Industrials

• 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.

• In Q1 FY02/25, Daiseki reported sales of JPY16.7bn (-6.6% YoY), gross profit of JPY5.9bn (-1.1% YoY), and operating profit of JPY3.9bn (-0.7% YoY).
• Daiseki Co.’s sales increased 7.0% YoY, while DES’s sales fell 28.4% YoY, leading to a consolidated sales decrease.
• Consolidated operating profit for Q1 decreased by 0.7% YoY to JPY3.9bn, with OPM rising 1.4pp to 23.4%.

• RaaS Reseach Group has published an update report on IP services group QANTM Intellectual Property (ASX:QIP) following the release of the Scheme of Arrangement documentation with Adamantem Capital on 25 June.The documentation includes the Independent Expert’s report from Grant Thornton Corporate Finance which concludes that the Scheme is “fair and reasonable” and in the “best interests of QANTM shareholders in the absence of a superior alternative proposal emerging”.
• The independent expert concludes that the fair market value range for QANTM shares on a control basis is from $1.736/share to $2.098/share, suggesting a respective premium of 4.7% and discount of 13.4% to the cash offer of $1.817/share.
• Our existing DCF-based valuation has remained unchanged at $1.79/share.

• In Q1 FY02/25, Daiseki reported sales of JPY16.7bn (-6.6% YoY), gross profit of JPY5.9bn (-1.1% YoY), and operating profit of JPY3.9bn (-0.7% YoY).
• Daiseki Co.’s sales increased 7.0% YoY, while DES’s sales fell 28.4% YoY, leading to a consolidated sales decrease.
• Consolidated operating profit for Q1 decreased by 0.7% YoY to JPY3.9bn, with OPM rising 1.4pp to 23.4%.

• RaaS Reseach Group has published an update report on IP services group QANTM Intellectual Property (ASX:QIP) following the release of the Scheme of Arrangement documentation with Adamantem Capital on 25 June.The documentation includes the Independent Expert’s report from Grant Thornton Corporate Finance which concludes that the Scheme is “fair and reasonable” and in the “best interests of QANTM shareholders in the absence of a superior alternative proposal emerging”.
• The independent expert concludes that the fair market value range for QANTM shares on a control basis is from $1.736/share to $2.098/share, suggesting a respective premium of 4.7% and discount of 13.4% to the cash offer of $1.817/share.
• Our existing DCF-based valuation has remained unchanged at $1.79/share.

• Palliser’s proposal failed to meet the challenging two-thirds threshold at the AGM. Given the ownership landscape, this outcome was anticipated.
• Palliser nearing 50% approval at Keisei’s AGM could signify a triumph, potentially leading to significant pressure on management and a positive shift in share price performance.
• Keisei Electric Railway Co (9009 JP)‘s valuation, now attractively low post a 33% drop and with a potential OP guidance hike, presents minimal downside at a 26.0x EV/OP multiple.

• Today, Toenec Corp (1946 JP) – an integrated facilities company 50+% owned by Chubu Electric Power Co (9502 JP) announced Chubu EPCO would sell down 7.7% to go to 43%+.
• This is surprising. It suggests there are more selldowns to come. It’s also “big” at 88 days of ADV and about 26% of Max Real World Float (85% retail).
• This is an odd sell-down. Chubu EPCO obviously doesn’t want to buy it in. That means overhang for years.

• On July 1, Boeing Co (BA US) announced a definitive agreement to acquire Spirit Aerosystems Holdings, Inc (SPR US) in an expected all-share deal valued at c.$4.7 billion, or $37.25/share.
• Consideration is calculated using a floating exchange ratio ($37.25 divided by 15-day VWAP) with a collar. 0.20466 using Boeing’s last closing share price, which implies 3.9% dilution for Boeing’s shareholders.
• The offer price is 6.4% above consensus price target median ($35), and reasonable, reflecting some control premium. The valuation represents 10.1x EV/2025 EBITDA based on IBES estimates. Long spread.

• Lindbergh S.p.A. provides specialized logistics services for industrial maintenance & repair operations in Italy and France, with high barriers to entry
• Strong unit economics with zero customer and revenue churn most years, over 90% of revenue from recurring contracts
• Recent expansion into B2C thermohydraulic MRO services market in Italy, strong competitive advantage and potential for growth

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.

• Palliser’s proposal failed to meet the challenging two-thirds threshold at the AGM. Given the ownership landscape, this outcome was anticipated.
• Palliser nearing 50% approval at Keisei’s AGM could signify a triumph, potentially leading to significant pressure on management and a positive shift in share price performance.
• Keisei Electric Railway Co (9009 JP)‘s valuation, now attractively low post a 33% drop and with a potential OP guidance hike, presents minimal downside at a 26.0x EV/OP multiple.

• Today, Toenec Corp (1946 JP) – an integrated facilities company 50+% owned by Chubu Electric Power Co (9502 JP) announced Chubu EPCO would sell down 7.7% to go to 43%+.
• This is surprising. It suggests there are more selldowns to come. It’s also “big” at 88 days of ADV and about 26% of Max Real World Float (85% retail).
• This is an odd sell-down. Chubu EPCO obviously doesn’t want to buy it in. That means overhang for years.

• On July 1, Boeing Co (BA US) announced a definitive agreement to acquire Spirit Aerosystems Holdings, Inc (SPR US) in an expected all-share deal valued at c.$4.7 billion, or $37.25/share.
• Consideration is calculated using a floating exchange ratio ($37.25 divided by 15-day VWAP) with a collar. 0.20466 using Boeing’s last closing share price, which implies 3.9% dilution for Boeing’s shareholders.
• The offer price is 6.4% above consensus price target median ($35), and reasonable, reflecting some control premium. The valuation represents 10.1x EV/2025 EBITDA based on IBES estimates. Long spread.

• Lindbergh S.p.A. provides specialized logistics services for industrial maintenance & repair operations in Italy and France, with high barriers to entry
• Strong unit economics with zero customer and revenue churn most years, over 90% of revenue from recurring contracts
• Recent expansion into B2C thermohydraulic MRO services market in Italy, strong competitive advantage and potential for growth

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.