Industrials

• Boeing is a globally recognized company in the aerospace industry that was founded in 1916 by William Boeing.
• The company’s business model includes three segments: commercial, defense, and services, with the commercial segment being the largest, accounting for nearly 40% of its revenues.
• Boeing has played a crucial role in the evolution of the aviation industry, from fabric airplanes to carbon fiber composite jetliners that can fly long distances without stopping.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• On 18 October, DL E&C announced that it will conduct a small scale share swap with DL Construction to make it into a 100% wholly owned subsidiary.
• We believe this merger share swap will have a positive impact on both DL E&C (375500 KS) and DL Construction (001880 KS) shares.
• To prevent shares dilution, DL E&C plans to cancel the same number of treasury shares of common stock as the number of newly issued shares of DL E&C common stock.

• Triveni Turbine (TRIV IN)  is one of the leading players in manufacturing of steam turbines, which in turn has uses across various energy intensive industries. 
• The company has recovered well from covid, has a robust order book in conjuction with healthy financial position. Balance sheet is debt-free, high cash and lean WC cycle. 
• The only possible risk that comes to the balance sheet would be of potential statutory disputes. The contingent liabilities remain under-stated.

• Boeing is a globally recognized company in the aerospace industry that was founded in 1916 by William Boeing.
• The company’s business model includes three segments: commercial, defense, and services, with the commercial segment being the largest, accounting for nearly 40% of its revenues.
• Boeing has played a crucial role in the evolution of the aviation industry, from fabric airplanes to carbon fiber composite jetliners that can fly long distances without stopping.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• On 18 October, DL E&C announced that it will conduct a small scale share swap with DL Construction to make it into a 100% wholly owned subsidiary.
• We believe this merger share swap will have a positive impact on both DL E&C (375500 KS) and DL Construction (001880 KS) shares.
• To prevent shares dilution, DL E&C plans to cancel the same number of treasury shares of common stock as the number of newly issued shares of DL E&C common stock.

• Triveni Turbine (TRIV IN)  is one of the leading players in manufacturing of steam turbines, which in turn has uses across various energy intensive industries. 
• The company has recovered well from covid, has a robust order book in conjuction with healthy financial position. Balance sheet is debt-free, high cash and lean WC cycle. 
• The only possible risk that comes to the balance sheet would be of potential statutory disputes. The contingent liabilities remain under-stated.

• On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won. 
• The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS). 
• As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.

• FY23 performance positions VA at the top table relative to global LCC financial performance
• Global analysis of #2 positions behind a strong market leaders suggests an efficient VA should be well positioned to sustainably outperform the global airline industry’s average financial performance
• Forecasting mean reversion for operating performance but aircraft financing savings should sustain superior profitability and cash flow generation than pre-COVID.

• J&T Global Express (1519 HK) has announced the terms for its IPO. The company plans to issue 327m shares at HK$12 per share, which should raise proceeds of around US$501m.
• Though profitability of the company’s China business has improved, SEA margins continue to decline, hence our analysis suggests that J&T may not be able to generate profits in the near-term.
• Our SOTP valuation offers per share value of HK$9.48 per share which is at a 21% discount to the indicative IPO price suggesting J&T’s IPO is overvalued.

• Cainiao Smart Logistics (1437124D HK), a global leader in e-commerce logistics, has filed for a HKEx IPO to raise at least US$1 billion at a US$15-20 billion valuation. 
• According to CIC, Cainiao is the world’s leading cross-border e-commerce logistics company regarding parcel volume in 2022, with one of the world’s largest logistics networks in terms of geographic reach.
• The bull case rests on market share gains in China, improving performance of the largest business (international logistics), and rising gross and operating margins. 

• Since mid-September, spreads have generally tightened across our European liquid universe of ordinary and preferred shares (12 have tightened, 7 widened).
• Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation), Grifols, Atlas Copco.
• Recommended trades long ordinary / short preferred shares: Fuchs, SSAB Svenska Stal.

• Cainiao Smart Logistics, Alibaba Group Holding’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
• Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
• In our previous note we looked at the company’s past performance and undertook a peer comparison. In this note, we will talk about valuations.

• On 17 October, Pan Ocean (028670 KS) announced that it will sell its 3.9 million shares (5.85% stake) in Hanjin KAL Corp (180640 KS) for about 163 billion won. 
• The main purpose of this stake sale is to secure more funds for Pan Ocean to potentially acquire HMM Co., Ltd. (011200 KS). 
• As evidenced by the recent increase in Baltic Dry Index, the potential expansion of the war in Israel could benefit major bulk shipping companies such as Pan Ocean.

• FY23 performance positions VA at the top table relative to global LCC financial performance
• Global analysis of #2 positions behind a strong market leaders suggests an efficient VA should be well positioned to sustainably outperform the global airline industry’s average financial performance
• Forecasting mean reversion for operating performance but aircraft financing savings should sustain superior profitability and cash flow generation than pre-COVID.

• J&T Global Express (1519 HK) has announced the terms for its IPO. The company plans to issue 327m shares at HK$12 per share, which should raise proceeds of around US$501m.
• Though profitability of the company’s China business has improved, SEA margins continue to decline, hence our analysis suggests that J&T may not be able to generate profits in the near-term.
• Our SOTP valuation offers per share value of HK$9.48 per share which is at a 21% discount to the indicative IPO price suggesting J&T’s IPO is overvalued.

• Cainiao Smart Logistics (1437124D HK), a global leader in e-commerce logistics, has filed for a HKEx IPO to raise at least US$1 billion at a US$15-20 billion valuation. 
• According to CIC, Cainiao is the world’s leading cross-border e-commerce logistics company regarding parcel volume in 2022, with one of the world’s largest logistics networks in terms of geographic reach.
• The bull case rests on market share gains in China, improving performance of the largest business (international logistics), and rising gross and operating margins. 

• Since mid-September, spreads have generally tightened across our European liquid universe of ordinary and preferred shares (12 have tightened, 7 widened).
• Recommended trades long preferred / short ordinary shares: Media-for-Europe, Sixt, Volkswagen (still the most interesting situation), Grifols, Atlas Copco.
• Recommended trades long ordinary / short preferred shares: Fuchs, SSAB Svenska Stal.

• Cainiao Smart Logistics, Alibaba Group Holding’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
• Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
• In our previous note we looked at the company’s past performance and undertook a peer comparison. In this note, we will talk about valuations.

• Polycab India, Macrotech Developers, Paytm, Tata Communications, Tata Motors DVR, Apl Apollo Tubes, Persistent Systems and Suzlon Energy have run up over the recent past and have heightened investor attention.
• The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
• We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.

• J&T Global Express (1936374D CH) is looking to raise HK$3.92bn (US$501m) in its IPO by selling 326.55m shares at HK$12/share, valuing the company at HK$105.75bn (US$13.52bn).
• J&T Global Express (1936374D CH) will not get Fast Entry to any indices but should be added to the HSCI in March. Inclusion to Southbound Stock Connect will take longer.
• Inclusion in other indices will take longer with the highest probability of index inclusion in September 2024. 

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its  Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

• J&T Global Express (1519 HK), a leading express delivery business in Southeast Asia and China, has launched a HKEx IPO to raise US$500 million at a fixed price of HK$12.00.
• We previously discussed the IPO in J&T Global Express IPO: The Bull Case, J&T Global Express IPO: The Bear Case and J&T Global Express IPO: Updates Tilts the Balance Positively.
• The IPO price range is unattractive, with our SoTP valuation of HK$10.75 per share, 10% below the IPO price. Therefore, we would pass on the IPO.

• Cainiao Smart Logistics, Alibaba (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
• Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
• In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison.

• Polycab India, Macrotech Developers, Paytm, Tata Communications, Tata Motors DVR, Apl Apollo Tubes, Persistent Systems and Suzlon Energy have run up over the recent past and have heightened investor attention.
• The increase in market cap has put the stocks on active manager radars and could also result in the stocks being added to global indices in the near future.
• We take a look at the positioning on the stocks and recommend pair trades to reduce market risk while trying to capture alpha.

• J&T Global Express (1936374D CH) is looking to raise HK$3.92bn (US$501m) in its IPO by selling 326.55m shares at HK$12/share, valuing the company at HK$105.75bn (US$13.52bn).
• J&T Global Express (1936374D CH) will not get Fast Entry to any indices but should be added to the HSCI in March. Inclusion to Southbound Stock Connect will take longer.
• Inclusion in other indices will take longer with the highest probability of index inclusion in September 2024. 

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its  Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

• J&T Global Express (1519 HK), a leading express delivery business in Southeast Asia and China, has launched a HKEx IPO to raise US$500 million at a fixed price of HK$12.00.
• We previously discussed the IPO in J&T Global Express IPO: The Bull Case, J&T Global Express IPO: The Bear Case and J&T Global Express IPO: Updates Tilts the Balance Positively.
• The IPO price range is unattractive, with our SoTP valuation of HK$10.75 per share, 10% below the IPO price. Therefore, we would pass on the IPO.

• Cainiao Smart Logistics, Alibaba (9988 HK)’s logistics linked arm, is planning to raise at least US$1bn in its Hong Kong IPO.
• Cainiao is the largest provider of cross-border e-commerce logistics services globally and a leader in China logistics services, according to CIC.
• In our previous note we looked at the company’s past performance, in this note we will undertake a peer comparison.

• First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading. 
• If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free. 
• We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.

• 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 – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Haitong International Securities Group (665 HK), Orecorp Ltd (ORR AU), Liontown Resources (LTR AU). 
• Owest spreads  Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), Pact Group Holdings (PGH AU), Origin Energy (ORG AU), T&K Toka Co Ltd (4636 JP), Healthway Medical Corp (HMED SP). 

• In this insight we consider what it would take to pull our valuation up closer to US$13 bn
• Such a valuation would require solid revenue growth (+17-18% Y/Y or better), plus sustained progress on raising China and ‘Other’ EBITDA margins, which are currently negative
• Even with these optimistic assumptions, J&T would trade at 20x EV/2025 Adj EBITDA & at historical EV/Revenue multiples far above more profitable Chinese express names

• Ushio is making substantial investments in it core light source technologies, sacrificing short term profit for long-term growth potential.
• Geared to rising demand for EUV mask and IC package lithography, bio-medical equipment, and solid-state light sources. Digital cinema business rebounding from COVID.
• Selling at 21x current EPS guidance, 12x management’s FY Mar-26 EPS target and 0.9x book value. Upside potential to book value while waiting for confirmation of forecast recovery.

• First, we can take on some risk and build up a short position using SSFs from now, aiming for an aggressively low price (likely Day 1) during the rights trading. 
• If this approach seems somewhat risky, the second is to wait until the rights trading and, although accepting some sacrifice in the spread, build positions relatively risk-free. 
• We can also actively build up a long position in the significantly backwardated SSFs from now and, instead, set up an aggressive short on the underlying shares.

• 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 – 111 Inc (YI US), Eoflow (294090 KS), Hollysys Automation Technologies (HOLI US), Haitong International Securities Group (665 HK), Orecorp Ltd (ORR AU), Liontown Resources (LTR AU). 
• Owest spreads  Yaizu Suisankagaku Industry (2812 JP), Healius (HLS AU), Pact Group Holdings (PGH AU), Origin Energy (ORG AU), T&K Toka Co Ltd (4636 JP), Healthway Medical Corp (HMED SP). 

• In this insight we consider what it would take to pull our valuation up closer to US$13 bn
• Such a valuation would require solid revenue growth (+17-18% Y/Y or better), plus sustained progress on raising China and ‘Other’ EBITDA margins, which are currently negative
• Even with these optimistic assumptions, J&T would trade at 20x EV/2025 Adj EBITDA & at historical EV/Revenue multiples far above more profitable Chinese express names

• Ushio is making substantial investments in it core light source technologies, sacrificing short term profit for long-term growth potential.
• Geared to rising demand for EUV mask and IC package lithography, bio-medical equipment, and solid-state light sources. Digital cinema business rebounding from COVID.
• Selling at 21x current EPS guidance, 12x management’s FY Mar-26 EPS target and 0.9x book value. Upside potential to book value while waiting for confirmation of forecast recovery.

• Accelerating the Offer timetable for NWS (659 HK) such that it closes before the dividend ex-date appeared stingy. But why pay dividends to shareholders that won’t hold the shares anymore?
• Those concerns have been put to rest with the despatch of NWS’ Composite Doc and New World (17 HK)‘s Circular, guaranteeing all shareholders the dividend, no matter the Offer outcome.
• The key risk now is NWD’s independent shareholder vote. On balance, this should get up.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Shui On Land
2. Seazen (Formerly Future Land)
3. Yuexiu Property
4. China Hongqiao
5. Longfor Properties

and more…

• We are starting a new series called “Asian Dividend Gems.” We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).
• The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.
• Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services. 

• Philippine startup Kita Agritech has secured US$3 million in an “oversubscribed” seed funding round co-led by Gentree Fund and Altara Ventures.
• Kita plans to use the money to digitalise the agriculture supply chain using big data and AI technologies.
• Kita was launched in 2022 as a supplier of fruits and vegetables for restaurants in Metro Manila. The company supported local farmers by financing their agricultural inputs and directly procuring their goods for distribution to various enterprises, such as hotels, restaurants, and food manufacturers.

• Accelerating the Offer timetable for NWS (659 HK) such that it closes before the dividend ex-date appeared stingy. But why pay dividends to shareholders that won’t hold the shares anymore?
• Those concerns have been put to rest with the despatch of NWS’ Composite Doc and New World (17 HK)‘s Circular, guaranteeing all shareholders the dividend, no matter the Offer outcome.
• The key risk now is NWD’s independent shareholder vote. On balance, this should get up.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Shui On Land
2. Seazen (Formerly Future Land)
3. Yuexiu Property
4. China Hongqiao
5. Longfor Properties

and more…

• We are starting a new series called “Asian Dividend Gems.” We plan to write about outstanding companies in Asia with high dividend yields (5% to 20%).
• The first company in this series is Koentec. From 2018 to 2022, its dividend yield averaged 5.2% and its dividend payout averaged 80.8%. The current dividend yield is 7%.
• Koentec is a leading Korean company that provides industrial waste incineration, steam production (utility), and waste landfill services. 

• Philippine startup Kita Agritech has secured US$3 million in an “oversubscribed” seed funding round co-led by Gentree Fund and Altara Ventures.
• Kita plans to use the money to digitalise the agriculture supply chain using big data and AI technologies.
• Kita was launched in 2022 as a supplier of fruits and vegetables for restaurants in Metro Manila. The company supported local farmers by financing their agricultural inputs and directly procuring their goods for distribution to various enterprises, such as hotels, restaurants, and food manufacturers.