Industrials

• With the review period nearly complete, we see 15 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
• There could be index changes even before the December rebalance if there are prolonged trading suspensions and stocks migrate from the KOSDAQ Market to the KOSPI Market.
• The potential adds have sold off hard over the last six weeks, similar to the performance at the June rebalance.

• Three potentially large e-comm logistics IPOs are now in-process in Hong Kong
• We compare the three ‘by the numbers’, then examine their strengths and weaknesses
• We conclude by providing a matrix that may help investors decide where to allocate time

• Millennium Services Group Ltd (ASX:MIL) has released its Q1 FY24 cash flow incorporating updated revenue commentary.
• Contracted revenue rose 14.3%, an acceleration on Q4 FY23 on the back of new contract wins and wage inflation.
• Total growth was 12.6%, the strongest growth since H2 FY18. Operating cash flow was negative $3.6m, a 23% improvement on the pcp (implying improved gross margins) with both impacted by the timing of collections and an additional fortnightly wage payment. 

• With the review period nearly complete, we see 15 potential changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
• There could be index changes even before the December rebalance if there are prolonged trading suspensions and stocks migrate from the KOSDAQ Market to the KOSPI Market.
• The potential adds have sold off hard over the last six weeks, similar to the performance at the June rebalance.

• Three potentially large e-comm logistics IPOs are now in-process in Hong Kong
• We compare the three ‘by the numbers’, then examine their strengths and weaknesses
• We conclude by providing a matrix that may help investors decide where to allocate time

• Millennium Services Group Ltd (ASX:MIL) has released its Q1 FY24 cash flow incorporating updated revenue commentary.
• Contracted revenue rose 14.3%, an acceleration on Q4 FY23 on the back of new contract wins and wage inflation.
• Total growth was 12.6%, the strongest growth since H2 FY18. Operating cash flow was negative $3.6m, a 23% improvement on the pcp (implying improved gross margins) with both impacted by the timing of collections and an additional fortnightly wage payment. 

• CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, Kurita Water Industries, GMO Payment Gateway, Keio Corp and NGK Insulators have underperformed the Nikkei225 over the recent past.
• The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
• Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.

• In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
• Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
• We believe margins are under increasing pressure in China’s mainstream express segment

• CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, Kurita Water Industries, GMO Payment Gateway, Keio Corp and NGK Insulators have underperformed the Nikkei225 over the recent past.
• The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
• Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.

• In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
• Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
• We believe margins are under increasing pressure in China’s mainstream express segment

• Light & Wonder (LNW US)/ Light & Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&P/ASX 200 (AS51 INDEX) last week.
• Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
• Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.

• Light & Wonder (LNW US)/ Light & Wonder (LNW AU) replaced United Malt Group Ltd (UMG AU) in the S&P/ASX 200 (AS51 INDEX) last week.
• Newcrest Mining (NCM AU) stops trading this week and should be replaced by Newmont Mining (NEM US) CDIs in the ASX indices.
• Another week of ETF outflows for China with the largest outflows from trackers benchmarked to the CSI 1000 Index.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess GOL’s ESG as “Adequate”, in line with its Environment, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess GOL’s ESG as “Adequate”, in line with its Environment, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
• In this insight, we take a look at the potential index changes that could take place between now and the end of the December 2023 rebalance.
• This includes a couple of intra-review index changes that could be triggered by the Dechra Pharmaceuticals (DPH LN) and Chr Hansen Holding A/S (CHR DC) takeover situations.

• Recruit’s share price is down more than 10% over the last 30-days despite there being a significant improvement in job openings in the US for the month of August.
• The web traffic on both Glassdoor and Indeed also have declined in September compared to August where there was a MoM improvement in August 2023.
• Though Recruit has guided for a decline in earnings, we think there is further downside to the company’s guidance.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Avianca’s ESG as “Adequate”, in line with its “Adequate” Environmental and Governance scores. However, the company’s Social pillar is “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.

Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.

• The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
• In this insight, we take a look at the potential index changes that could take place between now and the end of the December 2023 rebalance.
• This includes a couple of intra-review index changes that could be triggered by the Dechra Pharmaceuticals (DPH LN) and Chr Hansen Holding A/S (CHR DC) takeover situations.

• Recruit’s share price is down more than 10% over the last 30-days despite there being a significant improvement in job openings in the US for the month of August.
• The web traffic on both Glassdoor and Indeed also have declined in September compared to August where there was a MoM improvement in August 2023.
• Though Recruit has guided for a decline in earnings, we think there is further downside to the company’s guidance.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Avianca’s ESG as “Adequate”, in line with its “Adequate” Environmental and Governance scores. However, the company’s Social pillar is “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.

Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.