Industrials

• During the last decades, the airport industry has proven to be resilient, having a traffic recovery from previous local or global crises such as September 11, in the EE.UU., SARS, and the financial crisis.
• The COVID-19 pandemic was not the exception, and now the traffic recovery is within its traffic recovery corridor worldwide, reaching the pre-pandemic levels.
• Although we expect 3Q24 quarterly results to be negatively impacted by total traffic contraction, overall total EBITDA will rise 15% YoY, mainly explained by a positive performance on VOLAR, ASUR, and GAP’s results.

• Tigus provides a clear view of industries and companies for research
• Kyle Mowry discusses Driven Brands as a complex but interesting investment
• Driven Brands offers a combination of private equity control and public market liquidity, leading to potential mispricing and alpha opportunity

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

• Waaree Energies is looking to raise up to US$514m in its India IPO.
• Waaree Energies is a solar PV module manufacturer in India with an aggregate installed capacity of 12 GW, as of Jun 2024.
• We have looked at the company’s past performance in our earlier note. In this note, we talk about the RHP updates and valuations.

• During the last decades, the airport industry has proven to be resilient, having a traffic recovery from previous local or global crises such as September 11, in the EE.UU., SARS, and the financial crisis.
• The COVID-19 pandemic was not the exception, and now the traffic recovery is within its traffic recovery corridor worldwide, reaching the pre-pandemic levels.
• Although we expect 3Q24 quarterly results to be negatively impacted by total traffic contraction, overall total EBITDA will rise 15% YoY, mainly explained by a positive performance on VOLAR, ASUR, and GAP’s results.

• Tigus provides a clear view of industries and companies for research
• Kyle Mowry discusses Driven Brands as a complex but interesting investment
• Driven Brands offers a combination of private equity control and public market liquidity, leading to potential mispricing and alpha opportunity

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

• Waaree Energies is looking to raise up to US$514m in its India IPO.
• Waaree Energies is a solar PV module manufacturer in India with an aggregate installed capacity of 12 GW, as of Jun 2024.
• We have looked at the company’s past performance in our earlier note. In this note, we talk about the RHP updates and valuations.

• There are 3 adds and 2 deletes for the iSharesGlobal Clean Energy ETF while there are 2 adds and 2 deletes for the iShares Global Water UCITS ETF.
• With US$5bn benchmarked to the iSharesGlobal Clean Energy and related ETFs, and US$3.5bn benchmarked to the iShares Global Water and related ETFs, there is multiple days of ADV to trade.
• We see a noticeable rise in cumulative excess volume over the last two trading sessions, so there will be positioning in the stocks. 

• There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
• There could be buying in Hyundai Rotem, while there could be selling in KT Corp, Celltrion Pharm, Kum Yang, Hyundai Engineering & Construction, Hyundai Steel, CosmoAM&T and L&F.
• Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.

• Integrated logistics company COSCO SHIPPING International (Singapore) is combining acquisitions and other investments with a focus on digitalisation and sustainability to grow.
• Since 2018, the company has invested significantly, including acquiring logistics company Cogent Holdings, to shift its main business from ship building, ship repairing and marine engineering to integrated logistics.
• COSCO SHIPPING International (Singapore) Co., Ltd. aims to become the best integrated logistics service provider in South and Southeast Asia.

• CTAS initially benefited from peak demand due to post-Covid conditions, leading to significant pricing power
• However, the company is now facing challenges as demand decreases and competition increases, impacting its market share
• CTAS’s aggressive approach has led to stealing market share from competitors like VSTS, highlighting the importance of adapting to changing market conditions in business.

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.

• SN US is a profitable company spun off from JS Global, driving profits for its parent company
• The company focuses on the US market and has seen impressive growth at a 25% CAGR over the past five years
• SN US business is divided into Shark and Ninja segments, offering a variety of products and focusing on growing market share and innovation.

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.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess SIG plc’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• UFP Industries Inc. reported mixed results for the second quarter of 2024, with performance reflecting varied impacts across its segments due to shifting market conditions and strategic changes.
• While the company is well positioned with significant capital for future investments, it faces challenges that are affecting its performance and strategic outlook.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• There are 3 adds and 2 deletes for the iSharesGlobal Clean Energy ETF while there are 2 adds and 2 deletes for the iShares Global Water UCITS ETF.
• With US$5bn benchmarked to the iSharesGlobal Clean Energy and related ETFs, and US$3.5bn benchmarked to the iShares Global Water and related ETFs, there is multiple days of ADV to trade.
• We see a noticeable rise in cumulative excess volume over the last two trading sessions, so there will be positioning in the stocks. 

• There are a few stocks in Korea that have outperformed/ underperformed their peers and could be added to or deleted from global passive portfolios next month.
• There could be buying in Hyundai Rotem, while there could be selling in KT Corp, Celltrion Pharm, Kum Yang, Hyundai Engineering & Construction, Hyundai Steel, CosmoAM&T and L&F.
• Based on our estimate of passive assets, trackers will need to trade between US$57m to US$230m of the stocks. Impact will vary between 3x-14.5x of ADV to trade.

• Integrated logistics company COSCO SHIPPING International (Singapore) is combining acquisitions and other investments with a focus on digitalisation and sustainability to grow.
• Since 2018, the company has invested significantly, including acquiring logistics company Cogent Holdings, to shift its main business from ship building, ship repairing and marine engineering to integrated logistics.
• COSCO SHIPPING International (Singapore) Co., Ltd. aims to become the best integrated logistics service provider in South and Southeast Asia.

• CTAS initially benefited from peak demand due to post-Covid conditions, leading to significant pricing power
• However, the company is now facing challenges as demand decreases and competition increases, impacting its market share
• CTAS’s aggressive approach has led to stealing market share from competitors like VSTS, highlighting the importance of adapting to changing market conditions in business.

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.

• SN US is a profitable company spun off from JS Global, driving profits for its parent company
• The company focuses on the US market and has seen impressive growth at a 25% CAGR over the past five years
• SN US business is divided into Shark and Ninja segments, offering a variety of products and focusing on growing market share and innovation.

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.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess SIG plc’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• UFP Industries Inc. reported mixed results for the second quarter of 2024, with performance reflecting varied impacts across its segments due to shifting market conditions and strategic changes.
• While the company is well positioned with significant capital for future investments, it faces challenges that are affecting its performance and strategic outlook.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Since MBK’s tender started, institutional trading has been light, leaving local retail investors in control. Choi’s 35% ceiling poses real proration risk for traders eyeing the action.
• MBK might not have wanted YPP; they could just be using it as bait to not only drain Choi’s cash but also to put them in a tight financial spot.
• MBK is set to focus on snapping up Korea Zinc shares in the open market to increase their stake and thwart any buyback tender offers.

• Keppel Ltd, once renowned for its offshore marine and real estate businesses, is undertaking a fundamental transformation to become a global asset manager with S$200bn in funds under management (FUM) by 2030.
• It is unprecedented for an industrial operator to successfully transform into an asset manager of such scale.
• As such, close attention ought to be given to the progress and prospects of Keppel’s transformation. 

• With 95% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
• We estimate a one-way turnover of 11% at the rebalance resulting in a one-way trade of CNY17.56bn (US$2.48bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
• After drifting lower over the last couple of months, the forecast adds have outperformed the forecast deletes over the last couple of weeks. There should be more to go here.

• With 95% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 December
• We estimate a one-way turnover of 9.9% at the rebalance resulting in a one-way trade of CNY14.4bn (US$2.04bn). The Industrials sector could gain the most index spots.
• The forecast adds have drifted lower versus the forecast deletes over the last few months. Part of that can be attributed to the inflows to ETFs tracking the CSI1000 Index.

• China Everbright Environment (257 HK) will benefit immensely from the lower debt burden of local governments as the central government rolls out more fiscal support measures.
• We anticipate an acceleration in receivable collection to improve its cash flow while the new projects pipeline may speed up. Its FCF has positively turned around in 1H24.
• Despite recent outperformance, it remains a laggard since 2022. Still, it trades on an undemanding 5.5x PER and an appealing 6.3% yield on a higher dividend payout. 

• Vikran Engineering Limited (1635154D IN) is planning to raise about US$119m through its upcoming IPO in India. The lead bookrunners for the deal are Pantomath Limited, Systematix Group.
• Vikran Engineering Limited (VEL) based in Mumbai, operates as an Engineering, Procurement & Construction (EPC) firm, focusing on power, water, and railway infrastructure projects. 
• VEL plans to allocate its funds towards financing the company’s working capital needs and general corporate purposes.

• DNOW’s existing fulfillment model is contributing to increased earnings and free cash flow capacity through industry cycles.
• 1H24 revenue totaled $1,196 million compared with $1,178 million in 1H23, despite a 5% decline in the average global rig count. US revenue totaled $947 million in 1H24 compared with $883 million in 1H23 despite a 24% decline in the average US rig count.
• US gains reflect increased market share and a partial contribution from the $185 million Whitco acquisition, which closed March 12, 2024. Free cash flow totaled $98 million in 1H24. 

• Since MBK’s tender started, institutional trading has been light, leaving local retail investors in control. Choi’s 35% ceiling poses real proration risk for traders eyeing the action.
• MBK might not have wanted YPP; they could just be using it as bait to not only drain Choi’s cash but also to put them in a tight financial spot.
• MBK is set to focus on snapping up Korea Zinc shares in the open market to increase their stake and thwart any buyback tender offers.

• Keppel Ltd, once renowned for its offshore marine and real estate businesses, is undertaking a fundamental transformation to become a global asset manager with S$200bn in funds under management (FUM) by 2030.
• It is unprecedented for an industrial operator to successfully transform into an asset manager of such scale.
• As such, close attention ought to be given to the progress and prospects of Keppel’s transformation. 

• With 95% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
• We estimate a one-way turnover of 11% at the rebalance resulting in a one-way trade of CNY17.56bn (US$2.48bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
• After drifting lower over the last couple of months, the forecast adds have outperformed the forecast deletes over the last couple of weeks. There should be more to go here.

• With 95% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 December
• We estimate a one-way turnover of 9.9% at the rebalance resulting in a one-way trade of CNY14.4bn (US$2.04bn). The Industrials sector could gain the most index spots.
• The forecast adds have drifted lower versus the forecast deletes over the last few months. Part of that can be attributed to the inflows to ETFs tracking the CSI1000 Index.

• China Everbright Environment (257 HK) will benefit immensely from the lower debt burden of local governments as the central government rolls out more fiscal support measures.
• We anticipate an acceleration in receivable collection to improve its cash flow while the new projects pipeline may speed up. Its FCF has positively turned around in 1H24.
• Despite recent outperformance, it remains a laggard since 2022. Still, it trades on an undemanding 5.5x PER and an appealing 6.3% yield on a higher dividend payout. 

• Vikran Engineering Limited (1635154D IN) is planning to raise about US$119m through its upcoming IPO in India. The lead bookrunners for the deal are Pantomath Limited, Systematix Group.
• Vikran Engineering Limited (VEL) based in Mumbai, operates as an Engineering, Procurement & Construction (EPC) firm, focusing on power, water, and railway infrastructure projects. 
• VEL plans to allocate its funds towards financing the company’s working capital needs and general corporate purposes.

• DNOW’s existing fulfillment model is contributing to increased earnings and free cash flow capacity through industry cycles.
• 1H24 revenue totaled $1,196 million compared with $1,178 million in 1H23, despite a 5% decline in the average global rig count. US revenue totaled $947 million in 1H24 compared with $883 million in 1H23 despite a 24% decline in the average US rig count.
• US gains reflect increased market share and a partial contribution from the $185 million Whitco acquisition, which closed March 12, 2024. Free cash flow totaled $98 million in 1H24. 

• KRX will launch 12 ETFs tracking the Korea Value-Up Index on November 4—9 passive and 3 active—aiming for an initial AUM exceeding 1 trillion KRW.
• KRX is pressuring ETF operators to reveal initial capital by November 4, with expectations to exceed 1 trillion KRW due to government pressure.
• Early signs of position buildup are emerging, so it’s essential to monitor stocks with significant passive impact closely moving forward.

• Using data from the close on 11 October, there could be 6 adds and 5 deletes for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December.
• There will also be capping and funding flows that will lead to a one-way turnover of 15% and a one-way trade of TWD 49bn (US$1.52bn)
• Shorts have been building up in some of the forecast deletes and in a couple of the forecast adds as well.

• Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
• The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
• Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

• CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance. 
• The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
• CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

• Last week J&T Global Express reported Q324 express parcel volume by segment
• Volume growth in all segments slowed dramatically compared to Q224
• Without needed context, we believe the numbers undermine J&T growth story

• GXO Logistics, a leading global provider of supply chain solutions, has been in the news recently for exploring strategic options including a possible sale.
• The company has positioned itself well as a potential acquisition target.
• Since its spinoff from XPO Inc. in 2021, GXO has experienced steady growth, signing $270 million of new business in the second quarter and expanding its pipeline to a record $2.3 billion.

• Sai Gon Cargo Service (SCS VN) reported strong September numbers, with cargo volumes increasing 40% YoY. 
• With the tariff hikes in effect, we expect revenues/profits to rise 45% YoY/40% YoY in Q3 2024, 
• Trading at 10.7x PE FY24 and a 9% dividend yield, we cover catalysts such as the Long Thanh airport bidding and the corporate tax change to 20% in 2025. 

• Triumph Group’s first quarter fiscal year 2025 results offer a multifaceted view of the company’s current strategic and financial positioning.
• On the one hand, Triumph showcased several positive developments, such as year over-year sales growth led by strong aftermarket demand and successful debt reduction efforts.
• Additionally, the company received credit rating upgrades from major agencies, Moody’s and S&P, signaling an improved financial outlook to investors and stakeholders.

• TriMas Corporation’s second-quarter 2024 earnings report presents a mixed performance across its business segments.
• The company experienced moderate revenue growth compared to the previous year but faced significant challenges in certain areas.
• The highlights of the earnings reveal both encouraging signs of recovery and concerns around persistent operational difficulties.

• Ashtead, known as Sunbelt, is the second largest equipment rental company in the US
• Despite cyclical concerns and minor operational issues, it is seen as a strong investment opportunity due to organic growth potential
• Sunbelt has a diverse fleet of equipment and focuses on non-residential construction, industrial clients, and maintenance operations, improving efficiency for customers.

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.

• KRX will launch 12 ETFs tracking the Korea Value-Up Index on November 4—9 passive and 3 active—aiming for an initial AUM exceeding 1 trillion KRW.
• KRX is pressuring ETF operators to reveal initial capital by November 4, with expectations to exceed 1 trillion KRW due to government pressure.
• Early signs of position buildup are emerging, so it’s essential to monitor stocks with significant passive impact closely moving forward.

• Using data from the close on 11 October, there could be 6 adds and 5 deletes for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in December.
• There will also be capping and funding flows that will lead to a one-way turnover of 15% and a one-way trade of TWD 49bn (US$1.52bn)
• Shorts have been building up in some of the forecast deletes and in a couple of the forecast adds as well.

• Below is a sample of the unloved Japanese stocks we focus on at Azabu Research, with key valuation metrics and latest news.
• The average PBR in this week’s list is 0.5x and the average P/E is 5.9x.
• Most of the stocks in this week’s round up are related to either the auto supply chain or the electric power grid.

• CIMC Enric Holdings (3899 HK) has underperformed benchmark Indices YTD, and its business segments are undervalued based on their earnings performance. 
• The clean energy segment is only valued at HK$3.4bn, or 24% of the stock’s total. However, it is the largest earnings generator in 1H24, contributing 60% of 1H24 profit.
• CLPT’s earnings contribution is 22% more than CIMC Safeway’s, but it is only valued at 27% of the latter, equivalent to an undemanding 9.8x annualised PER.

• Last week J&T Global Express reported Q324 express parcel volume by segment
• Volume growth in all segments slowed dramatically compared to Q224
• Without needed context, we believe the numbers undermine J&T growth story

• GXO Logistics, a leading global provider of supply chain solutions, has been in the news recently for exploring strategic options including a possible sale.
• The company has positioned itself well as a potential acquisition target.
• Since its spinoff from XPO Inc. in 2021, GXO has experienced steady growth, signing $270 million of new business in the second quarter and expanding its pipeline to a record $2.3 billion.

• Sai Gon Cargo Service (SCS VN) reported strong September numbers, with cargo volumes increasing 40% YoY. 
• With the tariff hikes in effect, we expect revenues/profits to rise 45% YoY/40% YoY in Q3 2024, 
• Trading at 10.7x PE FY24 and a 9% dividend yield, we cover catalysts such as the Long Thanh airport bidding and the corporate tax change to 20% in 2025. 

• Triumph Group’s first quarter fiscal year 2025 results offer a multifaceted view of the company’s current strategic and financial positioning.
• On the one hand, Triumph showcased several positive developments, such as year over-year sales growth led by strong aftermarket demand and successful debt reduction efforts.
• Additionally, the company received credit rating upgrades from major agencies, Moody’s and S&P, signaling an improved financial outlook to investors and stakeholders.

• TriMas Corporation’s second-quarter 2024 earnings report presents a mixed performance across its business segments.
• The company experienced moderate revenue growth compared to the previous year but faced significant challenges in certain areas.
• The highlights of the earnings reveal both encouraging signs of recovery and concerns around persistent operational difficulties.

• Ashtead, known as Sunbelt, is the second largest equipment rental company in the US
• Despite cyclical concerns and minor operational issues, it is seen as a strong investment opportunity due to organic growth potential
• Sunbelt has a diverse fleet of equipment and focuses on non-residential construction, industrial clients, and maintenance operations, improving efficiency for customers.

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.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the live IPOs front, the two Japanese IPOs, Tokyo Metro (9023 JP) and Rigaku Holdings (268A JP) appeared attractively priced. The same couldn’t be said about Hyundai Motor India.
• On the placements front, there were deals in Hong Kong, Japan and India. 

• Azul and GOL running with liability positions over double LATAM – convergence required to ensure financial sustainability.
• Azul’s USD-denominated liabilities continue to weigh heavily, suggesting profitability and full balance sheet clean up distant prospects despite lessor re-negotiations.
• GOL’s Chapter 11 process needs to focus on balance sheet recalibration – BRL weakness may require recalibration.

Ocean Wilsons Holdings’ (OCN’s) H124 results showed good growth, reflecting a strong performance from Wilson Sons and a positive performance from the investment portfolio (OWIL). While the strategic review remains ongoing, in August the company announced that it is in discussions with I Squared that may or may not lead to an offer for its holding in Wilson Sons (BOVESPA: PORT3). Despite the review and the potential for value realisation, OCN still trades at a c 40% discount to our valuation of 2,275p/share.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the live IPOs front, the two Japanese IPOs, Tokyo Metro (9023 JP) and Rigaku Holdings (268A JP) appeared attractively priced. The same couldn’t be said about Hyundai Motor India.
• On the placements front, there were deals in Hong Kong, Japan and India. 

• Azul and GOL running with liability positions over double LATAM – convergence required to ensure financial sustainability.
• Azul’s USD-denominated liabilities continue to weigh heavily, suggesting profitability and full balance sheet clean up distant prospects despite lessor re-negotiations.
• GOL’s Chapter 11 process needs to focus on balance sheet recalibration – BRL weakness may require recalibration.

Ocean Wilsons Holdings’ (OCN’s) H124 results showed good growth, reflecting a strong performance from Wilson Sons and a positive performance from the investment portfolio (OWIL). While the strategic review remains ongoing, in August the company announced that it is in discussions with I Squared that may or may not lead to an offer for its holding in Wilson Sons (BOVESPA: PORT3). Despite the review and the potential for value realisation, OCN still trades at a c 40% discount to our valuation of 2,275p/share.