South America and the region is an important part of PACCAR’s growth and success.
• In the third quarter of last year, PACCAR announced a commercial vehicle battery joint venture.

• Republic Services, during their first quarter 2024 earnings, highlighted strong financial results underpinned by profit-oriented growth.
• During the quarter, they saw revenue growth of 8%, an adjusted EBITDA growth of 12%, an expansion of adjusted EBITDA margin by 120 basis points.
• The adjusted earnings per share were $1.45 and the adjusted free cash flow produced was $535 million.

• Yesterday after the close, Nissin Corp (9066 JP) announced earnings (down vs last year), guidance (back up partway to last year), and a sale of securities to raise ¥6+bn.
• Nissin also announced an employee share incentive plan (¥900mm) and an adjustment to its MTMP from Apr24 to Mar27. Much lower revenues. Same OP. Higher net. Higher Div Payout ratio.
• They also announced a really big buyback which should be done by the time people read this. It is really big.

• Management has indicated that the pipeline for new leases, renewals is robust as ICE & multiple government entities seek capacity.
• Company is engaged in multiple discussions.
• In addition, the recent debt issuance extended maturities & CXW was able to maintain the cost of capital despite the uncertain rate, economic outlook.

• Illinois Tool Works Inc., a globally diversified manufacturing company, has experienced a mixed start to its first quarter 2024 results.
• Despite the ongoing challenging demand environment across the majority of its segments, organic growth has managed to decline at a rate of only 0.6% while five of the seven segments have also reported a similar trend.
• Conversely, this difficult environment has not deterred Illinois Tool Works’ management from maintaining a positive outlook for the remainder of the fiscal year.

• Yesterday after the close, Nissin Corp (9066 JP) announced earnings (down vs last year), guidance (back up partway to last year), and a sale of securities to raise ¥6+bn.
• Nissin also announced an employee share incentive plan (¥900mm) and an adjustment to its MTMP from Apr24 to Mar27. Much lower revenues. Same OP. Higher net. Higher Div Payout ratio.
• They also announced a really big buyback which should be done by the time people read this. It is really big.

• Management has indicated that the pipeline for new leases, renewals is robust as ICE & multiple government entities seek capacity.
• Company is engaged in multiple discussions.
• In addition, the recent debt issuance extended maturities & CXW was able to maintain the cost of capital despite the uncertain rate, economic outlook.

• Illinois Tool Works Inc., a globally diversified manufacturing company, has experienced a mixed start to its first quarter 2024 results.
• Despite the ongoing challenging demand environment across the majority of its segments, organic growth has managed to decline at a rate of only 0.6% while five of the seven segments have also reported a similar trend.
• Conversely, this difficult environment has not deterred Illinois Tool Works’ management from maintaining a positive outlook for the remainder of the fiscal year.