Industrials

• In More Hong Kong Stocks Priced For Liquidation, I flagged thirteen stocks the market is all-but implying are priced for liquidation. 
• One of the cut-off points in that analysis was a requirement for stocks to trade at least US$1mn/day. Removing that constraint uncovers shipping services play COSCO International Holdings (517 HK) (CSI).
• CSI’s market cap accounts for ~86% of its 1H23 net cash position. Earlier this month, CSI announced another positive profit warning. Those numbers should be out late-March.

• LG Display’s tight stock rights trading prompts a need to assess potential trading opportunities. Taihan Electric Wire’s concurrent capital increase warrants close observation.
• Watch for a potentially wider spread in Taihan Electric Wire’s stock rights trading from the 22nd, given local institutional demand focus on LG Display may create a buying vacuum.
• Observers speculate on a CJ CGV-like pattern at LG Display. With no current market movements, predicting such a scenario is difficult. Nonetheless, I’ll monitor closely and share any developments.

• 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 forgettable 8.6% premium to last close.
• This Voluntary Offer followed by a Merger by Absorption requires shareholder approval and SAFE signing off. The SAFE condition was satisfied on the 26th Jan.
• Last night, CIMC announced the CBP investigation into the evasion of  U.S. anti-dumping and countervailing duties was extended. There is no mentioned in interim accounts or HKEx of this investigation.

• There is room for FY23 result of Cathay Pacific Airways (293 HK) to beat market expectations on stronger traffic volume and better yield performance.  
• Resumption of more capacity, from 70% of the pre-pandemic level at end-FY23, will drive FY24 earnings with ROE at 12-13%, putting it on an inexpensive 0.65x P/B. 
• Its associate Air China Ltd (H) (753 HK) will also benefit from the release of pent-up demand in the domestic market and the recovery in international travel. 

• The market seems to be dancing to its own tune and is likely to continue.
• EUREKAFO’s distributors are dissatisfied, MANYAVAR’s reported numbers failed to match up to the on-ground optimism. 
• LTFH’s “strong” retail playbook keeps performing, and SGMART’s website raises concerns about its operations. 

• We refresh estimates on AF-KLM, IAG, Lufthansa following Singapore Airlines’s effective profit warning, noting higher fuel prices make margin protection more difficult.
• Our 2024 EBIT estimates are 7% ahead of consensus at €2.0bn for AF-KLM, 6% ahead at €3.6bn for IAG and 5% behind at €2.5bn for Lufthansa.
• Lufthansa has highest-in-class capacity growth, with its biggest focus on APAC while APAC yield weakness prompts margin management concerns as ground handlers strike.

With November’s purchase of Astutis, January’s sale of MiExact and the proposed Healthcare business disposal, Wilmington is now firmly focused on opportunities within the large global governance, risk and compliance (GRC) market. The group’s significant cash resource should enable further M&A to accelerate growth across the GRC landscape, while investment in technology platforms and AI capabilities improves revenue and operating margin prospects in the core activities. H124 organic revenue growth (continuing business) was up 7%, with a 12% gain in adjusted EPS. FY24 results to June are expected in line with market forecasts. Given the improving quality of earnings we regard the valuation as undemanding.

• In More Hong Kong Stocks Priced For Liquidation, I flagged thirteen stocks the market is all-but implying are priced for liquidation. 
• One of the cut-off points in that analysis was a requirement for stocks to trade at least US$1mn/day. Removing that constraint uncovers shipping services play COSCO International Holdings (517 HK) (CSI).
• CSI’s market cap accounts for ~86% of its 1H23 net cash position. Earlier this month, CSI announced another positive profit warning. Those numbers should be out late-March.

• LG Display’s tight stock rights trading prompts a need to assess potential trading opportunities. Taihan Electric Wire’s concurrent capital increase warrants close observation.
• Watch for a potentially wider spread in Taihan Electric Wire’s stock rights trading from the 22nd, given local institutional demand focus on LG Display may create a buying vacuum.
• Observers speculate on a CJ CGV-like pattern at LG Display. With no current market movements, predicting such a scenario is difficult. Nonetheless, I’ll monitor closely and share any developments.

• 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 forgettable 8.6% premium to last close.
• This Voluntary Offer followed by a Merger by Absorption requires shareholder approval and SAFE signing off. The SAFE condition was satisfied on the 26th Jan.
• Last night, CIMC announced the CBP investigation into the evasion of  U.S. anti-dumping and countervailing duties was extended. There is no mentioned in interim accounts or HKEx of this investigation.

• There is room for FY23 result of Cathay Pacific Airways (293 HK) to beat market expectations on stronger traffic volume and better yield performance.  
• Resumption of more capacity, from 70% of the pre-pandemic level at end-FY23, will drive FY24 earnings with ROE at 12-13%, putting it on an inexpensive 0.65x P/B. 
• Its associate Air China Ltd (H) (753 HK) will also benefit from the release of pent-up demand in the domestic market and the recovery in international travel. 

• The market seems to be dancing to its own tune and is likely to continue.
• EUREKAFO’s distributors are dissatisfied, MANYAVAR’s reported numbers failed to match up to the on-ground optimism. 
• LTFH’s “strong” retail playbook keeps performing, and SGMART’s website raises concerns about its operations. 

• We refresh estimates on AF-KLM, IAG, Lufthansa following Singapore Airlines’s effective profit warning, noting higher fuel prices make margin protection more difficult.
• Our 2024 EBIT estimates are 7% ahead of consensus at €2.0bn for AF-KLM, 6% ahead at €3.6bn for IAG and 5% behind at €2.5bn for Lufthansa.
• Lufthansa has highest-in-class capacity growth, with its biggest focus on APAC while APAC yield weakness prompts margin management concerns as ground handlers strike.

With November’s purchase of Astutis, January’s sale of MiExact and the proposed Healthcare business disposal, Wilmington is now firmly focused on opportunities within the large global governance, risk and compliance (GRC) market. The group’s significant cash resource should enable further M&A to accelerate growth across the GRC landscape, while investment in technology platforms and AI capabilities improves revenue and operating margin prospects in the core activities. H124 organic revenue growth (continuing business) was up 7%, with a 12% gain in adjusted EPS. FY24 results to June are expected in line with market forecasts. Given the improving quality of earnings we regard the valuation as undemanding.

• SENKO Group Holdings Co., Ltd. (9069 JP) today announced large financial institutional cross-holders would sell shares in a Secondary Offering. There’s a buyback on the back end.
• Cross-Holding unwinding is the subject of the moment. It will continue to be so. It will involve selldowns, and buybacks. Study the model of what companies must do what. 
• In this case, Senko has a LOT of cross-holders and minimal excess cash. So investors buy more shares. But there is a buyback and index demand to come.

• Outsourcing Inc (2427 JP) delayed its earnings from 14 February to 19 February on tardiness in calculating impairment losses. That caused a short sharp shock in share price.
• An article came out suggesting it was a small number, and domestic biz EAS-related. Results today do not suggest EAS-related, and half is overseas. But no suggestion of precondition breach.
• For that, I think this probably goes through, and the EC FSR review period should end on 20 Feb so a deal announcement by Friday is eminently possible.

• Outsourcing Inc (2427 JP) has disclosed a weak 4Q materially below guidance due to cost overruns and JPY6,875 million in impairments. The results did not provide an update on Bain’s tender.
• The weak 4Q has raised concerns that Bain would reconsider terms. Our take is that the results will not warrant a change in the DCF valuation or breach a pre-condition. 
• Bain is likely to consider the results a reflection of near-term industry weakness rather than company-specific issues. The annualised spread for a March-end completion is 9.8%.

• Bizlink Holding (3665 TT) should be deleted from the Yuanta/​P-Shares Taiwan Dividend Plus ETF in March and that will trigger selling of over 8 days of ADV.
• There will be capping and funding flows due to the higher AUM and passive trackers will need to trade over 0.4x ADV in 5 stocks.
• Shorts have covered positions in Bizlink Holding (3665 TT) but there has been a recent uptick that could be linked to positioning for the rebalance.

• Employment and disability services play APM Human Services (APM AU) has rejected PE-outfit CVC Asia Pacific’s proposal, which valued APM at less than half of its November 2021 IPO price.
• APM confirmed it had received – on Friday, 16 February – a conditional and non-binding A$1.60/share indicative proposal. That’s a 93% premium to undisturbed. Yet, APM’s IPO Price was A$3.55/share.
• CVC – and other suitors – need to persuade executive chair and founder Megan Wynne and US private equity group Madison Dearborn, who collectively control ~65% of the company.

• In this insight, we take a look at Quiddity’s flow expectations for the March 2024 index rebal event.
• Today is the base date for the March 2024 index rebalance. Based on the closing prices today, I expect one DEL for the TDIV index in March 2024.
• Separately, I also expect the AUM assumption to be revised in March 2024.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 index rebal event.
• I expect one change for the T50 index and two other changes for the T100 index.
• The two T100 expected DELs are special because one could be a surprise deletion due to liquidity test failure and the other one is TDIV member with significant flow implications.

• SENKO Group Holdings Co., Ltd. (9069 JP) today announced large financial institutional cross-holders would sell shares in a Secondary Offering. There’s a buyback on the back end.
• Cross-Holding unwinding is the subject of the moment. It will continue to be so. It will involve selldowns, and buybacks. Study the model of what companies must do what. 
• In this case, Senko has a LOT of cross-holders and minimal excess cash. So investors buy more shares. But there is a buyback and index demand to come.

• Outsourcing Inc (2427 JP) delayed its earnings from 14 February to 19 February on tardiness in calculating impairment losses. That caused a short sharp shock in share price.
• An article came out suggesting it was a small number, and domestic biz EAS-related. Results today do not suggest EAS-related, and half is overseas. But no suggestion of precondition breach.
• For that, I think this probably goes through, and the EC FSR review period should end on 20 Feb so a deal announcement by Friday is eminently possible.

• Outsourcing Inc (2427 JP) has disclosed a weak 4Q materially below guidance due to cost overruns and JPY6,875 million in impairments. The results did not provide an update on Bain’s tender.
• The weak 4Q has raised concerns that Bain would reconsider terms. Our take is that the results will not warrant a change in the DCF valuation or breach a pre-condition. 
• Bain is likely to consider the results a reflection of near-term industry weakness rather than company-specific issues. The annualised spread for a March-end completion is 9.8%.

• Bizlink Holding (3665 TT) should be deleted from the Yuanta/​P-Shares Taiwan Dividend Plus ETF in March and that will trigger selling of over 8 days of ADV.
• There will be capping and funding flows due to the higher AUM and passive trackers will need to trade over 0.4x ADV in 5 stocks.
• Shorts have covered positions in Bizlink Holding (3665 TT) but there has been a recent uptick that could be linked to positioning for the rebalance.

• Employment and disability services play APM Human Services (APM AU) has rejected PE-outfit CVC Asia Pacific’s proposal, which valued APM at less than half of its November 2021 IPO price.
• APM confirmed it had received – on Friday, 16 February – a conditional and non-binding A$1.60/share indicative proposal. That’s a 93% premium to undisturbed. Yet, APM’s IPO Price was A$3.55/share.
• CVC – and other suitors – need to persuade executive chair and founder Megan Wynne and US private equity group Madison Dearborn, who collectively control ~65% of the company.

• In this insight, we take a look at Quiddity’s flow expectations for the March 2024 index rebal event.
• Today is the base date for the March 2024 index rebalance. Based on the closing prices today, I expect one DEL for the TDIV index in March 2024.
• Separately, I also expect the AUM assumption to be revised in March 2024.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 index rebal event.
• I expect one change for the T50 index and two other changes for the T100 index.
• The two T100 expected DELs are special because one could be a surprise deletion due to liquidity test failure and the other one is TDIV member with significant flow implications.

• There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.
• We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
• Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP), Lithium Power International (LPI AU), Altium Ltd (ALU AU). 
• Lowest spreads – Tietto Minerals Ltd (TIE AU), Pact Group Holdings (PGH AU), Orecorp Ltd (ORR AU), QV Equities Ltd (QVE AU), Yaizu Suisankagaku Industry (2812 JP). 

• Citic Ltd (267 HK) is a well-managed conglomerate trading at a big discount to its constituent parts
• Earnings should move up from here and pays a decent dividend while you wait.
• A member of both the the Hang Seng Index (HSI INDEX)  and the HSCCI and will attract inflows once institutional money returns

• Since mid-January, spreads have tightened, same as in December, across our European liquid universe of ordinary and preferred shares (13 have tightened, 6 widened).
• Recommended trades long preferred / short ordinary shares: Danieli, Grifols, Media-for-Europe, Sixt, Volkswagen.
• Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal, Roche.

• Keystone Law Group (KEYS) is a UK-based law firm utilizing a freelance-lawyer platform model.

• Its “pay-when-paid” policy and “work-from-anywhere” culture result in minimal invested capital, yielding high returns on capital and a structural competitive advantage over traditional equity-based law firms.

• With a 2023E free cash flow yield of approximately 6.8%, the shares are deemed fairly to slightly overvalued.

• Keisei Electric Railway Co (9009 JP) share price has increased but not run ahead of its fundamentals.
• Weak Yen, COVID rebound, friendlier visa policy by the Japanese government, and the potential for more Chinese tourists visiting Japan are tailwinds for Keisei.
• Valuation may look expensive, but with the high growth rate, investors should consider to use PEG rather than PER or PBR.

• There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.
• We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
• Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP), Lithium Power International (LPI AU), Altium Ltd (ALU AU). 
• Lowest spreads – Tietto Minerals Ltd (TIE AU), Pact Group Holdings (PGH AU), Orecorp Ltd (ORR AU), QV Equities Ltd (QVE AU), Yaizu Suisankagaku Industry (2812 JP). 

• Citic Ltd (267 HK) is a well-managed conglomerate trading at a big discount to its constituent parts
• Earnings should move up from here and pays a decent dividend while you wait.
• A member of both the the Hang Seng Index (HSI INDEX)  and the HSCCI and will attract inflows once institutional money returns

• Since mid-January, spreads have tightened, same as in December, across our European liquid universe of ordinary and preferred shares (13 have tightened, 6 widened).
• Recommended trades long preferred / short ordinary shares: Danieli, Grifols, Media-for-Europe, Sixt, Volkswagen.
• Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, SSAB Svenska Stal, Roche.

• Keystone Law Group (KEYS) is a UK-based law firm utilizing a freelance-lawyer platform model.

• Its “pay-when-paid” policy and “work-from-anywhere” culture result in minimal invested capital, yielding high returns on capital and a structural competitive advantage over traditional equity-based law firms.

• With a 2023E free cash flow yield of approximately 6.8%, the shares are deemed fairly to slightly overvalued.

• Keisei Electric Railway Co (9009 JP) share price has increased but not run ahead of its fundamentals.
• Weak Yen, COVID rebound, friendlier visa policy by the Japanese government, and the potential for more Chinese tourists visiting Japan are tailwinds for Keisei.
• Valuation may look expensive, but with the high growth rate, investors should consider to use PEG rather than PER or PBR.

• Renesas has acquired PCB electronic design company Altium and Gallium Nitride power device maker Transphorm. Its tender offer for Sequans Communications has been extended.
• These are positive developments in our view, but sales and profit margins were down in 4Q of FY Dec-23 and are expected to decline this quarter as well.
• On the other hand, inventory adjustment is proceeding and the share price has dropped 12.6% since last Tuesday. Buy on weakness for the longer term. 

• Based in Taiwan, Acter Co is capitalizing on its extensive experience of high-end cleanroom integration, recycling and regeneration systems, electromechanical engineering to generate consistent growth in earnings and cash flow.
• Acter Co’s dividend yield averaged 8.2% from 2019 to 2022. Its annual dividend payout averaged 76% in the same period. Estimated dividend yield is 7% in 2023. 
• We found Acter Co Ltd (5536 TT) using Smartkarma’s Smart Score Screener system. 

• Nobody “named” having >5.0% in Outsourcing (2427 JP); no public noise, the stock down; people won’t be fighting for a bump unless the delay and impairment are truly meaningless.
• Stay long MGM China Holdings (2282 HK) as its FY23 top line surpasses pre-Covid levels.
• Investors and risk arbitrageurs who are worried about the potential loss of the case to RF SUNY should simply avoid, or sell then avoid JSR Corp (4185 JP) shares.

• Enphase Energy Inc.’s fourth quarter 2023 financial results show a quarterly revenue of $302.6 million, a considerable shipment of 1.6 million microinverters and 80.7 megawatt hours of battery, along with a generation of free cash flow of $15.4 million.
• The company also achieved a reduction of $147 million in Q4, and met their goal of reducing channel inventory.
• The quarter saw a 50% gross margin, 29% operating expenses, and 22% operating income.

• Nvent Electric, a professional electrical solutions provider, reported Q4 2023 results with records in sales, margins, earnings, and cash flow proving a strong growth and execution for the full year.
• With the ongoing trends of electrification, sustainability, and digitalization, the company anticipates strong sales and profit growth for 2024.
• For Q4, the company witnessed a 16% increase in sales, with 2% organic growth, outperforming the previous year’s results.

• TransDigm Group Incorporated’s first quarter 2024 results beat expectations and they raised their sales and EBITDA guidance for the year.
• The commercial aerospace market trends remained favorable as the industry continued to recover and progress towards normalization.
• 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.

• The Uber Technologies Inc reported a strong Q4, with year-on-year trip growth of 24%, outpacing gross bookings growth for the fourth consecutive quarter.
• Overall, 2023 was a critical year for Uber, proving its ability to generate strong and profitable growth at scale.
• The adjusted EBITDA of $1.3 billion exceeded the Q4 outlook with GAAP operating income of $652 million.

• Emerson Electric Co., a provider of automation solutions for the process and discrete industries, has demonstrated strong first-quarter financial results for 2024, outpacing expectations.
• Positive operating leverage, robust demand in process and hybrid markets, CapEx budgets, and continued execution by the team are primary contributors to their quarterly performance.
• Gross margins and adjusted EBITDA expansion from 2021 are reflective of the company’s ability to create value.

• The Jacobs Fiscal First Quarter 2024 earnings demonstrated several positive and negative aspects for investors to consider.
• Jacobs CEO, Bob Pragada, and CFO, Claudia Jaramillo, illustrated their company’s exceptional resilience in face of challenging conditions, delivering better-than-expected underlying performance.
• 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.

• Masco Corporation delivered robust fourth quarter results despite some softening in the home improvement and DIY market, signaling the company’s ability to successfully navigate changing market conditions.
• Faced with overall market softening and a 2% decline in top-line results, the company turned to pricing disciplines, cost reductions, and operational efficiencies to improve margins.
• Contrary to the volume decrease, Masco reported an increase in operating profit by $38 million owing to an improved price/commodity relationship and efficiency efforts throughout its operations.

• Renesas has acquired PCB electronic design company Altium and Gallium Nitride power device maker Transphorm. Its tender offer for Sequans Communications has been extended.
• These are positive developments in our view, but sales and profit margins were down in 4Q of FY Dec-23 and are expected to decline this quarter as well.
• On the other hand, inventory adjustment is proceeding and the share price has dropped 12.6% since last Tuesday. Buy on weakness for the longer term. 

• Based in Taiwan, Acter Co is capitalizing on its extensive experience of high-end cleanroom integration, recycling and regeneration systems, electromechanical engineering to generate consistent growth in earnings and cash flow.
• Acter Co’s dividend yield averaged 8.2% from 2019 to 2022. Its annual dividend payout averaged 76% in the same period. Estimated dividend yield is 7% in 2023. 
• We found Acter Co Ltd (5536 TT) using Smartkarma’s Smart Score Screener system. 

• Nobody “named” having >5.0% in Outsourcing (2427 JP); no public noise, the stock down; people won’t be fighting for a bump unless the delay and impairment are truly meaningless.
• Stay long MGM China Holdings (2282 HK) as its FY23 top line surpasses pre-Covid levels.
• Investors and risk arbitrageurs who are worried about the potential loss of the case to RF SUNY should simply avoid, or sell then avoid JSR Corp (4185 JP) shares.

• Enphase Energy Inc.’s fourth quarter 2023 financial results show a quarterly revenue of $302.6 million, a considerable shipment of 1.6 million microinverters and 80.7 megawatt hours of battery, along with a generation of free cash flow of $15.4 million.
• The company also achieved a reduction of $147 million in Q4, and met their goal of reducing channel inventory.
• The quarter saw a 50% gross margin, 29% operating expenses, and 22% operating income.

• Nvent Electric, a professional electrical solutions provider, reported Q4 2023 results with records in sales, margins, earnings, and cash flow proving a strong growth and execution for the full year.
• With the ongoing trends of electrification, sustainability, and digitalization, the company anticipates strong sales and profit growth for 2024.
• For Q4, the company witnessed a 16% increase in sales, with 2% organic growth, outperforming the previous year’s results.

• TransDigm Group Incorporated’s first quarter 2024 results beat expectations and they raised their sales and EBITDA guidance for the year.
• The commercial aerospace market trends remained favorable as the industry continued to recover and progress towards normalization.
• 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.

• The Uber Technologies Inc reported a strong Q4, with year-on-year trip growth of 24%, outpacing gross bookings growth for the fourth consecutive quarter.
• Overall, 2023 was a critical year for Uber, proving its ability to generate strong and profitable growth at scale.
• The adjusted EBITDA of $1.3 billion exceeded the Q4 outlook with GAAP operating income of $652 million.

• Emerson Electric Co., a provider of automation solutions for the process and discrete industries, has demonstrated strong first-quarter financial results for 2024, outpacing expectations.
• Positive operating leverage, robust demand in process and hybrid markets, CapEx budgets, and continued execution by the team are primary contributors to their quarterly performance.
• Gross margins and adjusted EBITDA expansion from 2021 are reflective of the company’s ability to create value.

• The Jacobs Fiscal First Quarter 2024 earnings demonstrated several positive and negative aspects for investors to consider.
• Jacobs CEO, Bob Pragada, and CFO, Claudia Jaramillo, illustrated their company’s exceptional resilience in face of challenging conditions, delivering better-than-expected underlying performance.
• 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.

• Masco Corporation delivered robust fourth quarter results despite some softening in the home improvement and DIY market, signaling the company’s ability to successfully navigate changing market conditions.
• Faced with overall market softening and a 2% decline in top-line results, the company turned to pricing disciplines, cost reductions, and operational efficiencies to improve margins.
• Contrary to the volume decrease, Masco reported an increase in operating profit by $38 million owing to an improved price/commodity relationship and efficiency efforts throughout its operations.

• The Q4 2023 earnings by Caterpillar indicate the company has delivered a strong quarter and a solid year, with several record financial milestones.
• This includes record sales and revenues, adjusted profit margin, adjusted profit per share, and Machinery, Energy & Transportation (ME&T) free cash flow.
• These positive results are driven by healthy demand across most end markets for their products and services, displaying robust operational efficiency by the firm.

• Carrier Global Corp.
• recorded a robust Q4 2023 performance, delivering 33% growth in adjusted EPS and generating over $800 million in free cash flow, significantly exceeding expectations.
• Key to this success was resilient aftermarket growth alongside margin expansion.

• Xylem Inc.
• delivered a strong financial performance for its fourth quarter, exceeding expectations in both revenue and earnings per share.
• The company recorded a 9% organic revenue growth due to strong demand, coupled with a disciplined execution that contributed to a 90 basis-point expansion in EBITDA margin.

• The Q4 2023 earnings by Caterpillar indicate the company has delivered a strong quarter and a solid year, with several record financial milestones.
• This includes record sales and revenues, adjusted profit margin, adjusted profit per share, and Machinery, Energy & Transportation (ME&T) free cash flow.
• These positive results are driven by healthy demand across most end markets for their products and services, displaying robust operational efficiency by the firm.

• Carrier Global Corp.
• recorded a robust Q4 2023 performance, delivering 33% growth in adjusted EPS and generating over $800 million in free cash flow, significantly exceeding expectations.
• Key to this success was resilient aftermarket growth alongside margin expansion.

• Xylem Inc.
• delivered a strong financial performance for its fourth quarter, exceeding expectations in both revenue and earnings per share.
• The company recorded a 9% organic revenue growth due to strong demand, coupled with a disciplined execution that contributed to a 90 basis-point expansion in EBITDA margin.