Industrials

Visional (4194 JP)‘s 4QFY07/23 revenue missed consensus by 0.2% despite revenues increasing 22.1% YoY to 14.73bn. Operating profit beat consensus by a huge margin of 21%.
Though revenue growth has slowed down, BizReach has maintained its steady performance while HRMOS continues to see strong growth with significant reduction in operating losses.
The company’s share price moved up by more than 5% following its earnings announcement and Visional remains our top pick in the Japanese HR space.

Generac Holdings Inc.: Can The Partnership With Buildertrend Catalyze Revenues? – Major Drivers

By Baptista Research

Generac Holdings delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
The company faced challenges as residential product sales declined significantly by 44%, primarily due to a softer consumer spending environment impacting home standby generators and chore products.
In contrast, the company’s Global C&I product segment achieved an all-time quarterly sales high with approximately 24% growth, driven by broad-based expansion across regions and channels.

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Sep 16

Daily Brief Industrials: Doosan Robotics, Visional , Generac Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Robotics IPO: Exuberance Results in Valuation Disconnect
Visional: Steady Performance
Generac Holdings Inc.: Can The Partnership With Buildertrend Catalyze Revenues? – Major Drivers

Doosan Robotics IPO: Exuberance Results in Valuation Disconnect

By Arun George

Doosan Robotics (454910 KS) IPO has coincided with a fortuitous rerating of peers as robotics has recently emerged as a dominant theme in the Korean stock market.
We previously discussed the IPO in Doosan Robotics IPO: The Bull Case, Doosan Robotics IPO: The Bear Case and Doosan Robotics IPO: Valuation Insights.
The risk is that sentiment can quickly shift the other way before the listing. Our bull-case DCF suggests that the IPO price range is, at best, fully priced.

Visional: Steady Performance

Visional (4194 JP)‘s 4QFY07/23 revenue missed consensus by 0.2% despite revenues increasing 22.1% YoY to 14.73bn. Operating profit beat consensus by a huge margin of 21%.
Though revenue growth has slowed down, BizReach has maintained its steady performance while HRMOS continues to see strong growth with significant reduction in operating losses.
The company’s share price moved up by more than 5% following its earnings announcement and Visional remains our top pick in the Japanese HR space.

Generac Holdings Inc.: Can The Partnership With Buildertrend Catalyze Revenues? – Major Drivers

By Baptista Research

Generac Holdings delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
The company faced challenges as residential product sales declined significantly by 44%, primarily due to a softer consumer spending environment impacting home standby generators and chore products.
In contrast, the company’s Global C&I product segment achieved an all-time quarterly sales high with approximately 24% growth, driven by broad-based expansion across regions and channels.

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Sep 15

Daily Brief Industrials: Applus Services SA, INOX India Limited, iMotion Automotive Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

I Squared & TDR/Applus: Competing Offer at €9.75
INOX India Pre-IPO Tearsheet
IMotion Automotive Technology Pre-IPO – PHIP Updates – Concentration Risk Even More Apparent Now

I Squared & TDR/Applus: Competing Offer at €9.75

By Jesus Rodriguez Aguilar

On 14 September, a “competing” acquisition offer for Applus has been made by Amber Equity, a vehicle of I Squared and TDR Capital, at €9.75/share, in cash, cum dividend.
The offer represents 10.7x EV/Fwd NTM EBIT and a 2.6% increase over Apollo’s offer, which seems to signal Amber will not raise its offer by much more.
I believe there will be an increased offer from Apollo, probably at least around €10/share (c. 2.6% increase). I’d be long Applus.

INOX India Pre-IPO Tearsheet

By Clarence Chu

INOX India Limited (INOX IN) is looking to raise at least US$100m in its upcoming India IPO. The deal will be run by Axis Capital, and ICICI Securities.
INOX India (INOX) is a manufacturer of cryogenic equipment, with over 30 years of experience in designing, engineering, manufacturing and installation of equipment and systems for cryogenic conditions.
As per CRISIL, the firm was the largest exporter of cryogenic tanks from India in terms of FY22 sales.

IMotion Automotive Technology Pre-IPO – PHIP Updates – Concentration Risk Even More Apparent Now

IMotion Automotive Technology (1812706D CH) is looking to raise about US$100m in its upcoming HK IPO, after downsizing from an earlier reported float of US$300m.
The company possesses advanced full-stack R&D capabilities including self-developed algorithms and hardware-software co-design capabilities. It provides two AD domain controller product lines, and the self-designed iDC series.
We had covered the company’s performance in our earlier notes. In this note, we talk about its PHIP updates.

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Sep 15

Daily Brief Industrials: Applus Services SA, INOX India Limited, iMotion Automotive Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

I Squared & TDR/Applus: Competing Offer at €9.75
INOX India Pre-IPO Tearsheet
IMotion Automotive Technology Pre-IPO – PHIP Updates – Concentration Risk Even More Apparent Now

I Squared & TDR/Applus: Competing Offer at €9.75

By Jesus Rodriguez Aguilar

On 14 September, a “competing” acquisition offer for Applus has been made by Amber Equity, a vehicle of I Squared and TDR Capital, at €9.75/share, in cash, cum dividend.
The offer represents 10.7x EV/Fwd NTM EBIT and a 2.6% increase over Apollo’s offer, which seems to signal Amber will not raise its offer by much more.
I believe there will be an increased offer from Apollo, probably at least around €10/share (c. 2.6% increase). I’d be long Applus.

INOX India Pre-IPO Tearsheet

By Clarence Chu

INOX India Limited (INOX IN) is looking to raise at least US$100m in its upcoming India IPO. The deal will be run by Axis Capital, and ICICI Securities.
INOX India (INOX) is a manufacturer of cryogenic equipment, with over 30 years of experience in designing, engineering, manufacturing and installation of equipment and systems for cryogenic conditions.
As per CRISIL, the firm was the largest exporter of cryogenic tanks from India in terms of FY22 sales.

IMotion Automotive Technology Pre-IPO – PHIP Updates – Concentration Risk Even More Apparent Now

IMotion Automotive Technology (1812706D CH) is looking to raise about US$100m in its upcoming HK IPO, after downsizing from an earlier reported float of US$300m.
The company possesses advanced full-stack R&D capabilities including self-developed algorithms and hardware-software co-design capabilities. It provides two AD domain controller product lines, and the self-designed iDC series.
We had covered the company’s performance in our earlier notes. In this note, we talk about its PHIP updates.

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Sep 14

Daily Brief Industrials: Takisawa Machine Tool, Contec, Seibu Giken , Greenland Technologies Holdi and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover
Contec IPO Preview
Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration
Update Note – Greenland Technologies Holding Corp.

Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover

By Travis Lundy

Nidec Corp (6594 JP) has had ambitions in machine tool space. They wanted to buy Takisawa Machine Tool (6121 JP) but Takisawa wouldn’t give them the time of day.
So Nidec announced hostile intentions and a 60-day period to negotiate. That’s done, and today they announced a now-friendly deal.
This looks like an easy done deal. There is one major risk factor remaining, then another consideration when thinking about path.

Contec IPO Preview

Contec is getting ready to complete an IPO on the KOSDAQ exchange in October 2023. The IPO price range is from 20,300 won to 22,500 won.
According to the bankers’ valuation, the expected IPO market cap is from 292 billion won to 324 billion won.
Contec was spun off from Korea Aerospace Research Institute and offers Space Ground Station Services and Satellite Image Processing & Application Services.

Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration

Seibu Giken (6223 JP) (SG) is looking to raise around US$120m in its Japan IPO via selling a mix of primary and secondary shares.
SG sells desiccant dehumidifiers and VOC concentrators in over fifty countries globally. Its two main products accounted for over 90% of its revenue in 2022.
In this note, we look at the company’s past performance.

Update Note – Greenland Technologies Holding Corp.

By Water Tower Research

Greenland Technologies announced it has won a bid from the Port of Baltimore to help facilitate the Port’s plan to electrify its operating equipment.
This will include sales of the HEVI GEL-5000, a five-ton rated all-electric wheeled front loader with a nine-hour operating cycle and a two-hour rapid charge time.
The first major sales win for HEVI, and one that we expect will accelerate product adoption.

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Sep 14

Daily Brief Industrials: Takisawa Machine Tool, Contec, Seibu Giken , Greenland Technologies Holdi and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover
Contec IPO Preview
Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration
Update Note – Greenland Technologies Holding Corp.

Nidec (6594) Turns Vinegar to Wine as Takisawa Machine Tool (6121) Agrees To Takeover

By Travis Lundy

Nidec Corp (6594 JP) has had ambitions in machine tool space. They wanted to buy Takisawa Machine Tool (6121 JP) but Takisawa wouldn’t give them the time of day.
So Nidec announced hostile intentions and a 60-day period to negotiate. That’s done, and today they announced a now-friendly deal.
This looks like an easy done deal. There is one major risk factor remaining, then another consideration when thinking about path.

Contec IPO Preview

Contec is getting ready to complete an IPO on the KOSDAQ exchange in October 2023. The IPO price range is from 20,300 won to 22,500 won.
According to the bankers’ valuation, the expected IPO market cap is from 292 billion won to 324 billion won.
Contec was spun off from Korea Aerospace Research Institute and offers Space Ground Station Services and Satellite Image Processing & Application Services.

Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration

Seibu Giken (6223 JP) (SG) is looking to raise around US$120m in its Japan IPO via selling a mix of primary and secondary shares.
SG sells desiccant dehumidifiers and VOC concentrators in over fifty countries globally. Its two main products accounted for over 90% of its revenue in 2022.
In this note, we look at the company’s past performance.

Update Note – Greenland Technologies Holding Corp.

By Water Tower Research

Greenland Technologies announced it has won a bid from the Port of Baltimore to help facilitate the Port’s plan to electrify its operating equipment.
This will include sales of the HEVI GEL-5000, a five-ton rated all-electric wheeled front loader with a nine-hour operating cycle and a two-hour rapid charge time.
The first major sales win for HEVI, and one that we expect will accelerate product adoption.

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Sep 13

Daily Brief Industrials: Doosan Robotics, IHI Corp, Recruit Holdings, R R Kabel, S.F. Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Robotics: Strong Initial Book Building Results
IHI (7013) | Brace for a ¥130b Charge
Doosan Robotics IPO – Updated Thoughts on Valuation – Sentiments Going Out of Control
Recruit Holdings: Weakening Job Markets and New Pricing Model to Impact HR Tech Further
R R Kabel IPO – Peer Comp & Thoughts on Valuation – Fifth in Market Share but First in Sales Growth
R R Kabel Ltd IPO- Forensic Analysis
SF Holdings A/H Listing – Recent Filing and Other Updates

Doosan Robotics: Strong Initial Book Building Results

Chosun Business Daily mentioned today that initial results of Doosan Robotics book building have been very strong. The current IPO price range is from 21,000 won to 26,000 won.
There is a high probability that the IPO price will be set at 26,000 won or more and close to 30,000 won.
Our base case valuation per share of Doosan Robotics is 42,826 won, which is 65% higher than the high end of the IPO valuation range.

IHI (7013) | Brace for a ¥130b Charge

By Mark Chadwick

IHI’s share price has declined 16% on news that Pratt & Whitney would need to ground more planes due to problems with its PW1100 turbofan engines
IHI has a 15% share of the revenue and risk from this program. The new engine was expected to be a major earnings driver over the next several years
We believe that IHI will be forced to revise down OP guidance to a loss. The bigger impact could be on FCF and future capex plans.

Doosan Robotics IPO – Updated Thoughts on Valuation – Sentiments Going Out of Control

Doosan Robotics (454910 KS) is looking to raise up to US$318m in its Korean IPO.
Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
In our previous notes, we assessed the company’s past performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we share our updated thoughts on valuation.

Recruit Holdings: Weakening Job Markets and New Pricing Model to Impact HR Tech Further

The job openings in the US declined to 8.827m in July 2023, marking the lowest since March 2021, and falling well below projected 9.465m job openings for the month.
On the other hand, web traffic on Recruit Holdings (6098 JP) ’s job platform Indeed has declined in July compared to June 2023 while it has improved slightly on Glassdoor.
HR Tech segment’s top line growth declined 9.1% YoY in 1QFY03/2024 and the company has shifted into a new pricing model which we think would further impact segment’s growth.

R R Kabel IPO – Peer Comp & Thoughts on Valuation – Fifth in Market Share but First in Sales Growth

R R Kabel (2333180Z IN) is looking to raise up to US$238m in its India IPO.
R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG).
In our previous notes, we looked at the company’s past performance. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

R R Kabel Ltd IPO- Forensic Analysis

By Nitin Mangal

R R Kabel (2333180Z IN) ‘s IPO will go live this week.
The company is the fifth largest player in the wires and cables market in India, having a market share of 5% overall and 7% among the branded players.
However, there our numerous aspects about the company and financials that warrant attention. These include RPT with promoters, misleading high CFO, promoter classification, high discounting, etc.

SF Holdings A/H Listing – Recent Filing and Other Updates

S.F. Holding (002352 CH) (SFH), China’s largest express delivery company, aims to raise around US$2-3bn in its H-share listing in Hong Kong.
SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017.
We have looked at the company’s past performance in our previous notes. In this note, we look at its recent updates.

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Sep 13

Daily Brief Industrials: Doosan Robotics, IHI Corp, Recruit Holdings, R R Kabel, S.F. Holding and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Robotics: Strong Initial Book Building Results
IHI (7013) | Brace for a ¥130b Charge
Doosan Robotics IPO – Updated Thoughts on Valuation – Sentiments Going Out of Control
Recruit Holdings: Weakening Job Markets and New Pricing Model to Impact HR Tech Further
R R Kabel IPO – Peer Comp & Thoughts on Valuation – Fifth in Market Share but First in Sales Growth
R R Kabel Ltd IPO- Forensic Analysis
SF Holdings A/H Listing – Recent Filing and Other Updates

Doosan Robotics: Strong Initial Book Building Results

Chosun Business Daily mentioned today that initial results of Doosan Robotics book building have been very strong. The current IPO price range is from 21,000 won to 26,000 won.
There is a high probability that the IPO price will be set at 26,000 won or more and close to 30,000 won.
Our base case valuation per share of Doosan Robotics is 42,826 won, which is 65% higher than the high end of the IPO valuation range.

IHI (7013) | Brace for a ¥130b Charge

By Mark Chadwick

IHI’s share price has declined 16% on news that Pratt & Whitney would need to ground more planes due to problems with its PW1100 turbofan engines
IHI has a 15% share of the revenue and risk from this program. The new engine was expected to be a major earnings driver over the next several years
We believe that IHI will be forced to revise down OP guidance to a loss. The bigger impact could be on FCF and future capex plans.

Doosan Robotics IPO – Updated Thoughts on Valuation – Sentiments Going Out of Control

Doosan Robotics (454910 KS) is looking to raise up to US$318m in its Korean IPO.
Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
In our previous notes, we assessed the company’s past performance, undertook a peer comparison and shared our thoughts on valuation. In this note, we share our updated thoughts on valuation.

Recruit Holdings: Weakening Job Markets and New Pricing Model to Impact HR Tech Further

The job openings in the US declined to 8.827m in July 2023, marking the lowest since March 2021, and falling well below projected 9.465m job openings for the month.
On the other hand, web traffic on Recruit Holdings (6098 JP) ’s job platform Indeed has declined in July compared to June 2023 while it has improved slightly on Glassdoor.
HR Tech segment’s top line growth declined 9.1% YoY in 1QFY03/2024 and the company has shifted into a new pricing model which we think would further impact segment’s growth.

R R Kabel IPO – Peer Comp & Thoughts on Valuation – Fifth in Market Share but First in Sales Growth

R R Kabel (2333180Z IN) is looking to raise up to US$238m in its India IPO.
R R Kabel is an Indian consumer electrical company, which primarily sells wires, cables and fast moving electrical goods (FMEG).
In our previous notes, we looked at the company’s past performance. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

R R Kabel Ltd IPO- Forensic Analysis

By Nitin Mangal

R R Kabel (2333180Z IN) ‘s IPO will go live this week.
The company is the fifth largest player in the wires and cables market in India, having a market share of 5% overall and 7% among the branded players.
However, there our numerous aspects about the company and financials that warrant attention. These include RPT with promoters, misleading high CFO, promoter classification, high discounting, etc.

SF Holdings A/H Listing – Recent Filing and Other Updates