Category

Industrials

Daily Brief Industrials: Hyundai Rotem Company, Dongfang Electric and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Contenders for MSCI Korea Inclusion in 2H 2023
  • Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed

Contenders for MSCI Korea Inclusion in 2H 2023

By Douglas Kim

  • We have provided a list of 10 stocks that could be included in the MSCI Korea index in 2H 2023.
  • Among these 10 companies, the top five companies with the highest free float based market cap have greater probabilities of becoming included in the index, in our view.
  • The five companies include Jyp Entertainment (035900 KS), Hyundai Rotem Company (064350 KS), DB Hitek Co., Ltd. (000990 KS), Cs Wind Corp (112610 KS), and LS Corp (006260 KS).

Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed

By Osbert Tang, CFA

  • The market should be happy with the 43.9% YoY growth in recurring earnings at Dongfang Electric (1072 HK) in 1Q23. Gross margin of 18.7% is the highest since 2Q21.
  • New orders surged 26.1% YoY and 92.4% QoQ to a record Rmb22.6bn in 1Q23. We estimate backlog equals to 1.42x FY23F consensus revenue, meaning a very secured pipeline.
  • While EPS dilution is a concern, this has already been reflected in share price. The acquisitions of subsidiaries will enhance FY23 earnings. Its 8x PER and 0.8x P/B are inexpensive.

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Daily Brief Industrials: Hyundai Rotem Company, Dongfang Electric and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Contenders for MSCI Korea Inclusion in 2H 2023
  • Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed

Contenders for MSCI Korea Inclusion in 2H 2023

By Douglas Kim

  • We have provided a list of 10 stocks that could be included in the MSCI Korea index in 2H 2023.
  • Among these 10 companies, the top five companies with the highest free float based market cap have greater probabilities of becoming included in the index, in our view.
  • The five companies include Jyp Entertainment (035900 KS), Hyundai Rotem Company (064350 KS), DB Hitek Co., Ltd. (000990 KS), Cs Wind Corp (112610 KS), and LS Corp (006260 KS).

Dongfang Electric (1072 HK): Profit Surged, Record New Orders Signed

By Osbert Tang, CFA

  • The market should be happy with the 43.9% YoY growth in recurring earnings at Dongfang Electric (1072 HK) in 1Q23. Gross margin of 18.7% is the highest since 2Q21.
  • New orders surged 26.1% YoY and 92.4% QoQ to a record Rmb22.6bn in 1Q23. We estimate backlog equals to 1.42x FY23F consensus revenue, meaning a very secured pipeline.
  • While EPS dilution is a concern, this has already been reflected in share price. The acquisitions of subsidiaries will enhance FY23 earnings. Its 8x PER and 0.8x P/B are inexpensive.

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Daily Brief Industrials: Voltas Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Voltas Ltd (VOLT IN) | Competition Casualty

Voltas Ltd (VOLT IN) | Competition Casualty

By Pranav Bhavsar

  • Voltas Ltd (VOLT IN) has experienced a decline in revenue due to a slowdown in demand, increased competition, and higher commodity prices. 
  • The Voltas Beko brand has been a ray of hope for the company, with strong growth in demand and market share.
  • While there may be an upside in volumes as capex kicks in,  but better to be on the sidelines until there is a change in the structure of the industry.

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Daily Brief Industrials: Voltas Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Voltas Ltd (VOLT IN) | Competition Casualty

Voltas Ltd (VOLT IN) | Competition Casualty

By Pranav Bhavsar

  • Voltas Ltd (VOLT IN) has experienced a decline in revenue due to a slowdown in demand, increased competition, and higher commodity prices. 
  • The Voltas Beko brand has been a ray of hope for the company, with strong growth in demand and market share.
  • While there may be an upside in volumes as capex kicks in,  but better to be on the sidelines until there is a change in the structure of the industry.

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The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

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Daily Brief Industrials: Hong Kong Hang Seng Index, Csx Corp, Emerson Electric Co, Idex Corp, Trex Company and more

By | Daily Briefs, Industrials

In today’s briefing:

  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?
  • CSX Corporation: Impressive Network Performance & Savings Drivers
  • Emerson Electric Co.: Collaboration with ZAETHER & Other Drivers
  • IDEX Corporation: Continued Robustness In Life Sciences and Analytical Instrumentation – Key Drivers
  • Trex Company Inc.: Railing and Decking In High Demand – Key Drivers

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

CSX Corporation: Impressive Network Performance & Savings Drivers

By Baptista Research

  • CSX Corporation achieved a successful first quarter, fueled by strong pricing and volume growth in its goods and coal businesses which resulted in an all-around beat.
  • While the company saw positive growth in automotive, customer production challenges hampered quarterly volumes.
  • Solid commodity prices are anticipated to support the global coal market in the near future, resulting in positive volume growth.

Emerson Electric Co.: Collaboration with ZAETHER & Other Drivers

By Baptista Research

  • With its results around the corner, let us take a closer look at Emersion Electric’s last quarter performance.
  • The company’s last result had been a major disappointment as it failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
  • The sales performance was driven by growth in software, control, and in Intelligent Devices.

IDEX Corporation: Continued Robustness In Life Sciences and Analytical Instrumentation – Key Drivers

By Baptista Research

  • IDEX experienced double-digit organic growth in the last quarter and achieved strong profitability and sales that were beyond market expectations.
  • IDEX is on its next phase of automation at Banjo and views continued improvement in efficiencies and delivery.
  • In its energy business, IDEX sees favorable demand for natural gas production, energy exports, and continued oil price support.

Trex Company Inc.: Railing and Decking In High Demand – Key Drivers

By Baptista Research

  • Trex Company has been witnessing a decent sequential recovery as it navigates the challenges of the pro-channel inventory recalibration.
  • The company had delivered an all-around beat in its last result as consumer demand for Trex railing and decking remained steady.
  • We give Trex Company a ‘Hold’ rating with a revised target price.

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Daily Brief Industrials: Hong Kong Hang Seng Index, Csx Corp, Emerson Electric Co, Idex Corp, Trex Company and more

By | Daily Briefs, Industrials

In today’s briefing:

  • EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?
  • CSX Corporation: Impressive Network Performance & Savings Drivers
  • Emerson Electric Co.: Collaboration with ZAETHER & Other Drivers
  • IDEX Corporation: Continued Robustness In Life Sciences and Analytical Instrumentation – Key Drivers
  • Trex Company Inc.: Railing and Decking In High Demand – Key Drivers

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Sell in May and Go Away?

By Simon Harris

  • Weekly summary of vol changes and moves across Global Markets
  • Analysing ATM volatility and skew changes over the last 5 days
  • We suggest a few trades to take advantage of the implied vol surfaces

CSX Corporation: Impressive Network Performance & Savings Drivers

By Baptista Research

  • CSX Corporation achieved a successful first quarter, fueled by strong pricing and volume growth in its goods and coal businesses which resulted in an all-around beat.
  • While the company saw positive growth in automotive, customer production challenges hampered quarterly volumes.
  • Solid commodity prices are anticipated to support the global coal market in the near future, resulting in positive volume growth.

Emerson Electric Co.: Collaboration with ZAETHER & Other Drivers

By Baptista Research

  • With its results around the corner, let us take a closer look at Emersion Electric’s last quarter performance.
  • The company’s last result had been a major disappointment as it failed to meet the revenue expectations as well as the earnings expectations of Wall Street.
  • The sales performance was driven by growth in software, control, and in Intelligent Devices.

IDEX Corporation: Continued Robustness In Life Sciences and Analytical Instrumentation – Key Drivers

By Baptista Research

  • IDEX experienced double-digit organic growth in the last quarter and achieved strong profitability and sales that were beyond market expectations.
  • IDEX is on its next phase of automation at Banjo and views continued improvement in efficiencies and delivery.
  • In its energy business, IDEX sees favorable demand for natural gas production, energy exports, and continued oil price support.

Trex Company Inc.: Railing and Decking In High Demand – Key Drivers

By Baptista Research

  • Trex Company has been witnessing a decent sequential recovery as it navigates the challenges of the pro-channel inventory recalibration.
  • The company had delivered an all-around beat in its last result as consumer demand for Trex railing and decking remained steady.
  • We give Trex Company a ‘Hold’ rating with a revised target price.

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Daily Brief Industrials: Srg Takamiya, Carlisle Cos, Carrier Global Corp, Howmet Aerospace and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Takamiya (2445 JP) Initiation Report
  • Carlisle (CSL-US) 1Q23 Update
  • Carrier Global Corporation: Benefitting From Improvements In Supply Chain & Pricing – Key Drivers
  • Howmet Aerospace Inc.: Continued Strength In Commercial Aerospace – Key Drivers

Takamiya (2445 JP) Initiation Report

By Sessa Investment Research

  • Accelerating de facto standardization of the Iq System
  • Guiding for double-digit growth in sales and profit in FY23/3
  • Roadmap for sustainable growth. Takamiya is currently implementing its medium-term management plan ending in FY2024/3.

Carlisle (CSL-US) 1Q23 Update

By Guasty Winds

  • Carlisle’s earnings came in a little soft in the quarter, driven mostly by a greater magnitude of de-stock than first anticipated and some weather-related delays.
  • In addition, the company lowered guidance for the year for CCM with a hit to both margins and volumes.
  • I was already below guidance on margins for this year but I was too high on sales, and the deleverage has caused margins to come in <30% for 2023.

Carrier Global Corporation: Benefitting From Improvements In Supply Chain & Pricing – Key Drivers

By Baptista Research

  • Carrier Global’s results for the last quarter were an all-around beat and its cash flows, earnings, and sales were in line with the expectations of the management.
  • It delivered organic sales growth supported by double-digit growth in commercial HVAC and light commercial, trailer and global truck, and after-market.
  • Carrier made progress in its innovative Lynx platform and has launched various new capabilities this quarter.

Howmet Aerospace Inc.: Continued Strength In Commercial Aerospace – Key Drivers

By Baptista Research

  • With its earnings just around the corner, it is interesting to look at how Howmet Aerospace has been performing in recent times.
  • The company exited the last quarter with a strong acceleration in revenue despite the choppy backlog.
  • Commercial transportation, which impacts fastening systems and forged wheels, was up in the quarter, driven by higher volumes and higher aluminum prices.

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  • ✓ Events & Webinars

Daily Brief Industrials: Srg Takamiya, Carlisle Cos, Carrier Global Corp, Howmet Aerospace and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Takamiya (2445 JP) Initiation Report
  • Carlisle (CSL-US) 1Q23 Update
  • Carrier Global Corporation: Benefitting From Improvements In Supply Chain & Pricing – Key Drivers
  • Howmet Aerospace Inc.: Continued Strength In Commercial Aerospace – Key Drivers

Takamiya (2445 JP) Initiation Report

By Sessa Investment Research

  • Accelerating de facto standardization of the Iq System
  • Guiding for double-digit growth in sales and profit in FY23/3
  • Roadmap for sustainable growth. Takamiya is currently implementing its medium-term management plan ending in FY2024/3.

Carlisle (CSL-US) 1Q23 Update

By Guasty Winds

  • Carlisle’s earnings came in a little soft in the quarter, driven mostly by a greater magnitude of de-stock than first anticipated and some weather-related delays.
  • In addition, the company lowered guidance for the year for CCM with a hit to both margins and volumes.
  • I was already below guidance on margins for this year but I was too high on sales, and the deleverage has caused margins to come in <30% for 2023.

Carrier Global Corporation: Benefitting From Improvements In Supply Chain & Pricing – Key Drivers

By Baptista Research

  • Carrier Global’s results for the last quarter were an all-around beat and its cash flows, earnings, and sales were in line with the expectations of the management.
  • It delivered organic sales growth supported by double-digit growth in commercial HVAC and light commercial, trailer and global truck, and after-market.
  • Carrier made progress in its innovative Lynx platform and has launched various new capabilities this quarter.

Howmet Aerospace Inc.: Continued Strength In Commercial Aerospace – Key Drivers

By Baptista Research

  • With its earnings just around the corner, it is interesting to look at how Howmet Aerospace has been performing in recent times.
  • The company exited the last quarter with a strong acceleration in revenue despite the choppy backlog.
  • Commercial transportation, which impacts fastening systems and forged wheels, was up in the quarter, driven by higher volumes and higher aluminum prices.

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  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars

Daily Brief Industrials: Yunsung F&C, Shandong Zhongji Electrical Eqpnt, Nidec Corp, AKR Corporindo, Air China Ltd (H), Selex Motor, Millennium Services Group Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion
  • ChiNext/​​ChiNext50 Index Rebalance Preview: Outperformance Maintained
  • Nidec (6594 JP): Buy into Current Weakness
  • AKR Corporindo (AKRA IJ) – A Winning Formula
  • Air China (753 HK): Demonstrating Obvious Strengths
  • ADB Ventures, Touchstone Join US$3M Round of Vietnamese EV Maker Selex Motors
  • Millennium Services Group Ltd – Contract Wins Now Evident in the Numbers

One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion

By Sanghyun Park

  • Due to the matched order fraud incident in recent days, there has been a significant change in the KOSDAQ top 50 rankings, presenting a great opportunity for Yunsung F&C.
  • The estimated size of the passive inflow that it is likely to receive is approximately 0.5-0.8x ADTV for ETFs alone, and 1.2-1.5x when expanded to all passive funds.
  • We should note that the level of market exposure to inclusion possibility has been significantly low. Therefore, we can expect a significant price impact at the time of the announcement.

ChiNext/​​ChiNext50 Index Rebalance Preview: Outperformance Maintained

By Brian Freitas

  • With 1 trading day left in the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
  • Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
  • The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the last month. We’d be inclined to trim positions.

Nidec (6594 JP): Buy into Current Weakness

By Scott Foster

  • FY Mar-23 results fell short of expectations and management is guiding for a weak 1H in the new fiscal year. This looks like a buying opportunity.
  • The E-Axle business should reach break-even this year. Rising EV demand in China, Europe and elsewhere, plus general electrification, should take the overall Automotive operating margin to 10%.
  • Projected valuations are attractive even if sales do not reach management’s ambitious target.

AKR Corporindo (AKRA IJ) – A Winning Formula

By Angus Mackintosh

  • AKR Corporindo1Q2023 results demonstrated its resilience with its petroleum and chemicals division continuing to grow in 1Q2023 with the added kicker of a large land sale at JIIPE. 
  • The company’s JIIPE Industrial Estate will become an increasingly important earnings contributor but chemical distribution will be driven by smelters and fuel by the BP retail JV at the margin,
  • AKR Corporindo is an increasingly interesting proxy for the next stage of Indonesia’s economic growth through its exposure to smelters through its chemicals business and the overall economy through fuel. 

Air China (753 HK): Demonstrating Obvious Strengths

By Osbert Tang, CFA

  • Air China Ltd (H) (753 HK)‘s 1Q23 result demonstrated a significant YoY and QoQ reduction in losses. At Rmb2.9bn, this is the smallest losses in last six quarters.  
  • We witnessed a solid spike in overall yield and sharp margin recovery in the quarter. There is also encouraging performance in operating cash flow which turned around YoY to positive.
  • Its associate Cathay Pacific Airways (293 HK) has seen Mar capacity returned to 50% of pre-pandemic level with over 90% load. More resumption of international flights will drive 2H23.

ADB Ventures, Touchstone Join US$3M Round of Vietnamese EV Maker Selex Motors

By e27

  • Selex Motors produces electric two-wheelers and swappable battery packs that are purpose-built for last-mile cargo delivery

  • The company aims to utilise the funds to expand its two-wheeler production lines and set up battery-swapping systems in key cities in Vietnam, aiming to become the nation’s largest battery-swapping network provider
  • Established in 2018, Selex produces electric two-wheelers and swappable battery packs that are purpose-built for large applications, including last-mile cargo delivery

Millennium Services Group Ltd – Contract Wins Now Evident in the Numbers

By Research as a Service (RaaS)

  • Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.
  • MIL achieved the first positive quarterly revenue growth since Q1 FY22 at +3.5%, while contract revenue growth was ~+12.6% on the pcp (excludes ad-hoc revenue).
  • The COVID-related ad-hoc revenue has now all but cycled out of the quarterly numbers while new contract wins cycle in. 

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Daily Brief Industrials: Yunsung F&C, Shandong Zhongji Electrical Eqpnt, Nidec Corp, AKR Corporindo, Air China Ltd (H), Selex Motor, Millennium Services Group Ltd and more

By | Daily Briefs, Industrials

In today’s briefing:

  • One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion
  • ChiNext/​​ChiNext50 Index Rebalance Preview: Outperformance Maintained
  • Nidec (6594 JP): Buy into Current Weakness
  • AKR Corporindo (AKRA IJ) – A Winning Formula
  • Air China (753 HK): Demonstrating Obvious Strengths
  • ADB Ventures, Touchstone Join US$3M Round of Vietnamese EV Maker Selex Motors
  • Millennium Services Group Ltd – Contract Wins Now Evident in the Numbers

One Unnoticed Addition to KOSDAQ 150: Yunsung F&C Through Special Inclusion

By Sanghyun Park

  • Due to the matched order fraud incident in recent days, there has been a significant change in the KOSDAQ top 50 rankings, presenting a great opportunity for Yunsung F&C.
  • The estimated size of the passive inflow that it is likely to receive is approximately 0.5-0.8x ADTV for ETFs alone, and 1.2-1.5x when expanded to all passive funds.
  • We should note that the level of market exposure to inclusion possibility has been significantly low. Therefore, we can expect a significant price impact at the time of the announcement.

ChiNext/​​ChiNext50 Index Rebalance Preview: Outperformance Maintained

By Brian Freitas

  • With 1 trading day left in the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
  • Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
  • The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the last month. We’d be inclined to trim positions.

Nidec (6594 JP): Buy into Current Weakness

By Scott Foster

  • FY Mar-23 results fell short of expectations and management is guiding for a weak 1H in the new fiscal year. This looks like a buying opportunity.
  • The E-Axle business should reach break-even this year. Rising EV demand in China, Europe and elsewhere, plus general electrification, should take the overall Automotive operating margin to 10%.
  • Projected valuations are attractive even if sales do not reach management’s ambitious target.

AKR Corporindo (AKRA IJ) – A Winning Formula

By Angus Mackintosh

  • AKR Corporindo1Q2023 results demonstrated its resilience with its petroleum and chemicals division continuing to grow in 1Q2023 with the added kicker of a large land sale at JIIPE. 
  • The company’s JIIPE Industrial Estate will become an increasingly important earnings contributor but chemical distribution will be driven by smelters and fuel by the BP retail JV at the margin,
  • AKR Corporindo is an increasingly interesting proxy for the next stage of Indonesia’s economic growth through its exposure to smelters through its chemicals business and the overall economy through fuel. 

Air China (753 HK): Demonstrating Obvious Strengths

By Osbert Tang, CFA

  • Air China Ltd (H) (753 HK)‘s 1Q23 result demonstrated a significant YoY and QoQ reduction in losses. At Rmb2.9bn, this is the smallest losses in last six quarters.  
  • We witnessed a solid spike in overall yield and sharp margin recovery in the quarter. There is also encouraging performance in operating cash flow which turned around YoY to positive.
  • Its associate Cathay Pacific Airways (293 HK) has seen Mar capacity returned to 50% of pre-pandemic level with over 90% load. More resumption of international flights will drive 2H23.

ADB Ventures, Touchstone Join US$3M Round of Vietnamese EV Maker Selex Motors

By e27

  • Selex Motors produces electric two-wheelers and swappable battery packs that are purpose-built for last-mile cargo delivery

  • The company aims to utilise the funds to expand its two-wheeler production lines and set up battery-swapping systems in key cities in Vietnam, aiming to become the nation’s largest battery-swapping network provider
  • Established in 2018, Selex produces electric two-wheelers and swappable battery packs that are purpose-built for large applications, including last-mile cargo delivery

Millennium Services Group Ltd – Contract Wins Now Evident in the Numbers

By Research as a Service (RaaS)

  • Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.
  • MIL achieved the first positive quarterly revenue growth since Q1 FY22 at +3.5%, while contract revenue growth was ~+12.6% on the pcp (excludes ad-hoc revenue).
  • The COVID-related ad-hoc revenue has now all but cycled out of the quarterly numbers while new contract wins cycle in. 

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars