Category

Industrials

Apr 22
0

Daily Brief Industrials: Toshiba Corp, Recruit Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toshiba – HDD Business Risk
  • Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

Toshiba – HDD Business Risk

By Mio Kato

  • We have been tracking Toshiba’s rapidly deteriorating HDD business over the last few quarters. 
  • Recent trends raise further concerns about the long-term viability of the business. 
  • In particular, visibility remains low on a strong recovery in demand and until that occurs the possibility of a YoY deterioration remains high.

Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

By Shifara Samsudeen, ACMA, CGMA

  • US job openings in February fell to 9.9m, lowest since May 2021 and 0.5m below market expectations. The job openings are forecast to drop further in March 2023.
  • Recruit Holdings (6098 JP) ‘s 3QFY03/2023 profits declined significantly with labour markets returning to normalcy and we expect further drop in margins going forward.
  • HR Tech drives most of Recruit’s profits and we expect the company’s earnings to decline going forward with weakening of labour markets globally.

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Apr 22
0

Daily Brief Industrials: Toshiba Corp, Recruit Holdings and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Toshiba – HDD Business Risk
  • Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

Toshiba – HDD Business Risk

By Mio Kato

  • We have been tracking Toshiba’s rapidly deteriorating HDD business over the last few quarters. 
  • Recent trends raise further concerns about the long-term viability of the business. 
  • In particular, visibility remains low on a strong recovery in demand and until that occurs the possibility of a YoY deterioration remains high.

Recruit: Further Drop in US Job Openings Adds Strain on HRTech Earnings

By Shifara Samsudeen, ACMA, CGMA

  • US job openings in February fell to 9.9m, lowest since May 2021 and 0.5m below market expectations. The job openings are forecast to drop further in March 2023.
  • Recruit Holdings (6098 JP) ‘s 3QFY03/2023 profits declined significantly with labour markets returning to normalcy and we expect further drop in margins going forward.
  • HR Tech drives most of Recruit’s profits and we expect the company’s earnings to decline going forward with weakening of labour markets globally.

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Apr 21
0

Daily Brief Industrials: Nidec Corp, iMotion Automotive Technology, MillerKnoll and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Nidec (6594) | FY3/24 Guidance Risk
  • IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box
  • Setting the Record Straight: Tweet Twists Truth About CEO Compensation

Nidec (6594) | FY3/24 Guidance Risk

By Mark Chadwick

  • We do not expect any major surprises when Nidec reports FY3/23 earnings on 24 April
  • However, we believe that there is a significant risk that the company will guide below analyst consensus for FY3/24
  • We are bearish going into results. After that, there could be an opportunity to turn bullish again on FY3/25 PE of 14x

IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box

By Ethan Aw

  • IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO. 
  • 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. 
  • In this note, we talk about the not-so-positive aspects of the deal.

Setting the Record Straight: Tweet Twists Truth About CEO Compensation

By Water Tower Research

  • As sensitive as this may be, we feel an obligation to correct misinformation on social media and put some context on a related news report about an internal MillerKnoll video town hall that leaked.
  • MLKN was down ~2.5% on Tuesday, more than its peers and competitors. Misinformation may have contributed to the stock action.
  • First, the misinformation: A tweet Tuesday shows CEO Andrea “Andi” Owen rallying employees.

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Apr 21
0

Daily Brief Industrials: Nidec Corp, iMotion Automotive Technology, MillerKnoll and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Nidec (6594) | FY3/24 Guidance Risk
  • IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box
  • Setting the Record Straight: Tweet Twists Truth About CEO Compensation

Nidec (6594) | FY3/24 Guidance Risk

By Mark Chadwick

  • We do not expect any major surprises when Nidec reports FY3/23 earnings on 24 April
  • However, we believe that there is a significant risk that the company will guide below analyst consensus for FY3/24
  • We are bearish going into results. After that, there could be an opportunity to turn bullish again on FY3/25 PE of 14x

IMotion Automotive Technology Pre-IPO – The Negatives – But Profitability Still a Black Box

By Ethan Aw

  • IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO. 
  • 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. 
  • In this note, we talk about the not-so-positive aspects of the deal.

Setting the Record Straight: Tweet Twists Truth About CEO Compensation

By Water Tower Research

  • As sensitive as this may be, we feel an obligation to correct misinformation on social media and put some context on a related news report about an internal MillerKnoll video town hall that leaked.
  • MLKN was down ~2.5% on Tuesday, more than its peers and competitors. Misinformation may have contributed to the stock action.
  • First, the misinformation: A tweet Tuesday shows CEO Andrea “Andi” Owen rallying employees.

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Apr 20
0

Daily Brief Industrials: Hanwha Aerospace, iMotion Automotive Technology, Jatri and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies
  • IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names
  • SBK Tech Ventures Leads Bangladeshi Transport Startup’s Series A

Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies

By Douglas Kim

  • The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.
  • The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.
  • We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).

IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names

By Ethan Aw

  • IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO. 
  • 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. 
  • In this note, we talk about the positive aspects of the deal.

SBK Tech Ventures Leads Bangladeshi Transport Startup’s Series A

By Tech in Asia

  • Bangladesh’s mass transit system relies heavily on buses, but commuters often face challenges such as overcrowded vehicles, inconsistent fares, and premium charges. 
  • Jatri seeks to address these issues by digitalizing and modernizing the country’s public transportation industry.
  • With the help of technology, the company provides bus operators and owners with a single dashboard that syncs with all vehicles in the network. It also digitalizes information, streamlines processes, and improves resource allocation.

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Apr 20
0

Daily Brief Industrials: Hanwha Aerospace, iMotion Automotive Technology, Jatri and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies
  • IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names
  • SBK Tech Ventures Leads Bangladeshi Transport Startup’s Series A

Launch of Starlink Service by SpaceX – Impact on 11 Korean Companies

By Douglas Kim

  • The Starlink service is expected to be launched in Korea in 2Q/3Q 2023. Starlink gained more than 1 million active subscribers globally as of December 2022.
  • The launch of the Starlink service in Korea is likely to have a positive impact on  companies such as Hanwha Aerospace, Solu-M, Intellian Technologies, and Satrec Initiative.
  • We like a pair trade involving long (basket of 8 stocks above that are positively impacted by Starlink launch in Korea) and short (three major Korean telcos).

IMotion Automotive Technology Pre-IPO – The Positives – Strong Growth Ahead with Some Big Names

By Ethan Aw

  • IMotion Automotive Technology (1812706D CH) is looking to raise about US$300m in its upcoming HK IPO. 
  • 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. 
  • In this note, we talk about the positive aspects of the deal.

SBK Tech Ventures Leads Bangladeshi Transport Startup’s Series A

By Tech in Asia

  • Bangladesh’s mass transit system relies heavily on buses, but commuters often face challenges such as overcrowded vehicles, inconsistent fares, and premium charges. 
  • Jatri seeks to address these issues by digitalizing and modernizing the country’s public transportation industry.
  • With the help of technology, the company provides bus operators and owners with a single dashboard that syncs with all vehicles in the network. It also digitalizes information, streamlines processes, and improves resource allocation.

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Apr 19
0

Daily Brief Industrials: Keppel Infrastructure Trust, Toyo Construction, Collplant Biotechnologies and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Keppel Infrastructure Trust Placement – Very Well Flagged, Should Expect Some Short Covering
  • YFO Goes Hard for Board Spill – Independents AND Executives
  • 10 in 10 with H2G Green – The Pivot to Green Hydrogen

Keppel Infrastructure Trust Placement – Very Well Flagged, Should Expect Some Short Covering

By Clarence Chu

  • Keppel Infrastructure Trust (KIT SP) is looking to raise S$125m (US$96m) in its primary placement.
  • The proceeds in the deal will be used to partially pay down its bridge loan, the latter used in a series of acquisitions made by the REIT in 2022.
  • Including the preferential offering, the deal would be a large one to digest at 9.4% of the REIT’s current mcap and 89.3 days of three month ADV. 

YFO Goes Hard for Board Spill – Independents AND Executives

By Travis Lundy

  • At end-March, Toyo Construction (1890 JP) started playing hardball against YFO. They rejected the EGM call; they sent a letter to METI crying “FEFTA Breach!”, and raised the div BIGLY.
  • The new div at ¥63/share was meant to get the share price over ¥1,000/share so the YFO bid at that price would not be meaningful. So far, no luck. 
  • But YFO, which had threatened to propose a new slate, came out today with a list of nine, including two who would be executive directors. 👀👀

10 in 10 with H2G Green – The Pivot to Green Hydrogen

By Geoff Howie

10 in 10 with H2G Green – The Pivot to Green Hydrogen

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Apr 19
0

Daily Brief Industrials: Keppel Infrastructure Trust, Toyo Construction, Collplant Biotechnologies and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Keppel Infrastructure Trust Placement – Very Well Flagged, Should Expect Some Short Covering
  • YFO Goes Hard for Board Spill – Independents AND Executives
  • 10 in 10 with H2G Green – The Pivot to Green Hydrogen

Keppel Infrastructure Trust Placement – Very Well Flagged, Should Expect Some Short Covering

By Clarence Chu

  • Keppel Infrastructure Trust (KIT SP) is looking to raise S$125m (US$96m) in its primary placement.
  • The proceeds in the deal will be used to partially pay down its bridge loan, the latter used in a series of acquisitions made by the REIT in 2022.
  • Including the preferential offering, the deal would be a large one to digest at 9.4% of the REIT’s current mcap and 89.3 days of three month ADV. 

YFO Goes Hard for Board Spill – Independents AND Executives

By Travis Lundy

  • At end-March, Toyo Construction (1890 JP) started playing hardball against YFO. They rejected the EGM call; they sent a letter to METI crying “FEFTA Breach!”, and raised the div BIGLY.
  • The new div at ¥63/share was meant to get the share price over ¥1,000/share so the YFO bid at that price would not be meaningful. So far, no luck. 
  • But YFO, which had threatened to propose a new slate, came out today with a list of nine, including two who would be executive directors. 👀👀

10 in 10 with H2G Green – The Pivot to Green Hydrogen

By Geoff Howie

10 in 10 with H2G Green – The Pivot to Green Hydrogen

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Apr 18
0

Daily Brief Industrials: Capita PLC, Qantm Intellectual Property, Otis Worldwide Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity Leaderboard for UK F100/​​250 June 23: 20+ Days to Buy for Top-Ranked F250 Potential ADDs
  • QANTM Intellectual Property (ASX:QIP) – Registering Potential Operating Leverage
  • QANTM Intellectual Property Ltd – Registering Potential Operating Leverage
  • Otis Worldwide: Equipment Growth & Acceleration Of Service Portfolio – Key Drivers

Quiddity Leaderboard for UK F100/​​250 June 23: 20+ Days to Buy for Top-Ranked F250 Potential ADDs

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the June 2023 Rebalance.
  • Based on latest prices, there could be one change for F100 and four changes in F250 between now and the June 2023 Rebalance including Mediclinic International (MDC LN)‘s intra-review change. 
  • Many of the high-ranked F250 potential additions could have very high impact according to our estimates.

QANTM Intellectual Property (ASX:QIP) – Registering Potential Operating Leverage

By Research as a Service (RaaS)

  • Initiation of Coverage with a DCF valuation of $1.57/share. QIP is trading at a 60% discount to its nearest peer, IPH (ASX:IPH)
  • Key areas of focus  are completing its business transformation programme and expanding geographically.
  • Success will lead to EBITDA margin expansion, greater exposure to Asia, and a growing exposure to automated and IP technology.

QANTM Intellectual Property Ltd – Registering Potential Operating Leverage

By Research as a Service (RaaS)

  • QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys and Sortify.tm.
  • It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with 16.5% market share (H1 FY23) in its key patents segment (68% of revenue) and a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
  • QIP produces ~$97m service revenue (3.7% five-year CAGR) primarily via various workstreams underlying the patent and trade marks lifecycles, and has a history of profitability and cash flow generation which facilitates high dividend pay-outs. 

Otis Worldwide: Equipment Growth & Acceleration Of Service Portfolio – Key Drivers

By Baptista Research

  • Otis entered the year with good momentum and delivered an all-around beat with improved organic growth in its last result as it continues to execute its four strategic pillars – advancing digitization, accelerating service portfolio growth, and sustaining new equipment growth while focusing on and empowering the organization.
  • Strong service performance, particularly on price and volume, was partially offset by commodities in new equipment, mixed headwinds, and higher corporate costs.
  • The pricing on new equipment orders in the quarter rose, led by the Americas, with a solid performance in APAC and EMEA.

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Apr 18
0

Daily Brief Industrials: Capita PLC, Qantm Intellectual Property, Otis Worldwide Corp and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity Leaderboard for UK F100/​​250 June 23: 20+ Days to Buy for Top-Ranked F250 Potential ADDs
  • QANTM Intellectual Property (ASX:QIP) – Registering Potential Operating Leverage
  • QANTM Intellectual Property Ltd – Registering Potential Operating Leverage
  • Otis Worldwide: Equipment Growth & Acceleration Of Service Portfolio – Key Drivers

Quiddity Leaderboard for UK F100/​​250 June 23: 20+ Days to Buy for Top-Ranked F250 Potential ADDs

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for F100 and F250 in the run up to the June 2023 Rebalance.
  • Based on latest prices, there could be one change for F100 and four changes in F250 between now and the June 2023 Rebalance including Mediclinic International (MDC LN)‘s intra-review change. 
  • Many of the high-ranked F250 potential additions could have very high impact according to our estimates.

QANTM Intellectual Property (ASX:QIP) – Registering Potential Operating Leverage

By Research as a Service (RaaS)

  • Initiation of Coverage with a DCF valuation of $1.57/share. QIP is trading at a 60% discount to its nearest peer, IPH (ASX:IPH)
  • Key areas of focus  are completing its business transformation programme and expanding geographically.
  • Success will lead to EBITDA margin expansion, greater exposure to Asia, and a growing exposure to automated and IP technology.

QANTM Intellectual Property Ltd – Registering Potential Operating Leverage

By Research as a Service (RaaS)

  • QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys and Sortify.tm.
  • It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market with 16.5% market share (H1 FY23) in its key patents segment (68% of revenue) and a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
  • QIP produces ~$97m service revenue (3.7% five-year CAGR) primarily via various workstreams underlying the patent and trade marks lifecycles, and has a history of profitability and cash flow generation which facilitates high dividend pay-outs. 

Otis Worldwide: Equipment Growth & Acceleration Of Service Portfolio – Key Drivers

By Baptista Research

  • Otis entered the year with good momentum and delivered an all-around beat with improved organic growth in its last result as it continues to execute its four strategic pillars – advancing digitization, accelerating service portfolio growth, and sustaining new equipment growth while focusing on and empowering the organization.
  • Strong service performance, particularly on price and volume, was partially offset by commodities in new equipment, mixed headwinds, and higher corporate costs.
  • The pricing on new equipment orders in the quarter rose, led by the Americas, with a solid performance in APAC and EMEA.

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