Industrials

• The Offering priced today at ¥7,338/share vs ¥8,039/share traded at the close on the day of the announcement. That’s an 8.7% discount for no dilution. 
• Compared to a broad basket of Peer Baskets (yes, a basket of baskets), the stock has underperformed by 4.2%, and the 3% discount today puts it at 7+% move.
• Given the relative cheapness, one should be comfortable putting this on if it gets sold off. This is not different to my initial opinion.

• CIMC Vehicle Group Co Ltd (1839 HK) announced the H Share buyback offer, excluding CIMC’s shares, is at HK$7.50, a 16.5% premium to the undisturbed price. The offer is final.
• The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection) along with a 90% minimum acceptance condition.  
• Excluding the irrevocables, the 90% threshold requires an independent H Shareholder acceptance rate of 77.7%, which could be challenging due to a light offer. Risk/reward unfavourable. 

• Advantest has dropped back 11.5% from its recent high but is still up 43% year-to-date and up 2.3X from a year ago. Consolidation is likely to continue.
• Demand for High Bandwidth Memory (HBM) for use with AI processors could lift sales, profits and profit margins to new highs within the next two years.
• That could bring the projected P/E ratio down from 75.5x FY Mar-24 EPS guidance to 31x FY Mar-26 EPS in a favorable but not unreasonably optimistic scenario. 

• Back on the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.
• This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.
• Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.

• Q423 revenue growth, core margins, and expense control all looked strong
• Evolving revenue mix bodes well for long-term improvement in core margin
• Buyback update & Q124 guidance both +ive; appears cheap at 14x consensus

• Samhyun reported excellent IPO bookbuilding results. Samhyun’s IPO price has been determined at 30,000 won per share, which is 20% higher than the high end of the IPO price range.
• A total of 2,168 institutional investors participated in this IPO book building. The demand ratio was 649 to 1. Samhyun will start trading on 21 March 2024. 
• Our base case valuation of Samhyun is implied market cap of 396 billion won or target price of 37,402 won, which is 25% higher than the IPO price.

• The AFR reports that Adamantem Capital had submitted a non-binding indicative offer for Qantm Intellectual Property (QIP AU) at A$1.817 per share, a 30.7% premium to the last close. 
• In response to a previous AFR article, Qantm disclosed a non-binding indicative offer from Rouse but declined to reveal a price or the structure (cash or scrip). 
• AFR reports that other potential interested parties, such as Quadrant Private Equity and IPH, are also in the running. Adamantem’s attractive offer sets a high bar for other potential bidders. 

• Tocalo Co Ltd (3433 JP) provides surface treatments that improve the performance of materials used across a range of industries by adding properties.
• In FY03/23, sales were JPY48.1bn, operating profit  JPY10.6bn, recurring profit JPY11.0bn, and net  income attributable to owners of the parent JPY7.4bn.
• Tocalo Co., Ltd. has announced that it has been recognized with a B score in the Climate Change Report 2023 published by CDP.

• IDEC Corp (6652 JP) is a comprehensive manufacturer and vendor of control equipment, especially human-machine interface (HMI) devices such as switches.
• For FY03/23, the company reported revenue of JPY83.9bn, operating profit of JPY14.0bn, recurring profit of JPY14.4bn, and net income of JPY10.1bn, with EPS of JPY348.4.
• The company achieved its FY03/25 targets two years ahead of schedule, prompting management to announce upwardly revised targets for the same year in May 2023.

• Mitsuboshi Belting (5192 JP) manufactures power transmission belts for automobiles and general industrial machinery. The company belongs to a group of six or seven global leaders in this space.
• In FY03/23, revenue was JPY82.9bn (+10.7% YoY), operating profit JPY9.0bn (+18.2% YoY), recurring profit JPY10.5bn (+22.4% YoY), and net income attributable to owners of the parent JPY7.1bn (+10.8% YoY).
• In May 2022, the company announced the following targets as its vision for FY2030 (FY03/31): JPY100.0bn in revenue, operating profit of JPY13.0bn, and ROE of 10.0%.

• The Offering priced today at ¥7,338/share vs ¥8,039/share traded at the close on the day of the announcement. That’s an 8.7% discount for no dilution. 
• Compared to a broad basket of Peer Baskets (yes, a basket of baskets), the stock has underperformed by 4.2%, and the 3% discount today puts it at 7+% move.
• Given the relative cheapness, one should be comfortable putting this on if it gets sold off. This is not different to my initial opinion.

• CIMC Vehicle Group Co Ltd (1839 HK) announced the H Share buyback offer, excluding CIMC’s shares, is at HK$7.50, a 16.5% premium to the undisturbed price. The offer is final.
• The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection) along with a 90% minimum acceptance condition.  
• Excluding the irrevocables, the 90% threshold requires an independent H Shareholder acceptance rate of 77.7%, which could be challenging due to a light offer. Risk/reward unfavourable. 

• Advantest has dropped back 11.5% from its recent high but is still up 43% year-to-date and up 2.3X from a year ago. Consolidation is likely to continue.
• Demand for High Bandwidth Memory (HBM) for use with AI processors could lift sales, profits and profit margins to new highs within the next two years.
• That could bring the projected P/E ratio down from 75.5x FY Mar-24 EPS guidance to 31x FY Mar-26 EPS in a favorable but not unreasonably optimistic scenario. 

• Back on the 28 November 2023, SOE-backed CIMC Vehicle Group Co Ltd (1839 HK) announced a conditional H-share buyback at a $7.00/H-share, a paltry 8.6% premium to last close.
• This Scheme-like Offer, with a tendering condition, secured SAFE approval late January. But last month CIMC announced a CBP investigation into the evasion of U.S. anti-dumping and countervailing duties.
• Now CIMC has announced a firm Offer at HK$7.50/share. Terms are final. The majority of independent H-shareholders are supportive. This looks done. Possible completion late-May, early-June.

• Q423 revenue growth, core margins, and expense control all looked strong
• Evolving revenue mix bodes well for long-term improvement in core margin
• Buyback update & Q124 guidance both +ive; appears cheap at 14x consensus

• Samhyun reported excellent IPO bookbuilding results. Samhyun’s IPO price has been determined at 30,000 won per share, which is 20% higher than the high end of the IPO price range.
• A total of 2,168 institutional investors participated in this IPO book building. The demand ratio was 649 to 1. Samhyun will start trading on 21 March 2024. 
• Our base case valuation of Samhyun is implied market cap of 396 billion won or target price of 37,402 won, which is 25% higher than the IPO price.

• The AFR reports that Adamantem Capital had submitted a non-binding indicative offer for Qantm Intellectual Property (QIP AU) at A$1.817 per share, a 30.7% premium to the last close. 
• In response to a previous AFR article, Qantm disclosed a non-binding indicative offer from Rouse but declined to reveal a price or the structure (cash or scrip). 
• AFR reports that other potential interested parties, such as Quadrant Private Equity and IPH, are also in the running. Adamantem’s attractive offer sets a high bar for other potential bidders. 

• Tocalo Co Ltd (3433 JP) provides surface treatments that improve the performance of materials used across a range of industries by adding properties.
• In FY03/23, sales were JPY48.1bn, operating profit  JPY10.6bn, recurring profit JPY11.0bn, and net  income attributable to owners of the parent JPY7.4bn.
• Tocalo Co., Ltd. has announced that it has been recognized with a B score in the Climate Change Report 2023 published by CDP.

• IDEC Corp (6652 JP) is a comprehensive manufacturer and vendor of control equipment, especially human-machine interface (HMI) devices such as switches.
• For FY03/23, the company reported revenue of JPY83.9bn, operating profit of JPY14.0bn, recurring profit of JPY14.4bn, and net income of JPY10.1bn, with EPS of JPY348.4.
• The company achieved its FY03/25 targets two years ahead of schedule, prompting management to announce upwardly revised targets for the same year in May 2023.

• Mitsuboshi Belting (5192 JP) manufactures power transmission belts for automobiles and general industrial machinery. The company belongs to a group of six or seven global leaders in this space.
• In FY03/23, revenue was JPY82.9bn (+10.7% YoY), operating profit JPY9.0bn (+18.2% YoY), recurring profit JPY10.5bn (+22.4% YoY), and net income attributable to owners of the parent JPY7.1bn (+10.8% YoY).
• In May 2022, the company announced the following targets as its vision for FY2030 (FY03/31): JPY100.0bn in revenue, operating profit of JPY13.0bn, and ROE of 10.0%.

• At end-January 2023 it became clear activist Elliott Management had set its sights on Dai Nippon Printing (7912 JP). The stock popped and people got bullish.
• I warned about the “complicated” nature of gains going forward here. Three weeks later they announced details of including ¥100bn of buybacks per year for 3yrs. That’s discussed here.
• I rarely write bearishly about a huge buyback program but from next day open, over 1yr, total return has been 4.9%. Stage 2 starts 11 March with ¥50bn through end-Sep24. 

• Amidst intense competition in online mall retailing, JAL and ANA both launched their own e-commerce malls last year to replace once popular catalogues.
• Although a tough market to enter given the competition from the big 3 (Amazon, Rakuten and Yahoo), airlines have distinct advantages over other small malls.
• In particular, they have data on millions of consumers and access to premium customers willing to spend ¥1 million on a case of wine.

• Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.
• The company’s dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023. 
• We found Precision Tsugami China (1651 HK) using Smartkarma’s Smart Score Screener system.

• At end-January 2023 it became clear activist Elliott Management had set its sights on Dai Nippon Printing (7912 JP). The stock popped and people got bullish.
• I warned about the “complicated” nature of gains going forward here. Three weeks later they announced details of including ¥100bn of buybacks per year for 3yrs. That’s discussed here.
• I rarely write bearishly about a huge buyback program but from next day open, over 1yr, total return has been 4.9%. Stage 2 starts 11 March with ¥50bn through end-Sep24. 

• Amidst intense competition in online mall retailing, JAL and ANA both launched their own e-commerce malls last year to replace once popular catalogues.
• Although a tough market to enter given the competition from the big 3 (Amazon, Rakuten and Yahoo), airlines have distinct advantages over other small malls.
• In particular, they have data on millions of consumers and access to premium customers willing to spend ¥1 million on a case of wine.

• Precision Tsugami China specializes in the production of precision machine tools. Precision Tsugami China is part of the broader Tsugami Corporation, a Japanese company founded in 1923.
• The company’s dividend yield increased from 4.3% in FY2021 to 8.9% in FY2022 and 10.1% in FY2023. 
• We found Precision Tsugami China (1651 HK) using Smartkarma’s Smart Score Screener system.

• Keisei Electric Railway Co (9009 JP) places out 1% of Oriental Land (4661 JP), but rejects lowering its stake to 15%.  That is the end of the near-term catalyst.
• New World Development (17 HK) popped after property cooling measures were scrapped. Then gave those gains back. And then some, and is now trading at 0.11x P/B, its lowest-ever level.
• The spreads for  both Alumina Ltd (AWC AU)  and Azure Minerals (AZS AU) are trading wide; both potentially FIRB-related.

• Comsys Holdings (1721 JP) is one of Japan’s three largest telecommunications construction companies.
• In FY03/23, sales were JPY563.3bn, operating profit was JPY32.1bn, recurring profit was JPY30.9bn, and net income attributable to owners of the parent was JPY19.3bn. Orders totaled JPY553.1bn.
• Comsys Holdings Corporation announced that it will change its representative directors, effective April 1, 2024.

• We forecast €2.6bn Adjusted EBIT in 2024, below management guidance of €2.7bn, given concerns about margin management as capacity increases 12% yoy.
• Detailed analysis of the margin gaps and key drivers of gaps at each of Lufthansa’s airlines illustrates remedial work required with new perspective.
• Bringing each portfolio company towards the Group Adjusted EBIT margin target of >8% would represent the CEO’s finest achievement (apart from helping save the company through COVID).

• Keisei Electric Railway Co (9009 JP) places out 1% of Oriental Land (4661 JP), but rejects lowering its stake to 15%.  That is the end of the near-term catalyst.
• New World Development (17 HK) popped after property cooling measures were scrapped. Then gave those gains back. And then some, and is now trading at 0.11x P/B, its lowest-ever level.
• The spreads for  both Alumina Ltd (AWC AU)  and Azure Minerals (AZS AU) are trading wide; both potentially FIRB-related.

• Comsys Holdings (1721 JP) is one of Japan’s three largest telecommunications construction companies.
• In FY03/23, sales were JPY563.3bn, operating profit was JPY32.1bn, recurring profit was JPY30.9bn, and net income attributable to owners of the parent was JPY19.3bn. Orders totaled JPY553.1bn.
• Comsys Holdings Corporation announced that it will change its representative directors, effective April 1, 2024.

• We forecast €2.6bn Adjusted EBIT in 2024, below management guidance of €2.7bn, given concerns about margin management as capacity increases 12% yoy.
• Detailed analysis of the margin gaps and key drivers of gaps at each of Lufthansa’s airlines illustrates remedial work required with new perspective.
• Bringing each portfolio company towards the Group Adjusted EBIT margin target of >8% would represent the CEO’s finest achievement (apart from helping save the company through COVID).

• Since the US$260 million secondary placement announcement, Nippon Express Holdings (9147 JP) shares are down 5.3% from the undisturbed price of JPY8,039 per share (1 March).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Nippon Express shares have followed the pattern of previous large placements.
• The offering will likely be priced on 11 March. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• COPRO-HOLDINGS. Co., Ltd., (COPRO) announced its 3Q FY24/3 (9 months) results.
• Key consolidated figures included net sales of ¥17,496 mn (+28.8% YoY), operating profit of ¥1,406 mn (+63.0% YoY), ordinary profit of ¥ 1,480 mn (+70.8% YoY), and profit attributable to owners of parent of ¥936 mn (+79.7% YoY).
• COPRO-CONSTRUCTION. Co., Ltd., (formerly COPRO-ENGINEERED), which operates the Company‘s core business of construction technician dispatching, proactively increased the number of recruits amid the chronically serious shortage of labor against the backdrop of regulations capping overtime work to start in April 2024 and big construction projects. 

• Shanghai Zhida Technology Development Co Ltd (SZTD HK) is looking to raise about US$130m in its upcoming Hong Kong IPO. Shenwan Hongyuan is the sole bookrunner.
• Shanghai Zhida Technology Development (SZTD) is a provider of electric vehicle (EV) home charging solutions.
• As per F&S, the firm was the world’s largest provider of EV home charging solutions in terms of sales volume of home EV chargers over its track record period.

• Plug Power’s Q4 earnings revealed both positive developments and challenges that the company faced during the quarter.
• Key highlights were its innovative green hydrogen projects and ongoing advancements in improving cash management, positively reflecting the company’s commitment towards a sustainable energy future.
• Plug Power’s most significant achievement during the Q4 period was the launch of their Georgia plant.

• The financial results were strong, as shown in the table below, and exceeded the company’s forecasts.
• The M&A Advisory Business was particularly strong in the 4Q, recovering from soft sales slightly down in the first 3 quarters, returning to 8% growth YoY in the 4Q.
• Sales by other main business segments remained firm, with the Management Consulting Business rising 17% YoY and the Revitalization Support Business up 174% YoY .

• The EMCOR Group reported an exceptional fourth quarter and a very strong 2023 overall.
• Revenue for the fourth quarter was $3.44 billion with an operating margin of 8.4%, significantly exceeding expectations and indicating 16.2% organic revenue growth.
• The total revenue for 2023 was $12.6 billion which demonstrates growth of 13.6% and was strictly organic in nature, with a 55% rise in operating income to $875.8 million for the year.

• kopi-C with BRC Asia’s CEO: “We’ve become the leader in Singapore’s reinforcing steel fabrication industry’” After becoming one of Singapore’s largest reinforcing steel fabricators through an acquisition, BRC Asia plans to extend its reach to other markets.
• Incorporated in 1938, BRC Asia Limited (“BRC”) is a leading Pan-Asia prefabricated reinforcing steel solutions provider headquartered in Singapore and listed on the Singapore Stock Exchange.

• Since the US$260 million secondary placement announcement, Nippon Express Holdings (9147 JP) shares are down 5.3% from the undisturbed price of JPY8,039 per share (1 March).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Nippon Express shares have followed the pattern of previous large placements.
• The offering will likely be priced on 11 March. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• COPRO-HOLDINGS. Co., Ltd., (COPRO) announced its 3Q FY24/3 (9 months) results.
• Key consolidated figures included net sales of ¥17,496 mn (+28.8% YoY), operating profit of ¥1,406 mn (+63.0% YoY), ordinary profit of ¥ 1,480 mn (+70.8% YoY), and profit attributable to owners of parent of ¥936 mn (+79.7% YoY).
• COPRO-CONSTRUCTION. Co., Ltd., (formerly COPRO-ENGINEERED), which operates the Company‘s core business of construction technician dispatching, proactively increased the number of recruits amid the chronically serious shortage of labor against the backdrop of regulations capping overtime work to start in April 2024 and big construction projects. 

• Shanghai Zhida Technology Development Co Ltd (SZTD HK) is looking to raise about US$130m in its upcoming Hong Kong IPO. Shenwan Hongyuan is the sole bookrunner.
• Shanghai Zhida Technology Development (SZTD) is a provider of electric vehicle (EV) home charging solutions.
• As per F&S, the firm was the world’s largest provider of EV home charging solutions in terms of sales volume of home EV chargers over its track record period.

• Plug Power’s Q4 earnings revealed both positive developments and challenges that the company faced during the quarter.
• Key highlights were its innovative green hydrogen projects and ongoing advancements in improving cash management, positively reflecting the company’s commitment towards a sustainable energy future.
• Plug Power’s most significant achievement during the Q4 period was the launch of their Georgia plant.

• The financial results were strong, as shown in the table below, and exceeded the company’s forecasts.
• The M&A Advisory Business was particularly strong in the 4Q, recovering from soft sales slightly down in the first 3 quarters, returning to 8% growth YoY in the 4Q.
• Sales by other main business segments remained firm, with the Management Consulting Business rising 17% YoY and the Revitalization Support Business up 174% YoY .

• The EMCOR Group reported an exceptional fourth quarter and a very strong 2023 overall.
• Revenue for the fourth quarter was $3.44 billion with an operating margin of 8.4%, significantly exceeding expectations and indicating 16.2% organic revenue growth.
• The total revenue for 2023 was $12.6 billion which demonstrates growth of 13.6% and was strictly organic in nature, with a 55% rise in operating income to $875.8 million for the year.

• kopi-C with BRC Asia’s CEO: “We’ve become the leader in Singapore’s reinforcing steel fabrication industry’” After becoming one of Singapore’s largest reinforcing steel fabricators through an acquisition, BRC Asia plans to extend its reach to other markets.
• Incorporated in 1938, BRC Asia Limited (“BRC”) is a leading Pan-Asia prefabricated reinforcing steel solutions provider headquartered in Singapore and listed on the Singapore Stock Exchange.

• Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
• The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback. 
• Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It’s pretty clear.

• Our base case valuation of Angel Robotics is target price of 20,277 won per share, which represents a 35% upside from the high end of the IPO price range. 
• We estimate sales of 9 billion won in 2024 (up 75.2% YoY) and 14.9 billion won in 2025 (up 65.3% YoY). Our estimates are more conservative than the company’s estimates.
• We like the strong sales growth of Angel Robotics. Many investors are likely to view this positively in this IPO. LG Electronics and Samsung Electronics are customers of Angel Robotics. 

• Shanghai REFIRE Group (SRG) is looking to raise around US$100m in its upcoming Hong Kong IPO. The bookrunner for the deal is CICC.
• SRG designs, develops, manufactures, and sells hydrogen fuel cell systems, hydrogen production systems, and related components, as well as provides fuel cell engineering and technical services.
• According to Frost & Sullivan (F&S), it ranked first in the hydrogen fuel cell system market in China, with a market share of 25.9%.

• This is our first report on transportation and fintech platform provider, Grab Holdings Inc.
• The company had a pivotal year in 2023, delivering on key goals and achieving profitability in adjusted EBITDA since the third quarter and earning a positive net profit in the fourth quarter.
• The company experienced a series of enhancements, including a successful rebuild of their mobility business which had been vastly impacted by the pandemic.

• The 72.5% decline in SITC International (1308 HK)‘s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.  
• Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.
• Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.

• Trex Company, the outdoor living products manufacturer reported solid performance for both the quarter and full year 2023, surpassing their revenue guidance.
• The strong results were credited to its mid-single-digit channel sell-through growth and new product offerings, demonstrating the strength and resilience of the Trex brand.
• In the fourth quarter, the company introduced numerous products that expanded its portfolio in existing categories and extended into complementary adjacencies.

• In its recent results, Heico is showing a significant growth trajectory in its recent financial results.
• This growth can be attributed to a couple of key factors, but there are also a number of risks and potential downsides that investors should be aware of.
• In terms of positives, HEICO’s first quarter of fiscal 2024 showed dramatic improvement over the first quarter of fiscal 2023.

• According to Expansion, the Hungarian Ganz-MaVag Euroe Zrt consortium is giving final touches to the offer for Talgo SA (TLGO SM) after obtaining verbal approval from the lenders.
• The Minister of Transport assured that the Spanish Government will do everything possible to prevent the consortium from taking over Talgo due to hidden interests of the Viktor Órban Government.
• However, the Government would need to justify its decision thoroughly to avoid potential legal challenges. For now, I would remain in the sidelines due to uncertainties about development and timing.

Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m increase in technology capex, which depressed the adjusted free cash outflow before disposals to £116m (£42.4m outflow in FY22). Despite these challenges, the implementation of a rigorous cost efficiency programme and the strategic divestment of non-core assets have the potential to fuel a turnaround. Some £160m of annualised cost savings are expected to be realised by mid-2025 (part reinvested for growth), aimed at bolstering a significant improvement in operating margins. As margins improve, shifting to faster-growing market segments with a more competitive cost base could catalyse a reduction in the valuation discount.

• Republic Services (RSG) had a strong finish to 2023 highlighting its successful strategy designed for business growth.
• The company’s revenue for the year grew by 11%, which includes a 5% increase from its acquisitions.
• RSG generated 13% adjusted EBITDA growth and margin expansion of 60 basis points, as well as reporting adjusted earnings per share of $5.61.

• Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
• The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback. 
• Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It’s pretty clear.

• Our base case valuation of Angel Robotics is target price of 20,277 won per share, which represents a 35% upside from the high end of the IPO price range. 
• We estimate sales of 9 billion won in 2024 (up 75.2% YoY) and 14.9 billion won in 2025 (up 65.3% YoY). Our estimates are more conservative than the company’s estimates.
• We like the strong sales growth of Angel Robotics. Many investors are likely to view this positively in this IPO. LG Electronics and Samsung Electronics are customers of Angel Robotics. 

• Shanghai REFIRE Group (SRG) is looking to raise around US$100m in its upcoming Hong Kong IPO. The bookrunner for the deal is CICC.
• SRG designs, develops, manufactures, and sells hydrogen fuel cell systems, hydrogen production systems, and related components, as well as provides fuel cell engineering and technical services.
• According to Frost & Sullivan (F&S), it ranked first in the hydrogen fuel cell system market in China, with a market share of 25.9%.

• This is our first report on transportation and fintech platform provider, Grab Holdings Inc.
• The company had a pivotal year in 2023, delivering on key goals and achieving profitability in adjusted EBITDA since the third quarter and earning a positive net profit in the fourth quarter.
• The company experienced a series of enhancements, including a successful rebuild of their mobility business which had been vastly impacted by the pandemic.

• The 72.5% decline in SITC International (1308 HK)‘s FY23 earnings is disappointing but should already reflected in the share price given the profit warning. Instead, this may be the trough.  
• Spot freight rates for key intra-Asia routes have already recovered since 3Q23, with the YTD level higher than the 2H23 average. The 1H24 result may show a sequential rebound.
• Even assuming flat YoY earnings in FY24, it still sits on a 9% dividend yield. The projected ROE of over 24% and net cash position mean 1.6-1.7x P/B undemanding.

• Trex Company, the outdoor living products manufacturer reported solid performance for both the quarter and full year 2023, surpassing their revenue guidance.
• The strong results were credited to its mid-single-digit channel sell-through growth and new product offerings, demonstrating the strength and resilience of the Trex brand.
• In the fourth quarter, the company introduced numerous products that expanded its portfolio in existing categories and extended into complementary adjacencies.

• In its recent results, Heico is showing a significant growth trajectory in its recent financial results.
• This growth can be attributed to a couple of key factors, but there are also a number of risks and potential downsides that investors should be aware of.
• In terms of positives, HEICO’s first quarter of fiscal 2024 showed dramatic improvement over the first quarter of fiscal 2023.

• According to Expansion, the Hungarian Ganz-MaVag Euroe Zrt consortium is giving final touches to the offer for Talgo SA (TLGO SM) after obtaining verbal approval from the lenders.
• The Minister of Transport assured that the Spanish Government will do everything possible to prevent the consortium from taking over Talgo due to hidden interests of the Viktor Órban Government.
• However, the Government would need to justify its decision thoroughly to avoid potential legal challenges. For now, I would remain in the sidelines due to uncertainties about development and timing.

Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m increase in technology capex, which depressed the adjusted free cash outflow before disposals to £116m (£42.4m outflow in FY22). Despite these challenges, the implementation of a rigorous cost efficiency programme and the strategic divestment of non-core assets have the potential to fuel a turnaround. Some £160m of annualised cost savings are expected to be realised by mid-2025 (part reinvested for growth), aimed at bolstering a significant improvement in operating margins. As margins improve, shifting to faster-growing market segments with a more competitive cost base could catalyse a reduction in the valuation discount.

• Republic Services (RSG) had a strong finish to 2023 highlighting its successful strategy designed for business growth.
• The company’s revenue for the year grew by 11%, which includes a 5% increase from its acquisitions.
• RSG generated 13% adjusted EBITDA growth and margin expansion of 60 basis points, as well as reporting adjusted earnings per share of $5.61.