Industrials

• Shriram Pistons & Rings Ltd (SPRL IN) is into the business of manufacturing auto components including pistons, piston pins and rings, engine valves, electric motors etc. 
• On an overall scheme of things, balance sheet and forensics look good and healthy. 
• However, one must pay attention to goodwill and related assumptions; one of the recent acquisitions has turned loss making.

• Shriram Pistons & Rings Ltd (SPRL IN) is into the business of manufacturing auto components including pistons, piston pins and rings, engine valves, electric motors etc. 
• On an overall scheme of things, balance sheet and forensics look good and healthy. 
• However, one must pay attention to goodwill and related assumptions; one of the recent acquisitions has turned loss making.

• Varindera Constructions Ltd (1606813D IN)  is looking to raise about US$143m in its upcoming India IPO. The deal will be run by ICICI, Equirus and IIFL.
• Varindera Constructions Limited (VCL) is an integrated engineering, procurement and construction (EPC) company undertaking construction projects with a focus on building constructions.
• According to the CRISIL Report, it was one of the fastest growing construction companies in terms of revenue from operations, compared to major listed construction companies, over FY19-24.

• Revenue for Q1 FY05/25 was JPY3.1bn, a decrease of 3.9% YoY, with an operating loss of JPY1.1bn.
• Orders received in Q1 FY05/25 totaled JPY9.0bn, an 8.4% YoY decrease, aligning with initial expectations.
• Full-year earnings forecast remains unchanged due to stable production performance and order backlog, despite uncertain subsidiary impact.

• Revenue increased 15.0% YoY to JPY13.2bn, driven by strong performance in Emergency and Preventive Maintenance Services.
• Operating profit rose 22.5% YoY to JPY921mn, with an operating profit margin increase of 0.4pp to 7.0%.
• The company expanded market share by acquiring new customers and projects, focusing on air conditioning and ventilation systems.

• SiteOne Landscape Supply reported mixed results for its second quarter of 2024, showcasing a combination of slight setbacks in organic sales growth against strategic gains through acquisitions and operational enhancements.
• The company, which is a leading wholesale distributor of landscaping products, is dealing with a softer demand landscape influenced by a tepid repair and upgrade market and noticeable commodity price deflation in specific segments such as grass seed and PVC pipe.
• The management anticipates these trends to persist throughout the year, which they expect will impact organic sales growth and adjusted EBITDA margin negatively.

• SYM) announced it would place automation system at two distribution centers being built by Walmex. Mexico would be brand new market for SYM, but the relationship with WMT is not. 
• The distribution centers SYM is poised to initially go into were announced in 2022. The 2022 news includes timing of the distribution centers in Tlaxcala and El Bajio.
• The rate of systems being accepted slowed in the third quarter. We continue to believe this could become the primary headwind for SYM’s quarterly report and stock price. 

• Varindera Constructions Ltd (1606813D IN)  is looking to raise about US$143m in its upcoming India IPO. The deal will be run by ICICI, Equirus and IIFL.
• Varindera Constructions Limited (VCL) is an integrated engineering, procurement and construction (EPC) company undertaking construction projects with a focus on building constructions.
• According to the CRISIL Report, it was one of the fastest growing construction companies in terms of revenue from operations, compared to major listed construction companies, over FY19-24.

• Revenue for Q1 FY05/25 was JPY3.1bn, a decrease of 3.9% YoY, with an operating loss of JPY1.1bn.
• Orders received in Q1 FY05/25 totaled JPY9.0bn, an 8.4% YoY decrease, aligning with initial expectations.
• Full-year earnings forecast remains unchanged due to stable production performance and order backlog, despite uncertain subsidiary impact.

• Revenue increased 15.0% YoY to JPY13.2bn, driven by strong performance in Emergency and Preventive Maintenance Services.
• Operating profit rose 22.5% YoY to JPY921mn, with an operating profit margin increase of 0.4pp to 7.0%.
• The company expanded market share by acquiring new customers and projects, focusing on air conditioning and ventilation systems.

• SiteOne Landscape Supply reported mixed results for its second quarter of 2024, showcasing a combination of slight setbacks in organic sales growth against strategic gains through acquisitions and operational enhancements.
• The company, which is a leading wholesale distributor of landscaping products, is dealing with a softer demand landscape influenced by a tepid repair and upgrade market and noticeable commodity price deflation in specific segments such as grass seed and PVC pipe.
• The management anticipates these trends to persist throughout the year, which they expect will impact organic sales growth and adjusted EBITDA margin negatively.

• SYM) announced it would place automation system at two distribution centers being built by Walmex. Mexico would be brand new market for SYM, but the relationship with WMT is not. 
• The distribution centers SYM is poised to initially go into were announced in 2022. The 2022 news includes timing of the distribution centers in Tlaxcala and El Bajio.
• The rate of systems being accepted slowed in the third quarter. We continue to believe this could become the primary headwind for SYM’s quarterly report and stock price. 

• It’s unclear if this will turn into a tender offer battle like Korea Zinc, and we need to assess both sides’ financial strength carefully.
• Today’s reports suggest Sono has more financial flexibility than T’way Holdings, but we should be cautious. T’way Air might also consider buying back shares with borrowed funds.
• T’way Air has fewer institutional investors and more available float than Korea Zinc, suggesting significant price swings and an attractive trading setup, as seen in today’s volume spike.

• In the past several days, there have been an increased speculation in the local media about a potential M&A fight for T’Way Air between Yearimdang Publishing and Daemyung Sono Group. 
• The difference in ownership of T’Way Air by Daemyung Sono Group and Yearimdang Group is only 3.2%, which could lead to an intensified management rights dispute. 
• According to local sources, Daemyung Sono Group has recently contacted several law firms to review plans to potentially conduct a tender offer on T’Way Air. 

• Jiangsu Guofu (1628452D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Haitong International, CLSA, CCB International and China Securities.
• Jiangsu Guofu is a leading hydrogen energy storage and transport equipment manufacturer in China.
• It develops and manufactures hydrogen energy core equipment used in the entire industrial value chain of hydrogen energy, consisting of production, storage, transportation, refueling and use.

• Aditya Infotech Ltd (6596564Z IN) is looking to raise about US$155m in its upcoming India IPO. The deal will be run by ICICI and IIFL.
• It is a CCTV/video surveillance provider company offering a range of advanced video security and surveillance products, technologies and solutions for enterprise and consumer segments under its CP PLUS brand.
• According to the F&S report, it was the largest Indian-owned company offering video security and surveillance products, solutions and services, in terms of revenues in FY24.

• Checkmate, a provider of pre-employment screening solutions in New Zealand, has completed its US$1.6 million seed funding round from Wavemaker Partners.
• The capital will fuel Checkmate’s expansion into existing and new markets, including Australia, the US, and Southeast Asia, specifically the Philippines.
• The funds will also support improvements in the company’s technological capabilities and user experience as more organisations seek reliable and efficient pre-employment screening.

• Waste Connections (WCN) is the third largest solid waste company in North America with strong EBITDA margins and free cash flow conversion
• WCN strategically targets less competitive secondary or rural markets to achieve dominant market shares
• WCN operates in monopolistic or oligopolistic market structures in 90% of its markets, making it a solid all-weather investment option despite its premium valuation

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.

• AZEK Company’s fiscal third quarter of 2024 earnings results demonstrated robust performance, propelled by strategic growth initiatives and market-focused optimization.
• A 12% net sales increase year-over-year was reported, with the residential segment, excluding the divested Vycom business, seeing an 18% growth.
• This segment benefited significantly from strong demand across Deck, Rail, and Accessories.

• Sales increased by JPY580mn (+2.3% YoY), driven by growth in Creative (Japan) and Other sectors, despite project reductions.
• Operating profit decreased by JPY407mn (-15.6% YoY), impacted by development costs and reduced profits in most segments except Creative (South Korea).
• Medical Principle’s sales and operating profit decreased YoY due to reduced COVID-19 projects and structural reforms.

• GMS Inc., a leading distributor of wallboard and suspended ceilings systems, reported mixed financial results for the first quarter of Fiscal 2025.
• The company experienced a slight increase in net sales, reaching $1.45 billion, a 2.8% rise compared to the same period a year ago.
• This growth was primarily driven by volume growth across all four major product categories, which was largely attributed to recent acquisitions.

• Griffon Corporation recently reported its fiscal third quarter 2024 earnings.
• On the positive front, Griffon Corporation reported strong operating performances in its two main segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP).
• HBP achieved an impressive EBITDA margin of 30.1%, demonstrating robust profitability despite a challenging market environment characterized by softening in the commercial sector.

• It’s unclear if this will turn into a tender offer battle like Korea Zinc, and we need to assess both sides’ financial strength carefully.
• Today’s reports suggest Sono has more financial flexibility than T’way Holdings, but we should be cautious. T’way Air might also consider buying back shares with borrowed funds.
• T’way Air has fewer institutional investors and more available float than Korea Zinc, suggesting significant price swings and an attractive trading setup, as seen in today’s volume spike.

• In the past several days, there have been an increased speculation in the local media about a potential M&A fight for T’Way Air between Yearimdang Publishing and Daemyung Sono Group. 
• The difference in ownership of T’Way Air by Daemyung Sono Group and Yearimdang Group is only 3.2%, which could lead to an intensified management rights dispute. 
• According to local sources, Daemyung Sono Group has recently contacted several law firms to review plans to potentially conduct a tender offer on T’Way Air. 

• Jiangsu Guofu (1628452D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Haitong International, CLSA, CCB International and China Securities.
• Jiangsu Guofu is a leading hydrogen energy storage and transport equipment manufacturer in China.
• It develops and manufactures hydrogen energy core equipment used in the entire industrial value chain of hydrogen energy, consisting of production, storage, transportation, refueling and use.

• Aditya Infotech Ltd (6596564Z IN) is looking to raise about US$155m in its upcoming India IPO. The deal will be run by ICICI and IIFL.
• It is a CCTV/video surveillance provider company offering a range of advanced video security and surveillance products, technologies and solutions for enterprise and consumer segments under its CP PLUS brand.
• According to the F&S report, it was the largest Indian-owned company offering video security and surveillance products, solutions and services, in terms of revenues in FY24.

• Checkmate, a provider of pre-employment screening solutions in New Zealand, has completed its US$1.6 million seed funding round from Wavemaker Partners.
• The capital will fuel Checkmate’s expansion into existing and new markets, including Australia, the US, and Southeast Asia, specifically the Philippines.
• The funds will also support improvements in the company’s technological capabilities and user experience as more organisations seek reliable and efficient pre-employment screening.

• Waste Connections (WCN) is the third largest solid waste company in North America with strong EBITDA margins and free cash flow conversion
• WCN strategically targets less competitive secondary or rural markets to achieve dominant market shares
• WCN operates in monopolistic or oligopolistic market structures in 90% of its markets, making it a solid all-weather investment option despite its premium valuation

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.

• AZEK Company’s fiscal third quarter of 2024 earnings results demonstrated robust performance, propelled by strategic growth initiatives and market-focused optimization.
• A 12% net sales increase year-over-year was reported, with the residential segment, excluding the divested Vycom business, seeing an 18% growth.
• This segment benefited significantly from strong demand across Deck, Rail, and Accessories.

• Sales increased by JPY580mn (+2.3% YoY), driven by growth in Creative (Japan) and Other sectors, despite project reductions.
• Operating profit decreased by JPY407mn (-15.6% YoY), impacted by development costs and reduced profits in most segments except Creative (South Korea).
• Medical Principle’s sales and operating profit decreased YoY due to reduced COVID-19 projects and structural reforms.

• GMS Inc., a leading distributor of wallboard and suspended ceilings systems, reported mixed financial results for the first quarter of Fiscal 2025.
• The company experienced a slight increase in net sales, reaching $1.45 billion, a 2.8% rise compared to the same period a year ago.
• This growth was primarily driven by volume growth across all four major product categories, which was largely attributed to recent acquisitions.

• Griffon Corporation recently reported its fiscal third quarter 2024 earnings.
• On the positive front, Griffon Corporation reported strong operating performances in its two main segments: Home and Building Products (HBP) and Consumer and Professional Products (CPP).
• HBP achieved an impressive EBITDA margin of 30.1%, demonstrating robust profitability despite a challenging market environment characterized by softening in the commercial sector.

• NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
• In this insight, we take a look at the names leading the race to become ADDs/DELs for these  indices in the March 2025 index rebal event.
• There are no changes for NIFTY 50 but there could be four changes for NIFTY Next 50 according to current rankings.

• In the process of transferring Doosan Bobcat shares held by Doosan Enerbility to Doosan Robotics, there are increasing concerns about negatively impacting minority shareholders of Doosan Enerbility. 
• This current restructuring structure could potentially benefit the Park family/relatives which is the largest shareholder group of Doosan Corp but could negatively impact minority shareholders of Doosan Enerbility. 
• On 25 September, Doosan Enerbility announced that 10 October will be the shareholder confirmation date (shareholder register closing date) for the spin-off NEWCO merger agreement with Doosan Robotics.

• China Conch Venture (586 HK) shares are down 20% the past two days. Anhui Conch Cement (600585 CH) is down ~8% today. CCV’s implied stub is toward the historical low-end.
• Preceding my comments on China Conch/Anhui are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• TRS has three operating segments where the smallest has already been going through a sales restructuring period and we are now expecting a slowdown in TRS’s aerospace business.  
• Aerospace had been growing at double-digit rates in recent years, but in recent months the two largest aerospace customers have been going through their own ordeals
• TRS’s current valuation gives little value for what each segment could be worth. There have been two aerospace IPOs with similar businesses to TRS’s aerospace business. 

• Sales increased YoY across multiple segments, driven by price revisions and new contracts, despite rising costs.
• Aeon Delight’s medium-term plan focuses on efficiency, consulting capabilities, and expanding the Construction Work business.
• The company plans JPY20.0bn investment in productivity, new services, and human capital for sustained growth.

• Revenue for 1H FY02/25 was JPY24.4bn, a 9.4% YoY increase, surpassing the company forecast of JPY23.9bn.
• Operating profit rose 53.0% YoY to JPY1.6bn, exceeding the forecast of JPY1.0bn, with OPM at 6.4%.
• Net income attributable to owners surged 82.0% YoY to JPY1.2bn, surpassing the forecast of JPY705mn.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Scan Global Logistics’ ESG as “Adequate”, in line with the Environmental and Governance scores, while the Social score is “Strong”. Controversies are “Immaterial” and Disclosure is “Adequate”.

• NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
• In this insight, we take a look at the names leading the race to become ADDs/DELs for these  indices in the March 2025 index rebal event.
• There are no changes for NIFTY 50 but there could be four changes for NIFTY Next 50 according to current rankings.

• In the process of transferring Doosan Bobcat shares held by Doosan Enerbility to Doosan Robotics, there are increasing concerns about negatively impacting minority shareholders of Doosan Enerbility. 
• This current restructuring structure could potentially benefit the Park family/relatives which is the largest shareholder group of Doosan Corp but could negatively impact minority shareholders of Doosan Enerbility. 
• On 25 September, Doosan Enerbility announced that 10 October will be the shareholder confirmation date (shareholder register closing date) for the spin-off NEWCO merger agreement with Doosan Robotics.

• China Conch Venture (586 HK) shares are down 20% the past two days. Anhui Conch Cement (600585 CH) is down ~8% today. CCV’s implied stub is toward the historical low-end.
• Preceding my comments on China Conch/Anhui are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• TRS has three operating segments where the smallest has already been going through a sales restructuring period and we are now expecting a slowdown in TRS’s aerospace business.  
• Aerospace had been growing at double-digit rates in recent years, but in recent months the two largest aerospace customers have been going through their own ordeals
• TRS’s current valuation gives little value for what each segment could be worth. There have been two aerospace IPOs with similar businesses to TRS’s aerospace business. 

• Sales increased YoY across multiple segments, driven by price revisions and new contracts, despite rising costs.
• Aeon Delight’s medium-term plan focuses on efficiency, consulting capabilities, and expanding the Construction Work business.
• The company plans JPY20.0bn investment in productivity, new services, and human capital for sustained growth.

• Revenue for 1H FY02/25 was JPY24.4bn, a 9.4% YoY increase, surpassing the company forecast of JPY23.9bn.
• Operating profit rose 53.0% YoY to JPY1.6bn, exceeding the forecast of JPY1.0bn, with OPM at 6.4%.
• Net income attributable to owners surged 82.0% YoY to JPY1.2bn, surpassing the forecast of JPY705mn.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Scan Global Logistics’ ESG as “Adequate”, in line with the Environmental and Governance scores, while the Social score is “Strong”. Controversies are “Immaterial” and Disclosure is “Adequate”.

• China Boqi Environmental Hol (2377 HK), a flue gas treatment play in China, is suspended pursuant to the Takeovers Code.
• Co-Founders Zeng Zhijun (27.71%, chairman) and Richard Cheng (16.76%, NED) collectively hold 44.47%. However, they had a falling out in January 2021, and probably won’t jointly bid. Individually, maybe.
• China Petroleum & Chemical (386 HK) (a.k.a. Sinopec) holds 10.97% and could make a move to secure control.

• The $SPX continues to hold below 5783, the upper-end of an important target/resistance area (5670-5783) we’ve discussed since our 8/13/24 Compass, just after SPX hit our 5100-5191 “expected pullback zone.”
• The current “breakout” above 5670 is an extraordinarily weak one, which suggests a false breakout/bull trap is brewing; SPX has spent nearly three weeks above 5670, with zero upside follow-through.
• As long as the SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives.

• Credit Bureau Asia (CBA SP) subscription-based services and transaction fees generate consistent, recurring revenue from financial institutions and other businesses, ensuring significant financial stability and strong financial metrics.
• Regulatory relationships, vast data repositories, and long-standing client relationships and contracts create significant competitive advantages and protect market share.
• If markets can get comfortable with this microcap delivering 3% long-term growth forecast and sustainability of current operating and financial metrics the stock should see at least100% upside.  

• Resideo Technologies showcased robust financial performance in its second quarter of 2024, significantly surpassing its expected earnings outlook.
• The company reported an adjusted EBITDA of $175 million, considerably ahead of its forecasted range, reflecting a strong operational execution across its divisions.
• Notably, the Products & Solutions segment achieved a remarkable adjusted EBITDA margin of 24.8%, an increase of 460 basis points from the previous year, driven by gross margins that surpassed 41%.

• We are reiterating our Buy Rating, $8 price target and projections for urban-gro, as the company continues to register material progress, which we believe will become more obvious going forward.
• Further, while we view the potential for Florida to legalize recreational cannabis as a key positive catalyst, we do not believe it will be the only potential upside driver for urban-gro, as the company has continued to make material progress on the commercial side of the business, leveraging their turnkey services to gain market share and deeper competitive advantages.
• As such, and, we believe, with the company on track to become fully current in their financial filings, we reiterate our Buy rating and $8 price target for UGRO.

• Acuity Brands’ fiscal 2024 fourth quarter results display a robust performance characterized by solid sales growth, margin expansion, and increased profitability across its principal operational segments—Lighting and Intelligent Spaces.
• The company’s strategic initiatives have bolstered operational productivity and enhanced its product offerings, evidenced by its notable revenue increase to $1 billion, which marks a 2% rise from the previous year.
• This growth was significantly contributed by both the Lighting and Intelligent Spaces segments, demonstrating the effectiveness of Acuity Brands’ diversified business approach.

• Simpson Manufacturing Company’s second quarter 2024 financial results depict a mixed picture amidst a challenging housing market.
• Delving deeper, the company reported net sales of $597 million, which is consistent with the prior year’s quarter.
• This stability in sales underscores the company’s resilience in a turbulent market.

• China Boqi Environmental Hol (2377 HK), a flue gas treatment play in China, is suspended pursuant to the Takeovers Code.
• Co-Founders Zeng Zhijun (27.71%, chairman) and Richard Cheng (16.76%, NED) collectively hold 44.47%. However, they had a falling out in January 2021, and probably won’t jointly bid. Individually, maybe.
• China Petroleum & Chemical (386 HK) (a.k.a. Sinopec) holds 10.97% and could make a move to secure control.

• The $SPX continues to hold below 5783, the upper-end of an important target/resistance area (5670-5783) we’ve discussed since our 8/13/24 Compass, just after SPX hit our 5100-5191 “expected pullback zone.”
• The current “breakout” above 5670 is an extraordinarily weak one, which suggests a false breakout/bull trap is brewing; SPX has spent nearly three weeks above 5670, with zero upside follow-through.
• As long as the SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives.

• Credit Bureau Asia (CBA SP) subscription-based services and transaction fees generate consistent, recurring revenue from financial institutions and other businesses, ensuring significant financial stability and strong financial metrics.
• Regulatory relationships, vast data repositories, and long-standing client relationships and contracts create significant competitive advantages and protect market share.
• If markets can get comfortable with this microcap delivering 3% long-term growth forecast and sustainability of current operating and financial metrics the stock should see at least100% upside.  

• Resideo Technologies showcased robust financial performance in its second quarter of 2024, significantly surpassing its expected earnings outlook.
• The company reported an adjusted EBITDA of $175 million, considerably ahead of its forecasted range, reflecting a strong operational execution across its divisions.
• Notably, the Products & Solutions segment achieved a remarkable adjusted EBITDA margin of 24.8%, an increase of 460 basis points from the previous year, driven by gross margins that surpassed 41%.

• We are reiterating our Buy Rating, $8 price target and projections for urban-gro, as the company continues to register material progress, which we believe will become more obvious going forward.
• Further, while we view the potential for Florida to legalize recreational cannabis as a key positive catalyst, we do not believe it will be the only potential upside driver for urban-gro, as the company has continued to make material progress on the commercial side of the business, leveraging their turnkey services to gain market share and deeper competitive advantages.
• As such, and, we believe, with the company on track to become fully current in their financial filings, we reiterate our Buy rating and $8 price target for UGRO.

• Acuity Brands’ fiscal 2024 fourth quarter results display a robust performance characterized by solid sales growth, margin expansion, and increased profitability across its principal operational segments—Lighting and Intelligent Spaces.
• The company’s strategic initiatives have bolstered operational productivity and enhanced its product offerings, evidenced by its notable revenue increase to $1 billion, which marks a 2% rise from the previous year.
• This growth was significantly contributed by both the Lighting and Intelligent Spaces segments, demonstrating the effectiveness of Acuity Brands’ diversified business approach.

• Simpson Manufacturing Company’s second quarter 2024 financial results depict a mixed picture amidst a challenging housing market.
• Delving deeper, the company reported net sales of $597 million, which is consistent with the prior year’s quarter.
• This stability in sales underscores the company’s resilience in a turbulent market.