Industrials

• We believe Toshiba guidance could be meaningfully lower than consensus estimates project. 
• While we expect some conservatism across industrial segments this could easily be offset by prolonged stagnation on the tech side. 
• Given concerning signs for NAND we believe weak guidance could shake confidence in deal funding.

• SCG Chemicals (SCGC TB) (SCGC) is looking to raise around US$1bn in its upcoming Thailand IPO.
• SCG Chemicals, a part of the SCC group, is an integrated chemicals player in ASEAN, involved primarily in manufacturing, marketing and selling a diversified range of petrochemical products.
• In this note, we talk about the not-so-positive aspects of the deal.

• We believe Toshiba guidance could be meaningfully lower than consensus estimates project. 
• While we expect some conservatism across industrial segments this could easily be offset by prolonged stagnation on the tech side. 
• Given concerning signs for NAND we believe weak guidance could shake confidence in deal funding.

• SCG Chemicals (SCGC TB) (SCGC) is looking to raise around US$1bn in its upcoming Thailand IPO.
• SCG Chemicals, a part of the SCC group, is an integrated chemicals player in ASEAN, involved primarily in manufacturing, marketing and selling a diversified range of petrochemical products.
• In this note, we talk about the not-so-positive aspects of the deal.

• Mitsubishi Corp (8058 JP) yesterday announced earnings, forecast for FY23, higher dividend guidance, and a buyback. The headline number is 6% of shares and ¥300bn (which is nearer 4% now).
• ¥200bn of that ¥300bn is actually FY2022 “Additional Return” tacked onto a ¥100bn buyback for this year (FY23).  
• As is often the case, Shareholder Structure Matters. Because Berkshire Hathaway owns a large chunk of stock (7.4% according to interviews), that carves out a fair chunk not for sale.

• Diaper-Making machine maker Zuiko Corp (6279 JP) late last year introduced a shareholder benefit coupon program, and the stock has flown. Earnings improved from the trough too. 
• Now that the market cap is high enough, the company has applied to, and is now approved, to join TSE Prime, which means a TOPIX inclusion at end-June 2023.
• With 30 days of 6mo ADV, and much more of longer average ADV, this looks like a win, but there are…. considerations. Shareholder structure matters. Yet again. 

• SCG Chemicals (SCGC TB) (SCGC) is looking to raise around US$1bn in its upcoming Thailand IPO.
• SCG Chemicals, a part of the SCC group, is an integrated chemicals player in ASEAN, involved primarily in manufacturing, marketing and selling a diversified range of petrochemical products.
• In this note, we talk about the positive aspects of the deal.

• One of the biggest breakthroughs in the global EV rechargeable battery industry this year has been CATL and BYD’s launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023.
• This is expected to take away market share from Korean EV battery makers including LG Energy Solution and Samsung SDI.
• It is expected that eventually, that sodium-ion batteries could be about 30-40% cheaper than conventional lithium-ion batteries.

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

• On May 9, HNI reported better-than-expected results, boosted by unexpected strength in Workplace Furnishings (WF) sales and a strong defense of margins in Residential Building Products (RBP) despite weak Hearth Products sales.
• 1Q23 GAAP EPS was $0.04 and $0.13 non-GAAP (adjusted) versus consensus of ($0.02) GAAP and ($0.03) non-GAAP (adjusted). Our non-GAAP (adjusted) forecast was ($0.02).
• Management noted improving results in its WF segment, driven by productivity and cost-cutting.

• Impressive backlog stands at €13.06bn and implies a backlog/revenue ratio of 4x.
• P/E of 10x and EV/EBITDA below 5x, trading below peers.
• Investment case includes feedback from our conversation with IR. Company perception should improve 

• T.S. Lines (TSL HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
• T.S. Lines (TSL) is a container shipping firm primarily operating in the Asia Pacific (APAC) region.
• As of Dec 22, its container shipping network covers a total of 24 countries and regions, 63 major ports and 42 services globally.

• ACCO reported first quarter results reaffirming the outlook provided three months ago where the business should begin to see gradual increase in orders from retailers later this year
• Retailers have reverted to their prior ordering patterns where much of the inventory carried is for the back-to-school shopping season
• ACCO reporting quarterly sales above $400 million did little to squash the concern related to sales declining in the first half of the year

• Mitsubishi Corp (8058 JP) yesterday announced earnings, forecast for FY23, higher dividend guidance, and a buyback. The headline number is 6% of shares and ¥300bn (which is nearer 4% now).
• ¥200bn of that ¥300bn is actually FY2022 “Additional Return” tacked onto a ¥100bn buyback for this year (FY23).  
• As is often the case, Shareholder Structure Matters. Because Berkshire Hathaway owns a large chunk of stock (7.4% according to interviews), that carves out a fair chunk not for sale.

• Diaper-Making machine maker Zuiko Corp (6279 JP) late last year introduced a shareholder benefit coupon program, and the stock has flown. Earnings improved from the trough too. 
• Now that the market cap is high enough, the company has applied to, and is now approved, to join TSE Prime, which means a TOPIX inclusion at end-June 2023.
• With 30 days of 6mo ADV, and much more of longer average ADV, this looks like a win, but there are…. considerations. Shareholder structure matters. Yet again. 

• SCG Chemicals (SCGC TB) (SCGC) is looking to raise around US$1bn in its upcoming Thailand IPO.
• SCG Chemicals, a part of the SCC group, is an integrated chemicals player in ASEAN, involved primarily in manufacturing, marketing and selling a diversified range of petrochemical products.
• In this note, we talk about the positive aspects of the deal.

• One of the biggest breakthroughs in the global EV rechargeable battery industry this year has been CATL and BYD’s launch of hybrid sodium-ion and lithium-ion batteries in 2H 2023.
• This is expected to take away market share from Korean EV battery makers including LG Energy Solution and Samsung SDI.
• It is expected that eventually, that sodium-ion batteries could be about 30-40% cheaper than conventional lithium-ion batteries.

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

• On May 9, HNI reported better-than-expected results, boosted by unexpected strength in Workplace Furnishings (WF) sales and a strong defense of margins in Residential Building Products (RBP) despite weak Hearth Products sales.
• 1Q23 GAAP EPS was $0.04 and $0.13 non-GAAP (adjusted) versus consensus of ($0.02) GAAP and ($0.03) non-GAAP (adjusted). Our non-GAAP (adjusted) forecast was ($0.02).
• Management noted improving results in its WF segment, driven by productivity and cost-cutting.

• Impressive backlog stands at €13.06bn and implies a backlog/revenue ratio of 4x.
• P/E of 10x and EV/EBITDA below 5x, trading below peers.
• Investment case includes feedback from our conversation with IR. Company perception should improve 

• T.S. Lines (TSL HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
• T.S. Lines (TSL) is a container shipping firm primarily operating in the Asia Pacific (APAC) region.
• As of Dec 22, its container shipping network covers a total of 24 countries and regions, 63 major ports and 42 services globally.

• ACCO reported first quarter results reaffirming the outlook provided three months ago where the business should begin to see gradual increase in orders from retailers later this year
• Retailers have reverted to their prior ordering patterns where much of the inventory carried is for the back-to-school shopping season
• ACCO reporting quarterly sales above $400 million did little to squash the concern related to sales declining in the first half of the year

• We believe Kioxia’s results present a significant risk to financing for JIP’s Toshiba bid. 
• Recent commentary from companies increasingly points to the potential for an L-shaped recovery rather than a U-shaped one. 
• In addition, if conditions remain as challenging as they have been or worsen it is not inconceivable for Kioxia to require more capital.

• Toshiba Corp (6502 JP) reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. 
• The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer’s success ultimately depends on shareholder backing, particularly from the activists on the register.
• Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.

• Activist Strategic Capital has made shareholder noise at civil engineer-road infra company Seikitokyu Kogyo (1898 JP) for years. Two years ago I wrote about Seikitokyu as “A REALLY Cheap Company.”
• When I wrote, it was ¥885/share. 23 months later it was ¥824/share having paid ¥60/share over two years. Despite having bought back 10% of shares outstanding in the interim.
• Today they announced a radical new Shareholder Return Policy. It is worth reading in detail. The insight is labelled BEARISH for a specific reason. That’s a detail too. 

• Kawasaki Kisen Kaisha (9107 JP) has been a high conviction long since early November when it reported Q2 earnings and a buyback. Buyback executed, they upped the dividend.
• At Q3, earnings were downgraded from ¥700bn to ¥650bn on container biz weakness. FY22 ended at ¥695bn. March 2024 had been forecast at ¥106bn, the forecast is now ¥120bn.
• The dividend has been “lowered” to ¥200/share, which is higher than expected. That’s for this year.

• Recruit Holdings (6098 JP) will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.
• The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.
• Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.

• AviChina Industry & Technology (2357 HK) remains cheap with 3-year earnings CAGR of 17.4% but only 11x PER. It also trades on 55% discount to value of its A-share subsidiaries.
• Aggregate earnings for its four A-share listed subsidiaries grew a solid 26.8% in 1Q23, even faster than AviChina Industry’s FY23F earnings growth of 21.5%. 
• China is expected to increase military spending to narrow the gap against the US going forward. AviChina stays best exposed to such growth in defense demand.

• General Dynamics had a strong quarter and managed an all-around beat with an improving order book position and a company-wide book-to-bill ratio of 0.9:1.
• The Combat Systems group saw particularly robust order activity with a book-to-bill ratio of 5x.
• While Aerospace & Technologies continues to deliver strong cash performance, the Combat Systems group, in particular, produced exceptional free cash flow this quarter.

• Waste Management is off to a good start in 2023, with first-quarter performance exceeding analyst expectations.
• Collection and disposal volume also increased by 0.8% in the first quarter.
• Waste Management believes it is poised for another year of robust financial growth in 2023.

• After a series of bad results, Boeing managed a mixed quarter to start the year as its revenues were above Wall Street expectations though company reported wider-than-expected losses.
• However, Boeing still expects to deliver 450 737 airplanes this year and plans to increase its rate to 38 per month later this year.
• The company also delivered 130 commercial airplanes in the quarter, steadily increasing rates across critical programs to meet robust demand.

• We believe Kioxia’s results present a significant risk to financing for JIP’s Toshiba bid. 
• Recent commentary from companies increasingly points to the potential for an L-shaped recovery rather than a U-shaped one. 
• In addition, if conditions remain as challenging as they have been or worsen it is not inconceivable for Kioxia to require more capital.

• Toshiba Corp (6502 JP) reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. 
• The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer’s success ultimately depends on shareholder backing, particularly from the activists on the register.
• Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.

• Activist Strategic Capital has made shareholder noise at civil engineer-road infra company Seikitokyu Kogyo (1898 JP) for years. Two years ago I wrote about Seikitokyu as “A REALLY Cheap Company.”
• When I wrote, it was ¥885/share. 23 months later it was ¥824/share having paid ¥60/share over two years. Despite having bought back 10% of shares outstanding in the interim.
• Today they announced a radical new Shareholder Return Policy. It is worth reading in detail. The insight is labelled BEARISH for a specific reason. That’s a detail too. 

• Kawasaki Kisen Kaisha (9107 JP) has been a high conviction long since early November when it reported Q2 earnings and a buyback. Buyback executed, they upped the dividend.
• At Q3, earnings were downgraded from ¥700bn to ¥650bn on container biz weakness. FY22 ended at ¥695bn. March 2024 had been forecast at ¥106bn, the forecast is now ¥120bn.
• The dividend has been “lowered” to ¥200/share, which is higher than expected. That’s for this year.

• Recruit Holdings (6098 JP) will report FQ4 results on 15th May. Consensus expectations are ¥844.4bn and ¥92.5bn in revenue and EBITDA respectively.
• The company revised its previous guidance in February and expects revenues and OP of ¥823bn and ¥89.2bn respectively for 4QFY03/2023.
• Our revenue forecast for 4QFY03/2023 is in line with Recruit’s guidance, while we expect the company’s adjusted EBITDA to be slightly higher than the guidance.

• AviChina Industry & Technology (2357 HK) remains cheap with 3-year earnings CAGR of 17.4% but only 11x PER. It also trades on 55% discount to value of its A-share subsidiaries.
• Aggregate earnings for its four A-share listed subsidiaries grew a solid 26.8% in 1Q23, even faster than AviChina Industry’s FY23F earnings growth of 21.5%. 
• China is expected to increase military spending to narrow the gap against the US going forward. AviChina stays best exposed to such growth in defense demand.

• General Dynamics had a strong quarter and managed an all-around beat with an improving order book position and a company-wide book-to-bill ratio of 0.9:1.
• The Combat Systems group saw particularly robust order activity with a book-to-bill ratio of 5x.
• While Aerospace & Technologies continues to deliver strong cash performance, the Combat Systems group, in particular, produced exceptional free cash flow this quarter.

• Waste Management is off to a good start in 2023, with first-quarter performance exceeding analyst expectations.
• Collection and disposal volume also increased by 0.8% in the first quarter.
• Waste Management believes it is poised for another year of robust financial growth in 2023.

• After a series of bad results, Boeing managed a mixed quarter to start the year as its revenues were above Wall Street expectations though company reported wider-than-expected losses.
• However, Boeing still expects to deliver 450 737 airplanes this year and plans to increase its rate to 38 per month later this year.
• The company also delivered 130 commercial airplanes in the quarter, steadily increasing rates across critical programs to meet robust demand.

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
• Ventia (VNT AU) has appeared as a “surprise” potential addition to the ASX 200 index in June 2023 after recent block sales by top shareholders.
• Including Ventia, we currently expect two ADDs and two DELs for the ASX 200 index in June 2023.

• Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
• The strength of its customer base business grew by 6% in this quarter.
• For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

• Equifax produced another all-around beat, growing non-mortgage revenue by 10% in constant currency as it met its Equifax 2025 strategic targets and the $200 million spending plan.
• Equifax’s non-mortgage businesses, which accounted for roughly 80% of overall revenue in the quarter, performed well.
• Workforce Solutions once again delivered an excellent quarter, with non-mortgage revenue growth up 11% and total revenue down 8%.

• 3M delivered an all-around beat in the latest result and managed costs aggressively in a challenging environment.
• The company experienced noteworthy end-market weakness in consumer electronics, shifting consumer spending patterns along with the mixed industrial end markets and retailer destocking.
• The electronic business of the company saw adjusted organic sales declines.

• For Raytheon, this was quite a good start to 2023 as it delivered an all-around beat in the first quarater.
• The demand remains strong for both its defense and commercial aerospace businesses which is a positive sign.
• Looking internationally, Raytheon views strong demand for defense capabilities as its allies prioritize additional defense spending.

• UPS had a terribly disappointing quarter and failed to meet the revenue expectations as well as the earnings expectations of analysts.
• U.S. discretionary sales have been lagging behind grocery as disposable income and consumable sales are shifting from goods to services.
• Lately, the company finished the acquisition of Bomi Group, and cost synergy and revenue are running ahead of the target.

• GE’s stock has been on a strong upward momentum and delivered an all-around beat in the quarter.
• The top-line momentum was strong, with strong market demand as well as execution driving growth.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Enphase Energy had a decent first quarter and managed an all-around beat with no significant supply shortages and a stable overall supply environment.
• The company also experienced significant growth in Europe, with revenue rising 25% sequentially and more than tripling year-on-year.
• In addition, the company launched its most potent Enphase Energy System, featuring the new IQ Battery 5P and IQ8 Microinverters.

• In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run up to the June 2023 Rebalance.
• Ventia (VNT AU) has appeared as a “surprise” potential addition to the ASX 200 index in June 2023 after recent block sales by top shareholders.
• Including Ventia, we currently expect two ADDs and two DELs for the ASX 200 index in June 2023.

• Danaher successfully navigated a dynamic operating environment in this quarter to deliver an all-around beat.
• The strength of its customer base business grew by 6% in this quarter.
• For the quarter, the gross profit margin was 61% and the operating margin was down due to lower COVID volume in its diagnostics and biotechnology businesses.

• Equifax produced another all-around beat, growing non-mortgage revenue by 10% in constant currency as it met its Equifax 2025 strategic targets and the $200 million spending plan.
• Equifax’s non-mortgage businesses, which accounted for roughly 80% of overall revenue in the quarter, performed well.
• Workforce Solutions once again delivered an excellent quarter, with non-mortgage revenue growth up 11% and total revenue down 8%.

• 3M delivered an all-around beat in the latest result and managed costs aggressively in a challenging environment.
• The company experienced noteworthy end-market weakness in consumer electronics, shifting consumer spending patterns along with the mixed industrial end markets and retailer destocking.
• The electronic business of the company saw adjusted organic sales declines.

• For Raytheon, this was quite a good start to 2023 as it delivered an all-around beat in the first quarater.
• The demand remains strong for both its defense and commercial aerospace businesses which is a positive sign.
• Looking internationally, Raytheon views strong demand for defense capabilities as its allies prioritize additional defense spending.

• UPS had a terribly disappointing quarter and failed to meet the revenue expectations as well as the earnings expectations of analysts.
• U.S. discretionary sales have been lagging behind grocery as disposable income and consumable sales are shifting from goods to services.
• Lately, the company finished the acquisition of Bomi Group, and cost synergy and revenue are running ahead of the target.

• GE’s stock has been on a strong upward momentum and delivered an all-around beat in the quarter.
• The top-line momentum was strong, with strong market demand as well as execution driving growth.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Enphase Energy had a decent first quarter and managed an all-around beat with no significant supply shortages and a stable overall supply environment.
• The company also experienced significant growth in Europe, with revenue rising 25% sequentially and more than tripling year-on-year.
• In addition, the company launched its most potent Enphase Energy System, featuring the new IQ Battery 5P and IQ8 Microinverters.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads 111 Inc (YI US), Estia Health (EHE AU), United Malt Group Ltd (UMG AU), Aag Energy Holdings (2686 HK),Origin Energy (ORG AU), Metro Pacific Investments Co (MPI PM).
• Lowest spreads  Liontown Resources (LTR AU), Healius (HLS AU), Penguin International (PBS SP), Lian Beng (LBG SP), Mincor Resources NL (MCR AU), Blackmores Ltd (BKL AU), Arcland Service (3085 JP).

• We look for the new MTP to present a growth outlook in the Aerospace division driven by a recovery in the civilian aircraft market
• IHI is a key beneficiary of structural growth themes of higher defense spending and energy transition
• We believe that the market has been overly concerned about a growth plateau. At 9x TEV / NTM EBIT, the stock is a bargain versus global peers

• China Energy Engineering (3996 HK) is a laggard in this round of “China style valuation” rally. With strong earnings and project backlog, there is good room to catch up.
• Its 1Q23 earnings growth is ahead of the infrastructure trio, and so as the new contracts signed. Moreover, it has a faster growth in overseas market. 
• The 3-year EPS CAGR is projected at 16.3%, yet it just trades on 5x PER. Its ROE of 9.4% makes it attractively priced at only 0.4x P/B for FY23.

• Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
• The company has provided to shareholders an executive summary from the Frost & Sullivan Feasibility Study for its titanium powder project in Abu Dhabi which concludes that the project is feasible across technical, financial and market parameters, and supports the Chairman’s prior guidance to shareholders.
• Amaero is progressing an 827-tonne a year titanium powder facility in the United Arab Emirates which it expects to greenlight before the end of this financial year.

• Maersk’s Q1 earnings were solid, despite plummeting container rates and volumes. Annualizing Q1 Net Income would give RoE of about 17%, which is a healthy level, in our view. 
• Q1 EBITDA of US$4 bn is equivalent to 36% to 50% of full-year guidance, which remains unchanged. Maersk indicated Q1 will likely be its most profitable quarter in 2023.
• Maersk’s result reinforces our view that container rates are bottoming. A related takeaway is that a slowing goods inflation rate could lose a tailwind it’s enjoyed since last October.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads 111 Inc (YI US), Estia Health (EHE AU), United Malt Group Ltd (UMG AU), Aag Energy Holdings (2686 HK),Origin Energy (ORG AU), Metro Pacific Investments Co (MPI PM).
• Lowest spreads  Liontown Resources (LTR AU), Healius (HLS AU), Penguin International (PBS SP), Lian Beng (LBG SP), Mincor Resources NL (MCR AU), Blackmores Ltd (BKL AU), Arcland Service (3085 JP).

• We look for the new MTP to present a growth outlook in the Aerospace division driven by a recovery in the civilian aircraft market
• IHI is a key beneficiary of structural growth themes of higher defense spending and energy transition
• We believe that the market has been overly concerned about a growth plateau. At 9x TEV / NTM EBIT, the stock is a bargain versus global peers

• China Energy Engineering (3996 HK) is a laggard in this round of “China style valuation” rally. With strong earnings and project backlog, there is good room to catch up.
• Its 1Q23 earnings growth is ahead of the infrastructure trio, and so as the new contracts signed. Moreover, it has a faster growth in overseas market. 
• The 3-year EPS CAGR is projected at 16.3%, yet it just trades on 5x PER. Its ROE of 9.4% makes it attractively priced at only 0.4x P/B for FY23.

• Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace, and other industrial sectors.
• The company has provided to shareholders an executive summary from the Frost & Sullivan Feasibility Study for its titanium powder project in Abu Dhabi which concludes that the project is feasible across technical, financial and market parameters, and supports the Chairman’s prior guidance to shareholders.
• Amaero is progressing an 827-tonne a year titanium powder facility in the United Arab Emirates which it expects to greenlight before the end of this financial year.

• Maersk’s Q1 earnings were solid, despite plummeting container rates and volumes. Annualizing Q1 Net Income would give RoE of about 17%, which is a healthy level, in our view. 
• Q1 EBITDA of US$4 bn is equivalent to 36% to 50% of full-year guidance, which remains unchanged. Maersk indicated Q1 will likely be its most profitable quarter in 2023.
• Maersk’s result reinforces our view that container rates are bottoming. A related takeaway is that a slowing goods inflation rate could lose a tailwind it’s enjoyed since last October.