Category

Industrials

Oct 08
0

Daily Brief Industrials: Zhejiang Expressway Co H, Tokyo Metro, China Boqi Environmental Hol, Orient Overseas International, Fluence Corp, Intloop and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities
  • Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap
  • Tokyo Metro IPO Valuation Analysis
  • Boqi Environmental (2377 HK): Privatisation by Management?
  • Charts & Context | From Here, What Can Get Better for Container Carriers? | Reduce Sector Exposure
  • Fluence Corp Ltd – The pipeline is being converted
  • Intloop (9556 Jp) – Turning a Corner with Improving Earnings Visibility
  • Fluence Corp Ltd – Timing delays mask growth progress

Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities

By David Blennerhassett

Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap

By Sumeet Singh

  • Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.4bn in its Japan IPO.
  • Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

Tokyo Metro IPO Valuation Analysis

By Douglas Kim

  • Tokyo Metro set the IPO price range at 1,100 to 1,200 Yen per share. At the top end of the range, Tokyo Metro would raise 349 billion yen ($2.35 billion).
  • Our base case valuation of Tokyo Metro is implied target price of 1,178 yen per share. This is within the top end of the IPO price range (1,200 yen).
  • Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO. 

Boqi Environmental (2377 HK): Privatisation by Management?

By Arun George

  • China Boqi Environmental Hol (2377 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. The shares have been up 39% since 30 September. 
  • It is likely that management, representing 59.59% of outstanding shares, is seeking to privatise Boqi through a Cayman scheme. 
  • Sinopec, a pre-IPO investor potentially holding a blocking stake, is likely seeking to exit. At the last close, Boqi trades in line with the median peers’ P/B multiple. 

Charts & Context | From Here, What Can Get Better for Container Carriers? | Reduce Sector Exposure

By Daniel Hellberg

  • We believe price momentum for global container carriers is unlikely to improve from here
  • As price momentum falters, carriers’ shares could continue to give back big gains
  • We would look for near-term opportunities to reduce or eliminate exposure to sector

Fluence Corp Ltd – The pipeline is being converted

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on environmental services company Fluence Corporation (ASX:FLC) following its announcement yesterday that it had secured a US$7.1m contract to provide a Sea Water Reverse Osmosis project for Stereau on Mayotte, a French archipelago in the Indian Ocean.
  • This material project for the Municipal division (MWW) is complemented by a US$1.5m contract win in the Industrial Wastewater & Biogas division (IWB) for a food processor in the US.
  • When combined with other recent successful tenders the new orders secured in the first 6 weeks of the current quarter total ~US$12m.

Intloop (9556 Jp) – Turning a Corner with Improving Earnings Visibility

By Astris Advisory Japan

  • Strong finish to FY7/24 and positioned to grow – Q1-4FY7/24results were ahead of revised company guidance, demonstrating a positive combination of acquisitive growth, price hikes for new consultancy work, and improving utilization rates.
  • The company has unveiled its ‘VISION 2030’ medium and long-term plan, focusing on margin expansion to accelerate earnings growth through sustained price increases and leveraging investments into technology, whilst maintaining expectations of stable double-digit growth in the mainstay consulting business.
  • Overall, we believe INTLOOP’s earnings trajectory is set to improve, with management showing a strategic focus to raise profitability.

Fluence Corp Ltd – Timing delays mask growth progress

By Research as a Service (RaaS)

  • RaaS Research Group has published an update report on water and wastewater treatment and solutions company Fluence Corporation (ASX:FLC) following its Q2 FY24 result and progress for H1 FY24 in which it reduced full year guidance for revenue of US$70-75m (previously US$90-100m) and EBITDA at breakeven (previously US$3.5-4.0m).The conversion of the pipeline remains key and management communicated its confidence on new contract wins, suggesting H2 FY24 and FY25 will be a “real proving ground” for the business.
  • Likewise, after a weak cashflow performance in Q2 FY24, with an operating cash outflow of $6.3m, the company has guided to a positive performance in H2 FY24.
  • We believe the balance sheet remains in a solid position to execute growth initiatives without the material debt burdens of the past.

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Oct 08
0

Daily Brief Industrials: Zhejiang Expressway Co H, Tokyo Metro, China Boqi Environmental Hol, Orient Overseas International, Fluence Corp, Intloop and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities
  • Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap
  • Tokyo Metro IPO Valuation Analysis
  • Boqi Environmental (2377 HK): Privatisation by Management?
  • Charts & Context | From Here, What Can Get Better for Container Carriers? | Reduce Sector Exposure
  • Fluence Corp Ltd – The pipeline is being converted
  • Intloop (9556 Jp) – Turning a Corner with Improving Earnings Visibility
  • Fluence Corp Ltd – Timing delays mask growth progress

Zhejiang Expressway (576 HK): “Cheap” Access To Zheshang Securities

By David Blennerhassett

Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap

By Sumeet Singh

  • Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.4bn in its Japan IPO.
  • Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
  • We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

Tokyo Metro IPO Valuation Analysis

By Douglas Kim

  • Tokyo Metro set the IPO price range at 1,100 to 1,200 Yen per share. At the top end of the range, Tokyo Metro would raise 349 billion yen ($2.35 billion).
  • Our base case valuation of Tokyo Metro is implied target price of 1,178 yen per share. This is within the top end of the IPO price range (1,200 yen).
  • Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO. 

Boqi Environmental (2377 HK): Privatisation by Management?

By Arun George

  • China Boqi Environmental Hol (2377 HK) entered a trading halt based on the Hong Kong Code on Takeovers and Mergers. The shares have been up 39% since 30 September. 
  • It is likely that management, representing 59.59% of outstanding shares, is seeking to privatise Boqi through a Cayman scheme. 
  • Sinopec, a pre-IPO investor potentially holding a blocking stake, is likely seeking to exit. At the last close, Boqi trades in line with the median peers’ P/B multiple. 

Charts & Context | From Here, What Can Get Better for Container Carriers? | Reduce Sector Exposure

By Daniel Hellberg

  • We believe price momentum for global container carriers is unlikely to improve from here
  • As price momentum falters, carriers’ shares could continue to give back big gains
  • We would look for near-term opportunities to reduce or eliminate exposure to sector

Fluence Corp Ltd – The pipeline is being converted

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on environmental services company Fluence Corporation (ASX:FLC) following its announcement yesterday that it had secured a US$7.1m contract to provide a Sea Water Reverse Osmosis project for Stereau on Mayotte, a French archipelago in the Indian Ocean.
  • This material project for the Municipal division (MWW) is complemented by a US$1.5m contract win in the Industrial Wastewater & Biogas division (IWB) for a food processor in the US.
  • When combined with other recent successful tenders the new orders secured in the first 6 weeks of the current quarter total ~US$12m.

Intloop (9556 Jp) – Turning a Corner with Improving Earnings Visibility

By Astris Advisory Japan

  • Strong finish to FY7/24 and positioned to grow – Q1-4FY7/24results were ahead of revised company guidance, demonstrating a positive combination of acquisitive growth, price hikes for new consultancy work, and improving utilization rates.
  • The company has unveiled its ‘VISION 2030’ medium and long-term plan, focusing on margin expansion to accelerate earnings growth through sustained price increases and leveraging investments into technology, whilst maintaining expectations of stable double-digit growth in the mainstay consulting business.
  • Overall, we believe INTLOOP’s earnings trajectory is set to improve, with management showing a strategic focus to raise profitability.

Fluence Corp Ltd – Timing delays mask growth progress

By Research as a Service (RaaS)

  • RaaS Research Group has published an update report on water and wastewater treatment and solutions company Fluence Corporation (ASX:FLC) following its Q2 FY24 result and progress for H1 FY24 in which it reduced full year guidance for revenue of US$70-75m (previously US$90-100m) and EBITDA at breakeven (previously US$3.5-4.0m).The conversion of the pipeline remains key and management communicated its confidence on new contract wins, suggesting H2 FY24 and FY25 will be a “real proving ground” for the business.
  • Likewise, after a weak cashflow performance in Q2 FY24, with an operating cash outflow of $6.3m, the company has guided to a positive performance in H2 FY24.
  • We believe the balance sheet remains in a solid position to execute growth initiatives without the material debt burdens of the past.

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Oct 07
0

Daily Brief Industrials: Tianjin Port, Sinopec Engineering Group H, Tokyo Metro, Zhejiang Expressway Co H, AviChina Industry & Technology H and more

By | Daily Briefs, Industrials

In today’s briefing:

  • 7&I (3382) – Asset Sale News Designed to Get Shareholder Attention to Future Value
  • WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade
  • Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings
  • Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector
  • ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech
  • AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge

7&I (3382) – Asset Sale News Designed to Get Shareholder Attention to Future Value

By Travis Lundy

  • Seven & I Holdings (3382 JP) is currently “in limbo” as the initial Alimentation Couche-Tard (ATD CN) (“ACT”) has been rejected, some news is out, and we await earnings/presentations.
  • The news last week was that 7&i might sell down a stake in Seven Bank Ltd (8410 JP) and could sell its retail/superstore business to PE rather than an IPO.
  • Both selldowns mean the focus on CVS everyone seems to want. That’s good news. And the shares are trading at/below ACT terms which “grossly undervalued” the company. Bullish. 

WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade

By Brian Freitas

  • The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
  • The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
  • There are 8 trading days to implementation and there are a bunch of stocks with over 2x ADV to trade.

Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings

By Oshadhi Kumarasiri

  • Tokyo Metro (9023 JP) operates 9 out of the 14 subway lines that provides essential public transportation services within the Greater Tokyo area. 
  • Many are unaware of Tokyo Metro’s cost savings, and we believe it could reach ¥110bn OP, exceeding the ¥100bn OP that most currently expect.
  • Even without factoring in the cost savings, the indicative IPO price appears reasonably cheap, as it’s priced near the lower end of peer multiples.

Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector

By Osbert Tang, CFA

  • By way of its 54.79% ownership in Zheshang Securities (601878 CH), Zhejiang Expressway Co H (576 HK) is an attractive indirect vehicle to access the mainland securities sector.  
  • The attributable market cap of Zheshang equals 90% of ZJE’s market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE’s 1H24 profit.
  • ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.

ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech

By Sumeet Singh

  • Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
  • On the IPO front, the roaring China/HK market led to some refilings, in what is likely to be the start of a tsunami of refilings, if the market momentum sustains. 
  • On the placements front, given the China/HK holidays there weren’t any deals. We instead looked at Bharti Hexacom upcoming lockup expiry.

AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge

By Osbert Tang, CFA

  • Given its holdings in four A-share subsidiaries, AviChina Industry & Technology H (2357 HK) will benefit from the surge in their share prices as mainland markets re-open.
  • These A-share all lagged benchmark Indices YTD. Avichina’s holdings in them are already valued at 2.23x its own market capitalisation. 
  • The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina’s share price has not yet excessively priced in the post-Golden Week rally.

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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Oct 07
0

Daily Brief Industrials: Tianjin Port, Sinopec Engineering Group H, Tokyo Metro, Zhejiang Expressway Co H, AviChina Industry & Technology H and more

By | Daily Briefs, Industrials

In today’s briefing:

  • 7&I (3382) – Asset Sale News Designed to Get Shareholder Attention to Future Value
  • WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade
  • Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings
  • Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector
  • ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech
  • AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge

7&I (3382) – Asset Sale News Designed to Get Shareholder Attention to Future Value

By Travis Lundy

  • Seven & I Holdings (3382 JP) is currently “in limbo” as the initial Alimentation Couche-Tard (ATD CN) (“ACT”) has been rejected, some news is out, and we await earnings/presentations.
  • The news last week was that 7&i might sell down a stake in Seven Bank Ltd (8410 JP) and could sell its retail/superstore business to PE rather than an IPO.
  • Both selldowns mean the focus on CVS everyone seems to want. That’s good news. And the shares are trading at/below ACT terms which “grossly undervalued” the company. Bullish. 

WisdomTree Emerging Markets SmallCap Dividend Index Rebalance: US$1bn to Trade

By Brian Freitas

  • The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of small cap stocks within Emerging Markets.
  • The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
  • There are 8 trading days to implementation and there are a bunch of stocks with over 2x ADV to trade.

Tokyo Metro IPO: Steady Tracks with Potential for OP Growth Through Fixed Cost Savings

By Oshadhi Kumarasiri

  • Tokyo Metro (9023 JP) operates 9 out of the 14 subway lines that provides essential public transportation services within the Greater Tokyo area. 
  • Many are unaware of Tokyo Metro’s cost savings, and we believe it could reach ¥110bn OP, exceeding the ¥100bn OP that most currently expect.
  • Even without factoring in the cost savings, the indicative IPO price appears reasonably cheap, as it’s priced near the lower end of peer multiples.

Zhejiang Expressway (576 HK): Cheap Access to the Roaring Securities Sector

By Osbert Tang, CFA

  • By way of its 54.79% ownership in Zheshang Securities (601878 CH), Zhejiang Expressway Co H (576 HK) is an attractive indirect vehicle to access the mainland securities sector.  
  • The attributable market cap of Zheshang equals 90% of ZJE’s market cap, implying that the toll road business is almost free. However, Zheshang only contributed 16% of ZJE’s 1H24 profit.
  • ZJE trades on 6.7x FY24F PER, vs. 31.3x for Zheshang and 17.6x for H-share securities companies. A stable toll road business also minimises the risk for ZJE.

ECM Weekly (7th Oct 2024) – Tokyo Metro, Rigaku, China Resources, K Bank, JD Ind, Swiggy, Lalatech

By Sumeet Singh

  • Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
  • On the IPO front, the roaring China/HK market led to some refilings, in what is likely to be the start of a tsunami of refilings, if the market momentum sustains. 
  • On the placements front, given the China/HK holidays there weren’t any deals. We instead looked at Bharti Hexacom upcoming lockup expiry.

AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge

By Osbert Tang, CFA

  • Given its holdings in four A-share subsidiaries, AviChina Industry & Technology H (2357 HK) will benefit from the surge in their share prices as mainland markets re-open.
  • These A-share all lagged benchmark Indices YTD. Avichina’s holdings in them are already valued at 2.23x its own market capitalisation. 
  • The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina’s share price has not yet excessively priced in the post-Golden Week rally.

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Oct 06
0

Daily Brief Industrials: Tokyo Metro, Contemporary Amperex Technology (CATL), Lyft and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia
  • CATL Chairman Sees Recycled Lithium as the Future of EV-Battery Making
  • Lyft Inc.: Expansion of Serviceable Addressable Market Driving Our Optimism! – Major Drivers

Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia

By Arun George

CATL Chairman Sees Recycled Lithium as the Future of EV-Battery Making

By Caixin Global

  • Half of all lithium-ion batteries could be made with recycled lithium by 2042, according to the founder of power cell giant Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ +11.06%), who presented a vision of an eco-friendlier industry at a recent event.

  • Speaking at the World New Energy Vehicles Congress on Friday, Zeng Yuqun, also CATL’s chairman, highlighted the critical role power cells can play in driving the EV industry toward a zero-carbon future, saying that the sustainable development of the industry hinges on the use of recycled battery raw materials.

  • CATL’s battery recycling business has already taken shape, with a current annual capacity to process 270,000 tons of used batteries, Zeng said.

Lyft Inc.: Expansion of Serviceable Addressable Market Driving Our Optimism! – Major Drivers

By Baptista Research

  • Lyft, Inc. recently released its financial results for the second quarter of 2024, highlighting some significant milestones and challenges.
  • The quarter was notable as it marked the first instance of GAAP profitability for Lyft, signaling a robust measure of cost management and efficiency within the company.
  • However, this financial highlight comes amid various strategic shifts and external factors that could influence the company’s trajectory moving forward.

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
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Oct 06
0

Daily Brief Industrials: Tokyo Metro, Contemporary Amperex Technology (CATL), Lyft and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia
  • CATL Chairman Sees Recycled Lithium as the Future of EV-Battery Making
  • Lyft Inc.: Expansion of Serviceable Addressable Market Driving Our Optimism! – Major Drivers

Weekly Deals Digest (06 Oct) – Tokyo Metro, Rigaku, CR Beverage, K Bank, ASMPT, Samson, T-Gaia

By Arun George

CATL Chairman Sees Recycled Lithium as the Future of EV-Battery Making

By Caixin Global

  • Half of all lithium-ion batteries could be made with recycled lithium by 2042, according to the founder of power cell giant Contemporary Amperex Technology Co. Ltd. (CATL) (300750.SZ +11.06%), who presented a vision of an eco-friendlier industry at a recent event.

  • Speaking at the World New Energy Vehicles Congress on Friday, Zeng Yuqun, also CATL’s chairman, highlighted the critical role power cells can play in driving the EV industry toward a zero-carbon future, saying that the sustainable development of the industry hinges on the use of recycled battery raw materials.

  • CATL’s battery recycling business has already taken shape, with a current annual capacity to process 270,000 tons of used batteries, Zeng said.

Lyft Inc.: Expansion of Serviceable Addressable Market Driving Our Optimism! – Major Drivers

By Baptista Research

  • Lyft, Inc. recently released its financial results for the second quarter of 2024, highlighting some significant milestones and challenges.
  • The quarter was notable as it marked the first instance of GAAP profitability for Lyft, signaling a robust measure of cost management and efficiency within the company.
  • However, this financial highlight comes amid various strategic shifts and external factors that could influence the company’s trajectory moving forward.

💡 Before it’s here, it’s on Smartkarma

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
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  • ✓ Events & Webinars
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Oct 05
0

Daily Brief Industrials: Ibiden Co Ltd, Donaldson Co, Huntington Ingalls Industries, Spirit Airlines and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Ibiden (4062 JP): Once Again a Long-Term Buy
  • Donaldson Company Inc: Will The Aftermarket and Off-Road Growth in Mobile Solutions Last? – Major Drivers
  • Huntington Ingalls Industries: A Tale Of Expanded Shipbuilding Capacity and Modernization! – Major Drivers
  • Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

Ibiden (4062 JP): Once Again a Long-Term Buy

By Scott Foster

  • Sales, profits and the share price are bottoming out and good 1Q results make FY Mar-25 guidance look conservative.
  • Demand for advanced packaging should drive recovery, with the operating margin regaining its previous peak in three or four years.
  • Management’s long-term guidance implies a decline in the projected P/E ratio from 26x to 10X by FY Mar-28, but even 15x would make the shares an attractive investment.

Donaldson Company Inc: Will The Aftermarket and Off-Road Growth in Mobile Solutions Last? – Major Drivers

By Baptista Research

  • Donaldson Company has reported a record-breaking financial performance for the fiscal year 2024, achieving high sales, margins, and EPS.
  • The company surpassed $3.5 billion in sales and reported an operating margin of 15.4%, delivering an adjusted EPS of $3.42 which reflects a 13% year-over-year growth.
  • This robust performance was underpinned by strong cash conversion over 97%, and the return of $286 million to shareholders through dividends and buybacks.

Huntington Ingalls Industries: A Tale Of Expanded Shipbuilding Capacity and Modernization! – Major Drivers

By Baptista Research

  • Huntington’s second quarter of 2024 financial results demonstrated a robust performance, underpinning the company’s ability to navigate challenges while seizing growth opportunities.
  • Revenue for the quarter reached $3 billion, marking a 6.8% year-over-year increase, driven largely by the exceptional growth of the Mission Technologies segment, which posted a 19% revenue increase from the previous year.
  • This segment’s book-to bill ratio stood at 1.15, indicating healthy future revenue from confirmed contracts.

Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

By Neil Glynn

  • WSJ reports Spirit is exploring a Chapter 11 filing, with this risk apparent since the collapse of the planned JetBlue combination in January.
  • We highlight detailed analysis comparing the economics of airline recoveries across the US, illustrating Spirit lags on commercial performance and cost control.
  • With labor costs up from 21% of revenue in 2Q19 to 33% in 2Q24, compared to a pre-tax match of 12% in 2019, Spirit needs to address this labor-pricing mismatch.

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Oct 05
0

Daily Brief Industrials: Ibiden Co Ltd, Donaldson Co, Huntington Ingalls Industries, Spirit Airlines and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Ibiden (4062 JP): Once Again a Long-Term Buy
  • Donaldson Company Inc: Will The Aftermarket and Off-Road Growth in Mobile Solutions Last? – Major Drivers
  • Huntington Ingalls Industries: A Tale Of Expanded Shipbuilding Capacity and Modernization! – Major Drivers
  • Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

Ibiden (4062 JP): Once Again a Long-Term Buy

By Scott Foster

  • Sales, profits and the share price are bottoming out and good 1Q results make FY Mar-25 guidance look conservative.
  • Demand for advanced packaging should drive recovery, with the operating margin regaining its previous peak in three or four years.
  • Management’s long-term guidance implies a decline in the projected P/E ratio from 26x to 10X by FY Mar-28, but even 15x would make the shares an attractive investment.

Donaldson Company Inc: Will The Aftermarket and Off-Road Growth in Mobile Solutions Last? – Major Drivers

By Baptista Research

  • Donaldson Company has reported a record-breaking financial performance for the fiscal year 2024, achieving high sales, margins, and EPS.
  • The company surpassed $3.5 billion in sales and reported an operating margin of 15.4%, delivering an adjusted EPS of $3.42 which reflects a 13% year-over-year growth.
  • This robust performance was underpinned by strong cash conversion over 97%, and the return of $286 million to shareholders through dividends and buybacks.

Huntington Ingalls Industries: A Tale Of Expanded Shipbuilding Capacity and Modernization! – Major Drivers

By Baptista Research

  • Huntington’s second quarter of 2024 financial results demonstrated a robust performance, underpinning the company’s ability to navigate challenges while seizing growth opportunities.
  • Revenue for the quarter reached $3 billion, marking a 6.8% year-over-year increase, driven largely by the exceptional growth of the Mission Technologies segment, which posted a 19% revenue increase from the previous year.
  • This segment’s book-to bill ratio stood at 1.15, indicating healthy future revenue from confirmed contracts.

Spirit Airlines Needs to Address Labor Cost-Pricing Mismatch with or Without Chapter 11

By Neil Glynn

  • WSJ reports Spirit is exploring a Chapter 11 filing, with this risk apparent since the collapse of the planned JetBlue combination in January.
  • We highlight detailed analysis comparing the economics of airline recoveries across the US, illustrating Spirit lags on commercial performance and cost control.
  • With labor costs up from 21% of revenue in 2Q19 to 33% in 2Q24, compared to a pre-tax match of 12% in 2019, Spirit needs to address this labor-pricing mismatch.

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Oct 04
0

Daily Brief Industrials: Young Poong Precision, Kilburn Engineering, Veralto , Armstrong World Industries, Zuiko Corp, ATS , Generac Holdings, GFL Environmental and more

By | Daily Briefs, Industrials

In today’s briefing:

  • MBK Hikes Youngpoong Precision Tender Price to ₩30,000: Tender Deadline Extended to the 14th
  • MBK Raises Tender Offer Price of Young Poong Precision to 30,000 Won
  • The Beat Ideas: Kilburn Engineering Limited: Differentiated Business, Multiple Acquisition, Growth
  • Veralto: The Power of Customer Dependency and Recurring Revenue
  • Armstrong World Industries: Diverse Product Demand in Mineral Fiber & Other Major Drivers
  • Zuiko Corp (6279 JP): 1H FY02/25 flash update
  • ATS Automation Tooling Systems: Will The Acquisition of Heidolph Instruments Push Their Growth Further? – Major Drivers
  • Generac Holdings Inc.: Acquisition of Ageto for Strengthening of Microgrid Control & Energy Solutions & Other Major Drivers
  • GFL Environmental Inc.: Focused Expansion in High-Growth Markets Driving Our Optimism! – Major Drivers

MBK Hikes Youngpoong Precision Tender Price to ₩30,000: Tender Deadline Extended to the 14th

By Sanghyun Park

  • MBK is raising its tender offer for Young Poong Precision to ₩30,000 per share, matching Choi’s offer and extending the deadline to October 14. Filing expected tomorrow before market open.
  • MBK targets 6.84 million shares, surpassing Choi’s 3.94 million cap. No hard floor, no cancellation risk, but MBK holds an edge in proration.
  • The buzz is whether MBK will raise its Korea Zinc bid beyond 900,000 KRW, as Choi prepped with a 950,000 KRW offer. A bid hike and extension seem likely.

MBK Raises Tender Offer Price of Young Poong Precision to 30,000 Won

By Douglas Kim

  • MBK Partners announced that it is raising its tender offer price for Young Poong Precision from 25,000 won to 30,000 won, matching Choi family’s tender offer price of 30,000 won. 
  • Accordingly, MBK’s tender offer period for Young Poong Precision has been extended from 6 October to 14 October.
  • The revised up tender offer price of Young Poong Precision by MBK at 30,000 won is likely to result in boosting its stock price closer to the 30,000 won.

The Beat Ideas: Kilburn Engineering Limited: Differentiated Business, Multiple Acquisition, Growth

By Sudarshan Bhandari

  • Kilburn Engineering (KEL IN) acquired new assets, expanded into waste heat recovery, and enhanced its market position with acquisitions in July and August 2024.
  • Debt settlement, 2 Fundraise, 2 Mega acquisition, diversification of revenue and margin improvement are some key positives for Kilburn.
  • Rs. 371Cr of Order Book, FY25E Revenue of Rs. 500Cr Revenue leads to 60% revenue growth and expecting margins of 20% will lead to huge potential for this company.

Veralto: The Power of Customer Dependency and Recurring Revenue

By Pyari Menon

  • With its Danaher Corp (DHR US) heritage, Veralto (VLTO US) has built a foundation based on durable and recurring sales growth, high profitability, and strong cash generation.
  • Veralto’s products and services are mission-critical yet account for less than 1% of client costs, leading to high switching costs and ensuring customer retention and financial resilience through economic cycles.
  • Veralto holds market leadership in both its Water Quality (WQ) and Product Quality & Innovation (PQI) segments, which positions it well for the increasing regulatory and environmental demands. .

Armstrong World Industries: Diverse Product Demand in Mineral Fiber & Other Major Drivers

By Baptista Research

  • Armstrong World Industries, a global leader in the design and manufacture of innovative commercial and residential ceiling, wall, and suspension system solutions, delivered a strong financial performance in the second quarter of 2024, posting 12% growth in revenue and 13% growth in adjusted EBITDA.
  • The company also reported adjusted net earnings per share growth of 17%, marking the sixth consecutive quarter of year-over-year growth.
  • The results are anchored in robust execution and strategic growth initiatives, despite a challenging macroeconomic environment.

Zuiko Corp (6279 JP): 1H FY02/25 flash update

By Shared Research

  • Revenue decreased by 15.6% YoY to JPY8.4bn, primarily due to a drop in adult diaper machinery sales.
  • Gross profit margin fell to 16.6%, leading to an operating loss of JPY179mn from a previous profit.
  • Net loss attributable to parent shareholders was JPY705mn, affected by tax-effect accounting and stock holding downsizing.

ATS Automation Tooling Systems: Will The Acquisition of Heidolph Instruments Push Their Growth Further? – Major Drivers

By Baptista Research

  • ATS Corporation’s first-quarter earnings for fiscal 2025 presented a multifaceted view of the company’s current position and future prospects.
  • The company reported robust order bookings totaling $817 million, marking an 18% increase year-over-year, driven by notable organic growth in life sciences and the integration of the recently acquired company, Paxiom.
  • Despite these gains, total revenue saw an 8% decrease to $694 million compared to the previous year,s impacted largely by anticipated lower activity in the transportation sector as the company begins executing recently won programs in life sciences.

Generac Holdings Inc.: Acquisition of Ageto for Strengthening of Microgrid Control & Energy Solutions & Other Major Drivers

By Baptista Research

  • Generac Holdings Inc. reported its financial results for the second quarter of 2024, presenting both strengths and weaknesses in its performance.
  • The company saw a near-flat year-over-year net sales at $998 million, with residential product sales increasing by 8%.
  • This growth in the residential sector was primarily driven by a midteens rate increase in home standby generator shipments.

GFL Environmental Inc.: Focused Expansion in High-Growth Markets Driving Our Optimism! – Major Drivers

By Baptista Research

  • GFL Environmental’s recent earnings results illustrate the inherent strengths and operational challenges within its diversified environmental services and solid waste management business.
  • The company’s second-quarter performance showcased better-than-expected results, driven by strategic initiatives and sound operational management, underpinning the predictable and recurring revenue streams that define GFL Environmental’s business model.
  • 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.

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Oct 04
0

Daily Brief Industrials: Young Poong Precision, Kilburn Engineering, Veralto , Armstrong World Industries, Zuiko Corp, ATS , Generac Holdings, GFL Environmental and more

By | Daily Briefs, Industrials

In today’s briefing:

  • MBK Hikes Youngpoong Precision Tender Price to ₩30,000: Tender Deadline Extended to the 14th
  • MBK Raises Tender Offer Price of Young Poong Precision to 30,000 Won
  • The Beat Ideas: Kilburn Engineering Limited: Differentiated Business, Multiple Acquisition, Growth
  • Veralto: The Power of Customer Dependency and Recurring Revenue
  • Armstrong World Industries: Diverse Product Demand in Mineral Fiber & Other Major Drivers
  • Zuiko Corp (6279 JP): 1H FY02/25 flash update
  • ATS Automation Tooling Systems: Will The Acquisition of Heidolph Instruments Push Their Growth Further? – Major Drivers
  • Generac Holdings Inc.: Acquisition of Ageto for Strengthening of Microgrid Control & Energy Solutions & Other Major Drivers
  • GFL Environmental Inc.: Focused Expansion in High-Growth Markets Driving Our Optimism! – Major Drivers

MBK Hikes Youngpoong Precision Tender Price to ₩30,000: Tender Deadline Extended to the 14th

By Sanghyun Park

  • MBK is raising its tender offer for Young Poong Precision to ₩30,000 per share, matching Choi’s offer and extending the deadline to October 14. Filing expected tomorrow before market open.
  • MBK targets 6.84 million shares, surpassing Choi’s 3.94 million cap. No hard floor, no cancellation risk, but MBK holds an edge in proration.
  • The buzz is whether MBK will raise its Korea Zinc bid beyond 900,000 KRW, as Choi prepped with a 950,000 KRW offer. A bid hike and extension seem likely.

MBK Raises Tender Offer Price of Young Poong Precision to 30,000 Won

By Douglas Kim

  • MBK Partners announced that it is raising its tender offer price for Young Poong Precision from 25,000 won to 30,000 won, matching Choi family’s tender offer price of 30,000 won. 
  • Accordingly, MBK’s tender offer period for Young Poong Precision has been extended from 6 October to 14 October.
  • The revised up tender offer price of Young Poong Precision by MBK at 30,000 won is likely to result in boosting its stock price closer to the 30,000 won.

The Beat Ideas: Kilburn Engineering Limited: Differentiated Business, Multiple Acquisition, Growth

By Sudarshan Bhandari

  • Kilburn Engineering (KEL IN) acquired new assets, expanded into waste heat recovery, and enhanced its market position with acquisitions in July and August 2024.
  • Debt settlement, 2 Fundraise, 2 Mega acquisition, diversification of revenue and margin improvement are some key positives for Kilburn.
  • Rs. 371Cr of Order Book, FY25E Revenue of Rs. 500Cr Revenue leads to 60% revenue growth and expecting margins of 20% will lead to huge potential for this company.

Veralto: The Power of Customer Dependency and Recurring Revenue

By Pyari Menon

  • With its Danaher Corp (DHR US) heritage, Veralto (VLTO US) has built a foundation based on durable and recurring sales growth, high profitability, and strong cash generation.
  • Veralto’s products and services are mission-critical yet account for less than 1% of client costs, leading to high switching costs and ensuring customer retention and financial resilience through economic cycles.
  • Veralto holds market leadership in both its Water Quality (WQ) and Product Quality & Innovation (PQI) segments, which positions it well for the increasing regulatory and environmental demands. .

Armstrong World Industries: Diverse Product Demand in Mineral Fiber & Other Major Drivers

By Baptista Research

  • Armstrong World Industries, a global leader in the design and manufacture of innovative commercial and residential ceiling, wall, and suspension system solutions, delivered a strong financial performance in the second quarter of 2024, posting 12% growth in revenue and 13% growth in adjusted EBITDA.
  • The company also reported adjusted net earnings per share growth of 17%, marking the sixth consecutive quarter of year-over-year growth.
  • The results are anchored in robust execution and strategic growth initiatives, despite a challenging macroeconomic environment.

Zuiko Corp (6279 JP): 1H FY02/25 flash update

By Shared Research

  • Revenue decreased by 15.6% YoY to JPY8.4bn, primarily due to a drop in adult diaper machinery sales.
  • Gross profit margin fell to 16.6%, leading to an operating loss of JPY179mn from a previous profit.
  • Net loss attributable to parent shareholders was JPY705mn, affected by tax-effect accounting and stock holding downsizing.

ATS Automation Tooling Systems: Will The Acquisition of Heidolph Instruments Push Their Growth Further? – Major Drivers

By Baptista Research

  • ATS Corporation’s first-quarter earnings for fiscal 2025 presented a multifaceted view of the company’s current position and future prospects.
  • The company reported robust order bookings totaling $817 million, marking an 18% increase year-over-year, driven by notable organic growth in life sciences and the integration of the recently acquired company, Paxiom.
  • Despite these gains, total revenue saw an 8% decrease to $694 million compared to the previous year,s impacted largely by anticipated lower activity in the transportation sector as the company begins executing recently won programs in life sciences.

Generac Holdings Inc.: Acquisition of Ageto for Strengthening of Microgrid Control & Energy Solutions & Other Major Drivers

By Baptista Research

  • Generac Holdings Inc. reported its financial results for the second quarter of 2024, presenting both strengths and weaknesses in its performance.
  • The company saw a near-flat year-over-year net sales at $998 million, with residential product sales increasing by 8%.
  • This growth in the residential sector was primarily driven by a midteens rate increase in home standby generator shipments.

GFL Environmental Inc.: Focused Expansion in High-Growth Markets Driving Our Optimism! – Major Drivers

By Baptista Research

  • GFL Environmental’s recent earnings results illustrate the inherent strengths and operational challenges within its diversified environmental services and solid waste management business.
  • The company’s second-quarter performance showcased better-than-expected results, driven by strategic initiatives and sound operational management, underpinning the predictable and recurring revenue streams that define GFL Environmental’s business model.
  • 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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free