Category

Industrials

May 17
0

Daily Brief Industrials: Penguin International, JD Industrials, Caverion Corp, TAV Havalimanlari Holding AS, Volkswagen (Pref), Braille Energy Systems and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Penguin Int’l (PBS SP): Chairman & Dymon’s Bumped & Final Offer
  • JD Industrials Pre-IPO: Pure Platform for Third Parties and Strong Support from Related Parties
  • Triton/Caverion: Drawing to a Close
  • TAV Airports (TAVHL TI): Mkt Leader, Best Growth Profile, Currency Hedged, Strong Mgmt
  • Liquid Universe of European Ordinary and Preferred Shares: May‘23 Report
  • BES: A Micro-Cap That Punches Above its Weight

Penguin Int’l (PBS SP): Chairman & Dymon’s Bumped & Final Offer

By David Blennerhassett

  • On the 4 May, Singapore-based builder and operator of aluminum high-speed boats Penguin International (PBS SP) announced a Voluntary Unconditional Offer from its Chairman and Dymon Group at S$.82/share. 
  • The Offer Price was a lifetime high and likely sufficient to push for compulsory acquisition. However, the Offerors have now sweetened terms to S$0.83/share. 
  • As to be expected, this is trading to terms. Volume remains light.

JD Industrials Pre-IPO: Pure Platform for Third Parties and Strong Support from Related Parties

By Ming Lu

  • JD Industrials is a pure trading platform for third party wholesalers.
  • The company avoids the competition with its clients and the risk of overdue account receivable.
  • JD Industrials has brand support from JD.com and logistics support form JD Logistics.

Triton/Caverion: Drawing to a Close

By Jesus Rodriguez Aguilar

  • Crayfish/Triton’s purchase price is the highest and now officially preferred by Caverion Corp (CAV1V FH)‘s Board of directors. The offer period for both offers expires on 17 May.
  • Caverion’s board advisors believe the offer will be finalized between October and February. Shares trade above Bain’s alternative consideration (lower chance to succeed) and Triton has already secured 29.9%.
  • Spread to Triton’s offer is 4%/7.9% (gross, annualised assuming settlement by  30 November), however the free float has been massively reduced, hence the liquidity too.

TAV Airports (TAVHL TI): Mkt Leader, Best Growth Profile, Currency Hedged, Strong Mgmt

By Vijay Lohia, CFA

  • TAV Airports is the #1 airport terminal operator in Turkey with a 31% passenger market share and 28% market share in commercial flights.
  • TAV has one of the best growth profile among peer group with expected 3 yr revenue CAGR of 10%-14% and EBITDA CAGR of 12%-18%.
  • Potential upside of over 50% in one year and over 200% in 4-5 years.

Liquid Universe of European Ordinary and Preferred Shares: May‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-April, spreads have generally widened across our liquid universe (12 have widened, 7 tightened). German spreads are tightening.
  • Recommended trades long ordinary / short preferred shares: Fuchs Petrolub, SSAB Svenska Stal, Roche.
  • Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

BES: A Micro-Cap That Punches Above its Weight

By Atrium Research

  • Braille Battery is a market leader in performance batteries for motorsports and racing vehicles.
  • Braille Battery has posted a 56% sales CAGR over the last four years and is soon to be profitable
  • BES will be launching a residential battery backup power system in the coming quarters with potential to gain major market share

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May 17
0

Daily Brief Industrials: Penguin International, JD Industrials, Caverion Corp, TAV Havalimanlari Holding AS, Volkswagen (Pref), Braille Energy Systems and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Penguin Int’l (PBS SP): Chairman & Dymon’s Bumped & Final Offer
  • JD Industrials Pre-IPO: Pure Platform for Third Parties and Strong Support from Related Parties
  • Triton/Caverion: Drawing to a Close
  • TAV Airports (TAVHL TI): Mkt Leader, Best Growth Profile, Currency Hedged, Strong Mgmt
  • Liquid Universe of European Ordinary and Preferred Shares: May‘23 Report
  • BES: A Micro-Cap That Punches Above its Weight

Penguin Int’l (PBS SP): Chairman & Dymon’s Bumped & Final Offer

By David Blennerhassett

  • On the 4 May, Singapore-based builder and operator of aluminum high-speed boats Penguin International (PBS SP) announced a Voluntary Unconditional Offer from its Chairman and Dymon Group at S$.82/share. 
  • The Offer Price was a lifetime high and likely sufficient to push for compulsory acquisition. However, the Offerors have now sweetened terms to S$0.83/share. 
  • As to be expected, this is trading to terms. Volume remains light.

JD Industrials Pre-IPO: Pure Platform for Third Parties and Strong Support from Related Parties

By Ming Lu

  • JD Industrials is a pure trading platform for third party wholesalers.
  • The company avoids the competition with its clients and the risk of overdue account receivable.
  • JD Industrials has brand support from JD.com and logistics support form JD Logistics.

Triton/Caverion: Drawing to a Close

By Jesus Rodriguez Aguilar

  • Crayfish/Triton’s purchase price is the highest and now officially preferred by Caverion Corp (CAV1V FH)‘s Board of directors. The offer period for both offers expires on 17 May.
  • Caverion’s board advisors believe the offer will be finalized between October and February. Shares trade above Bain’s alternative consideration (lower chance to succeed) and Triton has already secured 29.9%.
  • Spread to Triton’s offer is 4%/7.9% (gross, annualised assuming settlement by  30 November), however the free float has been massively reduced, hence the liquidity too.

TAV Airports (TAVHL TI): Mkt Leader, Best Growth Profile, Currency Hedged, Strong Mgmt

By Vijay Lohia, CFA

  • TAV Airports is the #1 airport terminal operator in Turkey with a 31% passenger market share and 28% market share in commercial flights.
  • TAV has one of the best growth profile among peer group with expected 3 yr revenue CAGR of 10%-14% and EBITDA CAGR of 12%-18%.
  • Potential upside of over 50% in one year and over 200% in 4-5 years.

Liquid Universe of European Ordinary and Preferred Shares: May‘23 Report

By Jesus Rodriguez Aguilar

  • Since mid-April, spreads have generally widened across our liquid universe (12 have widened, 7 tightened). German spreads are tightening.
  • Recommended trades long ordinary / short preferred shares: Fuchs Petrolub, SSAB Svenska Stal, Roche.
  • Recommended trades long preferred / short ordinary shares: Carlsberg, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.

BES: A Micro-Cap That Punches Above its Weight

By Atrium Research

  • Braille Battery is a market leader in performance batteries for motorsports and racing vehicles.
  • Braille Battery has posted a 56% sales CAGR over the last four years and is soon to be profitable
  • BES will be launching a residential battery backup power system in the coming quarters with potential to gain major market share

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May 16
0

Daily Brief Industrials: Penguin International, Krones AG, Doosan Enerbility, Recruit Holdings, JD Logistics, Growatt Technology and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83
  • Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index
  • NPS: Increasing Capital Allocation to More Defensive Stocks in Korea
  • Recruit 4Q: Earnings Growth to Decline as Labour Markets Begin to Slowdown
  • [JD Logistics (2618 HK, SELL) Earnings Review]: Declining Customer Count Isn’t a Good Sign
  • Growatt Technology Pre-IPO – Latest Thoughts on Valuation

Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83

By Arun George

  • Penguin International (PBS SP) disclosed a revised and final voluntary unconditional offer from Dymon Asia, Executive Chairman and Managing Director at S$0.83, a 16.9% premium to the undisturbed price. 
  • Unlike the previous offer, the final offer will not be reduced for the FY22 dividend. The final offer price is attractive and represents a 10-year share price high. 
  • An attractive offer makes it also likely that the offeror hits the 90% compulsory acquisition threshold, which requires a minority acceptance rate of around 44%.

Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at Quiddity’s estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
  • As things stand, there will not be any ADDs or DELs from the DAX index or the SDAX index.
  • There could be two ADDs/DELs for the MDAX index in the June 2023 rebalance.

NPS: Increasing Capital Allocation to More Defensive Stocks in Korea

By Douglas Kim

  • In this insight, we discuss the recent Korean stock portfolio allocation changes by the NPS.
  • The data suggests that NPS has been increasing its holdings into more defensive sectors such as insurance, convenience stores, and industrials. 
  • On the other hand, it has been decreasing capital allocation in consumer discretionary related stocks.

Recruit 4Q: Earnings Growth to Decline as Labour Markets Begin to Slowdown

By Shifara Samsudeen, ACMA, CGMA

  • Recruit Holdings (6098 JP) reported FQ4 and full-year FY03/2023 results. FQ4 revenue increased 9.0% YoY to ¥827.7bn (vs consensus ¥846.7bn) while OP decreased 57.1% YoY to ¥19.4bn (vs consensus ¥40.0bn).
  • Excluding restructuring charges and one-time charge on impairment losses on right-of-use assets, OP increased 12.4% YoY to ¥50.9bn resulting in an OPM of 6.1% vs 6.0% in 4QFY03/2023.
  • Recruit’s FY03/2024E guidance is in line with our expectation where the company expects earnings to weaken as labour markets have begun to slowdown.

[JD Logistics (2618 HK, SELL) Earnings Review]: Declining Customer Count Isn’t a Good Sign

By Shawn Yang

  • JDL reported 1Q23 revenue that is 2.2% vs. our est. and cons., and non-IFRS net loss that was 32% vs. our est., and 18% vs. cons. 
  • We have concerns about 1) the declining number of external integrated supply chain (ISC) customers; 
  • And 2) declining gross margin, which demonstrate the effects of JD’s low-price strategy, in our view; We maintain JDL’s SELL rating and HK$ 9.20 TP.

Growatt Technology Pre-IPO – Latest Thoughts on Valuation

By Ethan Aw

  • Growatt Technology (1833969D CH) is looking to raise about US$400m in its upcoming Hong Kong IPO, after downsizing from an earlier US$1bn float in Nov 2022.
  • Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
  • Previously, we looked at the company’s past performance, peer comparison and shared our earlier thoughts on valuation. In this note, we will provide our latest thoughts on valuation.

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May 16
0

Daily Brief Industrials: Penguin International, Krones AG, Doosan Enerbility, Recruit Holdings, JD Logistics, Growatt Technology and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83
  • Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index
  • NPS: Increasing Capital Allocation to More Defensive Stocks in Korea
  • Recruit 4Q: Earnings Growth to Decline as Labour Markets Begin to Slowdown
  • [JD Logistics (2618 HK, SELL) Earnings Review]: Declining Customer Count Isn’t a Good Sign
  • Growatt Technology Pre-IPO – Latest Thoughts on Valuation

Penguin International (PBS SP): Dymon Asia’s Unconditional and Final Offer of S$0.83

By Arun George

  • Penguin International (PBS SP) disclosed a revised and final voluntary unconditional offer from Dymon Asia, Executive Chairman and Managing Director at S$0.83, a 16.9% premium to the undisturbed price. 
  • Unlike the previous offer, the final offer will not be reduced for the FY22 dividend. The final offer price is attractive and represents a 10-year share price high. 
  • An attractive offer makes it also likely that the offeror hits the 90% compulsory acquisition threshold, which requires a minority acceptance rate of around 44%.

Quiddity Leaderboard-DAX Jun 23: Two Changes for the MDAX Index

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at Quiddity’s estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
  • As things stand, there will not be any ADDs or DELs from the DAX index or the SDAX index.
  • There could be two ADDs/DELs for the MDAX index in the June 2023 rebalance.

NPS: Increasing Capital Allocation to More Defensive Stocks in Korea

By Douglas Kim

  • In this insight, we discuss the recent Korean stock portfolio allocation changes by the NPS.
  • The data suggests that NPS has been increasing its holdings into more defensive sectors such as insurance, convenience stores, and industrials. 
  • On the other hand, it has been decreasing capital allocation in consumer discretionary related stocks.

Recruit 4Q: Earnings Growth to Decline as Labour Markets Begin to Slowdown

By Shifara Samsudeen, ACMA, CGMA

  • Recruit Holdings (6098 JP) reported FQ4 and full-year FY03/2023 results. FQ4 revenue increased 9.0% YoY to ¥827.7bn (vs consensus ¥846.7bn) while OP decreased 57.1% YoY to ¥19.4bn (vs consensus ¥40.0bn).
  • Excluding restructuring charges and one-time charge on impairment losses on right-of-use assets, OP increased 12.4% YoY to ¥50.9bn resulting in an OPM of 6.1% vs 6.0% in 4QFY03/2023.
  • Recruit’s FY03/2024E guidance is in line with our expectation where the company expects earnings to weaken as labour markets have begun to slowdown.

[JD Logistics (2618 HK, SELL) Earnings Review]: Declining Customer Count Isn’t a Good Sign

By Shawn Yang

  • JDL reported 1Q23 revenue that is 2.2% vs. our est. and cons., and non-IFRS net loss that was 32% vs. our est., and 18% vs. cons. 
  • We have concerns about 1) the declining number of external integrated supply chain (ISC) customers; 
  • And 2) declining gross margin, which demonstrate the effects of JD’s low-price strategy, in our view; We maintain JDL’s SELL rating and HK$ 9.20 TP.

Growatt Technology Pre-IPO – Latest Thoughts on Valuation

By Ethan Aw

  • Growatt Technology (1833969D CH) is looking to raise about US$400m in its upcoming Hong Kong IPO, after downsizing from an earlier US$1bn float in Nov 2022.
  • Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
  • Previously, we looked at the company’s past performance, peer comparison and shared our earlier thoughts on valuation. In this note, we will provide our latest thoughts on valuation.

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May 15
0

Daily Brief Industrials: Toshiba Corp, Horizon Construction Development, Jiangsu Expressway (H), Lian Beng and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction
  • Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation
  • Jiangsu Expressway (177 HK): A Decent Play Even After Rally
  • Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair

Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction

By Arun George

Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation

By Ethan Aw

  • Horizon Construction Development (1887128D HK) is looking to raise US$223m in its upcoming Hong Kong IPO.
  • HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
  • In our previous notes, we looked at the company’s past performance and refiled PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

Jiangsu Expressway (177 HK): A Decent Play Even After Rally

By Osbert Tang, CFA

  • We find good value in Jiangsu Expressway (H) (177 HK) – its 8.3x PER is cheap relative to 10.4% EPS CAGR and P/B multiple of 1.06x is below historical average.
  • It has an extremely secured dividend stream for the next two years, yielding at least 6.3%. 1Q23 result showed a solid recovery, and potentially adding upside to earnings outlook.
  • Key drivers are stronger traffic recovery, rise in contribution from clean energy, margin expansion through cost control and completion of new projects in the next two years.

Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair

By David Blennerhassett

  • In response to media feedback calling out the low-balled Offer, the Ong family bumped the Offer Price for Lian Beng (LBG SP) by 9.7% to S$0.68/share and declared terms final.
  • At 0.43x P/RNAV, and with the bulk of the assets related to investment/development property, the price was still wrong,  
  • The Circular is now out. The IFA considered terms to be not fair and not reasonable. The same opinion as in the 2021 Offer.

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May 15
0

Daily Brief Industrials: Toshiba Corp, Horizon Construction Development, Jiangsu Expressway (H), Lian Beng and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction
  • Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation
  • Jiangsu Expressway (177 HK): A Decent Play Even After Rally
  • Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair

Weekly Deals Digest (14 May) – Toshiba, Arteria, Shinsei, Yitai Coal, Allkem, Horizon Construction

By Arun George

Horizon Construction Development IPO – Peer Comparison & Thoughts on Valuation

By Ethan Aw

  • Horizon Construction Development (1887128D HK) is looking to raise US$223m in its upcoming Hong Kong IPO.
  • HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
  • In our previous notes, we looked at the company’s past performance and refiled PHIP updates. In this note, we undertake a quick peer comparison and share our thoughts on valuation.

Jiangsu Expressway (177 HK): A Decent Play Even After Rally

By Osbert Tang, CFA

  • We find good value in Jiangsu Expressway (H) (177 HK) – its 8.3x PER is cheap relative to 10.4% EPS CAGR and P/B multiple of 1.06x is below historical average.
  • It has an extremely secured dividend stream for the next two years, yielding at least 6.3%. 1Q23 result showed a solid recovery, and potentially adding upside to earnings outlook.
  • Key drivers are stronger traffic recovery, rise in contribution from clean energy, margin expansion through cost control and completion of new projects in the next two years.

Lian Beng: Circ Out. IFA (Rightfully) Says Not Fair

By David Blennerhassett

  • In response to media feedback calling out the low-balled Offer, the Ong family bumped the Offer Price for Lian Beng (LBG SP) by 9.7% to S$0.68/share and declared terms final.
  • At 0.43x P/RNAV, and with the bulk of the assets related to investment/development property, the price was still wrong,  
  • The Circular is now out. The IFA considered terms to be not fair and not reasonable. The same opinion as in the 2021 Offer.

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May 14
0

Daily Brief Industrials: Mitsubishi Corp, Dong Yang P&F and more

By | Daily Briefs, Industrials

In today’s briefing:

  • JAPAN BUYBACKS:  A Very Big Week
  • A Crash in 2 More Korean Stocks Related to CFD Derivatives: Margin Calls Again
  • Last Week in Event SPACE: MitCorp, Jardine Matheson, Toshiba, Japanese Foreign Inflows

JAPAN BUYBACKS:  A Very Big Week

By Travis Lundy

  • This past week, nearly 150 companies in Japan announced buyback programmes totalling ¥2.1trln. 3 Tenders, 26 ToSTNeT-3 buybacks (including at least 5 delayed starts). 
  • The median on-market buyback was 2.40% of shares, the average 2.9% (both measured as practical maxima at announcement. Median/Average % of ADV was 7.6/9.2%. 
  • My prediction that this will be a record year for stock buybacks still stands.

A Crash in 2 More Korean Stocks Related to CFD Derivatives: Margin Calls Again

By Douglas Kim

  • In this insight, we discuss two stocks in Korea, Dong Yang P&F and Shindaeyang Paper, whose share prices declined sharply on 12 May.
  • It appears that the main culprit behind their collapse in share price appears to be unwinding of the excessive leverage (especially CFD derivatives trading).
  • Post the sharp decline in their share price for DYPNF and Shindeyang Paper on 12 May, further downside is likely on these stocks in the coming weeks.

Last Week in Event SPACE: MitCorp, Jardine Matheson, Toshiba, Japanese Foreign Inflows

By David Blennerhassett

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May 14
0

Daily Brief Industrials: Mitsubishi Corp, Dong Yang P&F and more

By | Daily Briefs, Industrials

In today’s briefing:

  • JAPAN BUYBACKS:  A Very Big Week
  • A Crash in 2 More Korean Stocks Related to CFD Derivatives: Margin Calls Again
  • Last Week in Event SPACE: MitCorp, Jardine Matheson, Toshiba, Japanese Foreign Inflows

JAPAN BUYBACKS:  A Very Big Week

By Travis Lundy

  • This past week, nearly 150 companies in Japan announced buyback programmes totalling ¥2.1trln. 3 Tenders, 26 ToSTNeT-3 buybacks (including at least 5 delayed starts). 
  • The median on-market buyback was 2.40% of shares, the average 2.9% (both measured as practical maxima at announcement. Median/Average % of ADV was 7.6/9.2%. 
  • My prediction that this will be a record year for stock buybacks still stands.

A Crash in 2 More Korean Stocks Related to CFD Derivatives: Margin Calls Again

By Douglas Kim

  • In this insight, we discuss two stocks in Korea, Dong Yang P&F and Shindaeyang Paper, whose share prices declined sharply on 12 May.
  • It appears that the main culprit behind their collapse in share price appears to be unwinding of the excessive leverage (especially CFD derivatives trading).
  • Post the sharp decline in their share price for DYPNF and Shindeyang Paper on 12 May, further downside is likely on these stocks in the coming weeks.

Last Week in Event SPACE: MitCorp, Jardine Matheson, Toshiba, Japanese Foreign Inflows

By David Blennerhassett

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May 13
0

Daily Brief Industrials: Horizon Construction Development, Ushio Inc, C.H. Robinson Worldwide, AEye, Old Dominion Freight Line, Otis Worldwide Corp, Paccar Inc, NOW Inc, Fortive Corp, Norfolk Southern and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Horizon Construction Development IPO: Valuation Insights
  • HUUUGE Ushio (6925) Buyback
  • C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers
  • AEYE, INC – Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well
  • Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers
  • Otis Worldwide Corporation: The Moat Source That Helps It Thrive In An Oligopolistic Market – Major Drivers
  • PACCAR Inc.: Renewed Growth
  • NOW, INC. – 1Q23 Solid Start to the Year
  • Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers
  • Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers

Horizon Construction Development IPO: Valuation Insights

By Arun George

HUUUGE Ushio (6925) Buyback

By Travis Lundy

  • Ushio Inc (6925 JP) reported earnings on 11 May, with revenue +17.6% on the year, OP +21.4%, and NP +8.7% on the year. Div was unchanged at ¥50/share.
  • Forecasts are for revenue +7.4%, OP -21.2%, and NP -27% (¥90.6/EPS). But importantly, the company also announced a HUUUUUGE Buyback. 
  • Buying ≦20mm shares (17.0%) spending ≦¥30bn from 29May2023 to 10May2024. That’s 13.3% at the 12 May close. How this will work is unknown. There’s less detail than one would want.

C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers

By Baptista Research

  • C.H.
  • Robinson had a disappointing result in Q1 and it failed to meet the revenue expectations and earnings expectations of analysts.
  • They believe that an increased digitization and automation are critical components of providing an improved client experience and operating leverage.

AEYE, INC – Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well

By Water Tower Research

  • 1Q23 revenue came in at the midpoint of guidance at $0.6 million.
  • CEO Matt Fisch has been making changes and said that after “a comprehensive review of AEye’s business, it was clear that we needed to intensify our focus on automotive and our path to commercialization with Continental, while aligning our resources with this streamlined business model.”
  • The company’s automotive-first strategy, capital-light model, and strategic partnership with Continental should position it well in the upcoming LiDAR market. 

Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers

By Baptista Research

  • Old Dominion Freight Line produced a highly disappointing set of results as a result of the persistent downturn in the local economy and the volume decline.
  • The revenue decline and slight deterioration in Old Dominion’s operating ratio caused the earnings per diluted share for the quarter to decline by 0.8% to $2.58.
  • We give Old Dominion Freight Line an ‘Underperform’ rating with a revised target price.

Otis Worldwide Corporation: The Moat Source That Helps It Thrive In An Oligopolistic Market – Major Drivers

By Baptista Research

  • Despite ongoing market volatility, Otis Worldwide Corporation produced a good first quarter to begin 2023, delivering an all-around beat.
  • Otis’s service division’s contribution to organic sales growth allowed it to increase adjusted service operating profit margins by 40 basis points, which resulted in mid-single-digit adjusted EPS growth.
  • We give Otis Worldwide Corporation a ‘Hold’ rating with a revised target price.

PACCAR Inc.: Renewed Growth

By Baptista Research

  • PACCAR had a strong first quarter and the company achieved revenues and net income that were well above market expectations, driven by strong demand for trucks, parts, and financial services.
  • PACCAR’s management attributes this growth to its investments in new truck models, global expansion, and the strong performance of PACCAR Parts.
  • PACCAR Financial, the company’s financial services arm, also had an excellent quarter, achieving a pretax income of $149 million, similar to the same quarter of last year.

NOW, INC. – 1Q23 Solid Start to the Year

By Water Tower Research

  • DistributionNOW’s 1Q23 revenue totaled $584 million, a 23% Y/Y increase and a 7% increase from 4Q22.
  • US revenue climbed 28% Y/Y, while International revenue climbed by 30%.
  • Canadian revenue was 1% higher.  The US contributed 73% of total revenue in the quarter.

Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers

By Baptista Research

  • Fortive Corporation made a solid start to the year, achieving sales, margins, and higher profitability than Wall Street expectations in the first quarter.
  • Each of their key regions experienced another quarter of rapid sales growth.
  • Precision Technologies also reported another quarter of double-digit core revenue growth or a 14% revenue increase.

Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers

By Baptista Research

  • Norfolk Southern Corporation delivered strong results in the quarter with revenues in accordance with analyst expectations and managed an earnings beat.
  • However, these improvements boosted the company’s network’s reliability and made it even more productive.
  • We give Norfolk Southern Corporation a ‘Hold’ rating with a revised target price.

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May 13
0

Daily Brief Industrials: Horizon Construction Development, Ushio Inc, C.H. Robinson Worldwide, AEye, Old Dominion Freight Line, Otis Worldwide Corp, Paccar Inc, NOW Inc, Fortive Corp, Norfolk Southern and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Horizon Construction Development IPO: Valuation Insights
  • HUUUGE Ushio (6925) Buyback
  • C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers
  • AEYE, INC – Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well
  • Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers
  • Otis Worldwide Corporation: The Moat Source That Helps It Thrive In An Oligopolistic Market – Major Drivers
  • PACCAR Inc.: Renewed Growth
  • NOW, INC. – 1Q23 Solid Start to the Year
  • Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers
  • Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers

Horizon Construction Development IPO: Valuation Insights

By Arun George

HUUUGE Ushio (6925) Buyback

By Travis Lundy

  • Ushio Inc (6925 JP) reported earnings on 11 May, with revenue +17.6% on the year, OP +21.4%, and NP +8.7% on the year. Div was unchanged at ¥50/share.
  • Forecasts are for revenue +7.4%, OP -21.2%, and NP -27% (¥90.6/EPS). But importantly, the company also announced a HUUUUUGE Buyback. 
  • Buying ≦20mm shares (17.0%) spending ≦¥30bn from 29May2023 to 10May2024. That’s 13.3% at the 12 May close. How this will work is unknown. There’s less detail than one would want.

C.H. Robinson Worldwide: Can Automation & Digitization Save The Day? – Major Drivers

By Baptista Research

  • C.H.
  • Robinson had a disappointing result in Q1 and it failed to meet the revenue expectations and earnings expectations of analysts.
  • They believe that an increased digitization and automation are critical components of providing an improved client experience and operating leverage.

AEYE, INC – Automotive-First, Capital-Light, and Partnership with Continental Position AEye Well

By Water Tower Research

  • 1Q23 revenue came in at the midpoint of guidance at $0.6 million.
  • CEO Matt Fisch has been making changes and said that after “a comprehensive review of AEye’s business, it was clear that we needed to intensify our focus on automotive and our path to commercialization with Continental, while aligning our resources with this streamlined business model.”
  • The company’s automotive-first strategy, capital-light model, and strategic partnership with Continental should position it well in the upcoming LiDAR market. 

Old Dominion Freight Line Inc.: Is The Bad Result A Sign Of Trouble Or A Bargain? – Major Drivers

By Baptista Research

  • Old Dominion Freight Line produced a highly disappointing set of results as a result of the persistent downturn in the local economy and the volume decline.
  • The revenue decline and slight deterioration in Old Dominion’s operating ratio caused the earnings per diluted share for the quarter to decline by 0.8% to $2.58.
  • We give Old Dominion Freight Line an ‘Underperform’ rating with a revised target price.

Otis Worldwide Corporation: The Moat Source That Helps It Thrive In An Oligopolistic Market – Major Drivers

By Baptista Research

  • Despite ongoing market volatility, Otis Worldwide Corporation produced a good first quarter to begin 2023, delivering an all-around beat.
  • Otis’s service division’s contribution to organic sales growth allowed it to increase adjusted service operating profit margins by 40 basis points, which resulted in mid-single-digit adjusted EPS growth.
  • We give Otis Worldwide Corporation a ‘Hold’ rating with a revised target price.

PACCAR Inc.: Renewed Growth

By Baptista Research

  • PACCAR had a strong first quarter and the company achieved revenues and net income that were well above market expectations, driven by strong demand for trucks, parts, and financial services.
  • PACCAR’s management attributes this growth to its investments in new truck models, global expansion, and the strong performance of PACCAR Parts.
  • PACCAR Financial, the company’s financial services arm, also had an excellent quarter, achieving a pretax income of $149 million, similar to the same quarter of last year.

NOW, INC. – 1Q23 Solid Start to the Year

By Water Tower Research

  • DistributionNOW’s 1Q23 revenue totaled $584 million, a 23% Y/Y increase and a 7% increase from 4Q22.
  • US revenue climbed 28% Y/Y, while International revenue climbed by 30%.
  • Canadian revenue was 1% higher.  The US contributed 73% of total revenue in the quarter.

Fortive Corporation: What You Need To Know About The Q1 Success & Why It Matters – Key Drivers

By Baptista Research

  • Fortive Corporation made a solid start to the year, achieving sales, margins, and higher profitability than Wall Street expectations in the first quarter.
  • Each of their key regions experienced another quarter of rapid sales growth.
  • Precision Technologies also reported another quarter of double-digit core revenue growth or a 14% revenue increase.

Norfolk Southern Corporation: Improved Network Reliability and Productivity Saving The Day? – Major Drivers

By Baptista Research

  • Norfolk Southern Corporation delivered strong results in the quarter with revenues in accordance with analyst expectations and managed an earnings beat.
  • However, these improvements boosted the company’s network’s reliability and made it even more productive.
  • We give Norfolk Southern Corporation a ‘Hold’ rating with a revised target price.

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