Category

Daily Briefs

Aug 06
0

Daily Brief Australia: Iron Ore and more

By | Australia, Daily Briefs

In today’s briefing:

  • [Iron Options Weekly 2024/31] Small Price Recovery in Iron Ore Following China Stimulus Measures

[Iron Options Weekly 2024/31] Small Price Recovery in Iron Ore Following China Stimulus Measures

By Pranay Yadav

  • Iron ore prices rose 1.8% last week, maintaining levels above $100/MT due to positive sentiment from potential Chinese stimulus measures.
  • The volume put/call ratio for FEF options last week increased to 1.23, reflecting renewed put activity despite positive price action.
  • Implied volatility (IV) remained largely flat last week. Despite continued interest in put options, IV skew declined suggesting puts became relatively cheaper.

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Aug 06
0

Daily Brief Singapore: MoneyHero , CapitaLand Ascendas REIT, Yangzijiang Shipbuilding and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Smartkarma Corporate Webinar | MoneyHero Group: Driving Expansion and Innovation in Southeast Asia
  • Short Note: Singapore Real Estate – Position for a Re-Rating on Fed Rate Cut Cycle
  • Mapletree Logistics Trust chairman increases interest at S$1.31 per unit

Smartkarma Corporate Webinar | MoneyHero Group: Driving Expansion and Innovation in Southeast Asia

By Smartkarma Research

For our next Corporate Webinar, we are glad to welcome MoneyHero Group’s CEO and Director, Mr Rohith Murthy and CFO, Mr Hao Qian.

In the upcoming webinar, Rohit and Hao will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Ishan Majumdar. The Corporate Webinar will include a live Q&A session.

This Corporate Webinar will be hosted on Tuesday, 13 August 2024, 15:00 SGT. 

About MoneyHero Group

MoneyHero Group connects people to a better financial future. The mission at MoneyHero Group is to make all of life’s financial decisions a time saving and rewarding experience. MoneyHero Group educates consumers about personal finance, helps them decide which products are best suited for their needs, and facilitates getting the product. They connect financial institutions with their target customers and help them achieve their customer acquisition objectives.

Short Note: Singapore Real Estate – Position for a Re-Rating on Fed Rate Cut Cycle

By Jacob Cheng

  • US-10 year treasury yield and Singapore 10-year bond yield are closely correlated
  • Singapore real estate stocks’ trading performance are therefore related to expectation of a US rate cut
  • We expect SG RE stocks will show stable industry fundamentals in upcoming results.  We like our trade idea to Long CLAR SP and SHORT Keppel REIT among S-REITs

Mapletree Logistics Trust chairman increases interest at S$1.31 per unit

By Geoff Howie

  • Institutions were net sellers of Singapore stocks over the five trading sessions to Aug 1, with S$115 million of net institutional outflow, following the similar pace of S$95 million of net outflow for the preceding five sessions to Jul 26.
  • The five sessions to Aug 1 also saw 11 primary-listed companies conduct buybacks with a total consideration of S$6.4 million.
  • For context, in FY2023 and FY2022, the net profit attributable to shareholders came to S$8.3 million and $13.4 million, respectively.

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Aug 06
0

Daily Brief South Korea: Youlchon Chemical and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Potential Additions and Deletions to KOSPI 200 in December 2024 Amid Market Downturn

Potential Additions and Deletions to KOSPI 200 in December 2024 Amid Market Downturn

By Douglas Kim

  • We discuss the potential additions and deletions to KOSPI 200 in December 2024 amid big declines in share prices of many stocks in KOSPI in the past week.
  • The eight potential additions are up on average 8.5% from end of 2023. The eight potential deletion candidates are down on average 39.1% YTD.
  • The average market cap of the seven potential additions is 1.9 trillion won. The average market cap of the seven potential deletion candidates is 0.6 trillion won.

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Aug 06
0

Daily Brief Indonesia: Multi Bintang Indonesia, New World Development and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Multi Bintang Indonesia (MLBI IJ): Q2 2024 Mediocre, But Dividend Yield At 8% for 70% ROCE Company
  • Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development

Multi Bintang Indonesia (MLBI IJ): Q2 2024 Mediocre, But Dividend Yield At 8% for 70% ROCE Company

By Sameer Taneja

  • Multi Bintang Indonesia (MLBI IJ) reported Q2 2024 revenues/profits of -4.4%/-5.4% YoY. Q2 FY24 was a significant improvement over Q1 FY24, when revenues were down 10.7% YoY.
  • The company is controlling costs by keeping SG&A down by 100 bps to maintain EBITDA margins over 50%. Net cash is now at 8% of the market capitalization.
  • We believe that the company will be able to pay 500/Rph of dividends in FY24, implying an 8.3% dividend yield. Trading at 12x PE, we find this idea compelling.

Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Aug 06
0

Daily Brief United States: NVIDIA Corp, Copper, Flex, S&P 500 INDEX, Crude Oil, Royal Caribbean Cruises, Quest Diagnostics, Bitcoin Pro, Kellogg Co, 3M Co and more

By | Daily Briefs, United States

In today’s briefing:

  • Technology Select Sector Index (XLK US): Reversing the Huge Flows from June
  • Getting the Grid Connection Back
  • Flex Ltd.: A Story Of Automotive Electrification and Content Expansion! – Major Drivers
  • EQD | The S&P500 WEEKLY Smashed The Tails Barrier, Reversal Due Soon
  • Drop in Gas Rigs Drives US Rig Count Downward
  • Royal Caribbean Group: Expansion into New Markets and Destinations & Key Factors Driving Our ‘Buy’ Rating! – Financial Forecasts
  • Quest Diagnostics: Will The Acquisition of Canadian Lab Provider LifeLabs Be A Game Changer? – Major Drivers
  • The Printer is Coming
  • Kellanova on Mars’ Radar: What Makes This Snack Leader a Prime Target?
  • 3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers

Technology Select Sector Index (XLK US): Reversing the Huge Flows from June

By Brian Freitas

Getting the Grid Connection Back

By BMO Equity Research Metal Matters

  • China’s state grid is increasing spending by 13% this year, which could boost sentiment in the copper sector
  • Chinese steel rebar standards are changing, leading to concerns about obsolete inventories and potential pressure on steel prices
  • India’s rising demand for metals, particularly in steel production, could have a significant impact on the global market by 2030

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Flex Ltd.: A Story Of Automotive Electrification and Content Expansion! – Major Drivers

By Baptista Research

  • Flex Ltd. reported solid financial results, reflecting a combination of strategic positioning and operational resilience.
  • The company delivered $6.3 billion in revenue for the quarter, slightly exceeding expectations, while achieving an adjusted operating margin of 4.8%.
  • This translated into an adjusted earnings per share (EPS) of $0.51, which is a 9% increase year-over-year.

EQD | The S&P500 WEEKLY Smashed The Tails Barrier, Reversal Due Soon

By Nico Rosti

  • The S&P 500 INDEX is massively oversold WEEKLY (and DAILY).
  • Our models indicate the index is trading in the “Tails” area of the LONG model, a reversal is probably imminent, but forecasts in this  price area are less reliable.
  • Accumulation can start from Monday’s low prices (around 5100), the reversal will probably come next week.

Drop in Gas Rigs Drives US Rig Count Downward

By Suhas Reddy

  • The US oil and gas rig count declined by three to 586 for the week ending 02/Aug, following two consecutive weeks of increases. 
  • The US oil rig count held steady at 482, after rising by 5 last week. Gas rigs decreased by three to 98, marking a second consecutive weekly decline.  
  • In May, US crude oil production experienced its first monthly decline since January, while natural gas output dropped to its lowest level since February 2023. 

Royal Caribbean Group: Expansion into New Markets and Destinations & Key Factors Driving Our ‘Buy’ Rating! – Financial Forecasts

By Baptista Research

  • Royal Caribbean Group has reported a robust set of results for the second quarter of 2024, showcasing strong demand and positive momentum across its portfolio of offerings.
  • The company’s success is evident in the achievement of its ‘Trifecta’ financial targets 18 months ahead of schedule.
  • This three-year financial performance program aimed to deliver triple-digit adjusted EBITDA per APCD, double-digit adjusted earnings per share (EPS), and a return on invested capital in the teens, all of which have been met.

Quest Diagnostics: Will The Acquisition of Canadian Lab Provider LifeLabs Be A Game Changer? – Major Drivers

By Baptista Research

  • Quest Diagnostics delivered a mixed yet overall positive performance in its recent financial results.
  • The company reported a 2.5% increase in total revenues, with base business revenues growing by nearly 4%.
  • This growth is attributed to the expansion of new physician and hospital customers and an improved test mix, with advanced diagnostics seeing greater adoption and healthcare utilization remaining strong.

The Printer is Coming

By Etherbridge

  • Financial markets are a humbling mechanism.
  • The past two weeks remind us just how difficult predicting the future can be.
  • Since our market cycle indicator signalled a crypto slowdown on June 2nd, we have been risk-off.

Kellanova on Mars’ Radar: What Makes This Snack Leader a Prime Target?

By Baptista Research

  • Kellanova, a renowned snack food manufacturer known for brands like Cheez-It and Pringles, has recently attracted the interest of Mars, the global confectionery giant behind M&M’s and Snickers.
  • With a market value of approximately $27 billion, including debt, Kellanova is a significant player in the packaged food sector.
  • Despite its robust market presence and diverse product portfolio, Kellanova’s shares have underperformed relative to peers, presenting a potential acquisition opportunity.

3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • In the second quarter of 2024, 3M Company reported a robust financial performance, characterized by a 40% increase in non-GAAP earnings per share to $1.93 and modest organic revenue growth of 1%.
  • The adjusted free cash flow for the period was $1.2 billion, showcasing a conversion rate of 109%.
  • These results reflect the company’s ongoing efforts to navigate significant structural changes and market challenges, leveraging operational efficiencies, and recent strategic adjustments, including the spin-off of its Health Care business and the organizational shift to a global business unit structure.

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Aug 06
0

Daily Brief China: China Traditional Chinese Medicine, BYD, Prada S.P.A., Beijing Capital International Airport (BCIA), MDL Wholesale, New World Development, Saint Bella, China Oil And Gas and more

By | China, Daily Briefs

In today’s briefing:

  • China TCM (570.HK) Privatization Update – Things Are Still Manageable
  • China Consumption Weekly (5 Aug 2024): BYD, Tesla, Seres, Alibaba, New Oriental, TAL
  • The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)
  • BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive
  • MDL Wholesale Pre-IPO Tearsheet
  • Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development
  • Saint Bella IPO: Growth Story Intact, A First-Mover Advantage in Postpartum Care Market in China
  • China Oil & Gas – ESG Report – Lucror Analytics

China TCM (570.HK) Privatization Update – Things Are Still Manageable

By Xinyao (Criss) Wang

  • What disappoints investors is that privatization progress is slower-than-expected. Since approval is in “advanced stage”, August update is eye-catching. Investors may need more patience with this type of SOE deal. 
  • The key to the success of this privatization lies in whether CNPGC is willing to abide by its commitments. If yes, CNPGC will take all measures to solve the problems.
  • According to our valuation calculation, even without this privatization, HK$3.5/share is fair for China TCM. Reasonable share price is above HK$5/share. Don’t forget, the privatization is still on the agenda.

China Consumption Weekly (5 Aug 2024): BYD, Tesla, Seres, Alibaba, New Oriental, TAL

By Ming Lu

  • In July, BYD’s deliveries increased by 31% YoY and Tesla’s deliveries in mainland China increased by 47% YoY.
  • Alibaba Taobao will soften its “refund only” rule, but Alibaba Hellobike raised its usage price.
  • New Oriental revenue increased by 32% YoY and TAL revenue increased by 50% YoY in the May quarter.

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)

By David Mudd

BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

By Eric Chen

  • Market’s muted response to the airport’s worse-than-expected 1H24 losses suggest investors are looking beyond.
  • While non-aviation businesses will remain under pressure in the near-term, potential for earnings growth from fare hike could be significant and is not at all reflected at current valuation.
  • Free cash flow turning positive in 2024 also open to door for restoring dividend payments, which will be another catalyst for stock re-rating. Risk reward payoff gets increasingly positive.   

MDL Wholesale Pre-IPO Tearsheet

By Ethan Aw

  • MDL Wholesale (WMHGCZ CH) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by UBS, CMS, CMBI, Deutsche Bank, BOCI, and China Galaxy.
  • MDL Wholesale is a leading food and FMCG distribution solution provider in China, providing a broad range of customers and retailers with high-quality merchandise and convenient solutions
  • Its solutions mainly include (i) food service and distribution, (ii) welfare and gifting, (iii) retailer distribution (comprising product sales to retailers and supply chain services) and (iv) merchandise wholesale. 

Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Saint Bella IPO: Growth Story Intact, A First-Mover Advantage in Postpartum Care Market in China

By Andrei Zakharov

  • Saint Bella, a premium postpartum care service provider, filed to go public in Hong Kong. UBS and CITIC Securities are leading the offering.
  • Saint Bella operates ultra-premium postpartum centers in Asia, which are located at luxury hotels and detached villas. The company opened its first postpartum center in Hangzhou in 2017.
  • With strong multi-brand strategy and asset-light business model, Saint Bella is uniquely positioned in premium segment under Saint Bella, Bella Isla and Baby Bella brands.

China Oil & Gas – ESG Report – Lucror Analytics

By Leonard Law, CFA

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess China Oil & Gas’ ESG as “Adequate”, in line with the Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

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Aug 06
0

Daily Brief India: Adani Wilmar, Polyplex Corporation, Ola Electric, JITF Infralogistics, United Spirits, Akums Drugs and Pharmaceuticals, New World Development, Kalyan Jewellers, Tata Motors Ltd, UPL Ltd and more

By | Daily Briefs, India

In today’s briefing:

  • Why Adani Enterprises Shareholder Will Receive Share of Adani Wilmar?
  • The Beat Ideas: What Makes Polyplex a Comfortable Bet at the Bottom of Packaging Material Cycle
  • Ola Electric IPO: Forecasts and Valuation
  • The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals
  • Narrative and Numbers | Alcoholic Beverages | FY24
  • Akums Drugs and Pharmaceuticals IPO Trading – Strong Demand and a Decent Margin of Safety
  • Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development
  • Kalyan Jewellers:1QFY25-Glittering Performance. David Outshines Goliath in Growth
  • Tata Motors – Earnings Flash – Q1 FY 2024-25 Results – Lucror Analytics
  • Morning Views Asia: UPL Ltd

Why Adani Enterprises Shareholder Will Receive Share of Adani Wilmar?

By Nimish Maheshwari

  • Adani Enterprises (ADE IN) demerged its stake in its Food FMCG business of Adani Wilmar (AWLTD IN) to its shareholder.
  • The demerger aims to comply with SEBI’s minimum public shareholding requirement, reducing promoter stake and enhancing public stake.
  • This strategic move positions Adani Wilmar for focused growth, unlocking value for shareholders and reducing promoter selling pressure.

The Beat Ideas: What Makes Polyplex a Comfortable Bet at the Bottom of Packaging Material Cycle

By Sudarshan Bhandari

  • Polyplex is the integrated packaging player with global manufacturing facilities catering global customers and wide industries with its wide product portfolios
  • Polyplex saw a 70% jump in exports while there has been a significant jump in product prices and spreads
  • Significant investment by an FMCG veteran into another packaging player at the bottom of the cycle further strengthens the thesis.

Ola Electric IPO: Forecasts and Valuation

By Shifara Samsudeen, ACMA, CGMA

  • Ola Electric (1700674D IN) plans to raise INR55bn through fresh issue of shares while existing shareholders will offer 84.9m shares at an indicative IPO price band of INR72-76 per share.
  • We expect the company’s revenues to continue to expand and grow at much higher rates during the next few years compared to competitors in the Indian two-wheeler market.
  • Our valuation analysis suggests that Ola Electric’s IPO is attractively priced compared to peers and we would suggest subscribing for the company’s IPO.

The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals

By Sudarshan Bhandari

  • JITF Infralogistics (JITFIN IN) sells its railway wagon business to Texmaco Rail And Engineering for Rs 465 crore.
  • The sale marks a strategic shift towards focusing on water and urban infrastructure segments, leveraging growing market demands and government initiatives.
  • JITF’s strategic sale and focus on infrastructure position it for substantial growth, driven by its robust order book and government support.

Narrative and Numbers | Alcoholic Beverages | FY24

By Pranav Bhavsar

Akums Drugs and Pharmaceuticals IPO Trading – Strong Demand and a Decent Margin of Safety

By Ethan Aw

  • Akums Drugs and Pharmaceuticals (0200361D IN) raised around US$222m in its India IPO, after pricing the deal at the top end of the range at INR679/share.
  • Akums Drugs and Pharmaceuticals (ADP) is a pharmaceutical contract development and manufacturing organization (CDMO) offering a comprehensive range of pharmaceutical products and services in India and overseas.
  • We have looked at various aspects of the deal in our previous notes. In this note, we talk about demand and trading dynamics.

Morning Views Asia: Adani Ports & Special Economic Zone, Indika Energy, New World Development

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

Kalyan Jewellers:1QFY25-Glittering Performance. David Outshines Goliath in Growth

By Devi Subhakesan

Tata Motors – Earnings Flash – Q1 FY 2024-25 Results – Lucror Analytics

By Trung Nguyen

Tata Motors’ Q1/24-25 results were decent, with revenues and profit reaching record levels. However, net debt increased slightly following investment expenditure, preparations for the Range Rover EV launch and dividend payments. We share the company’s view that growth this year will likely be stable compared to the high base of FY 2023-24, due to: [1] consumer expectations surrounding the Range Rover EV launch and its initial revenue effects; and [2] the company’s profit margins decreasing slightly to cover the substantial initial costs for marketing, as well as the continuous quality improvements for new EV models. However, the company is confident about its FY 2025-26 target of a 10% EBIT margin. This may occur if the new electric models achieve stable quality rapidly, thus gradually reducing costs or even increasing the selling price.

Morning Views Asia: UPL Ltd

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Aug 06
0

Daily Brief Japan: Descente Ltd, Kokusai Electric , C.I. TAKIRON Corporation, CELSYS, Nikkei 225, Macnica Holdings Inc, Shofu Inc, I Net Corp and more

By | Daily Briefs, Japan

In today’s briefing:

  • Itochu (8001 JP) Launches Lowball TOB for Descente (8114) – Buying China on the Cheap
  • Kokusai Electric (6525): Global Index Inclusion Highly Dependent on Free Float
  • Itochu Buying Out Sub CI Takiron (4215) Below Book – Too Cheap And Weak Process/Transparency
  • Descente (8114 JP): Itochu’s (8001 JP) Light Pre-Conditional Offer
  • C.I.TAKIRON (4215 JP): Itochu’s (8001 JP) Light Tender Offer at JPY870
  • TOPIX Inclusions: Who Is Ready (August 2024)
  • Time to Buy Japan?
  • Macnica Holdings (3132 JP) – Q1 FY25 Results Update
  • Shofu (7979) – Solid Execution of Overseas Growth and Profitability Expansion
  • I Net Corp (9600 JP): Initial Coverage

Itochu (8001 JP) Launches Lowball TOB for Descente (8114) – Buying China on the Cheap

By Travis Lundy

  • Today, Itochu Corp (8001 JP) announced it would launch a Tender Offer when approvals were received, to buy out minorities in Descente Ltd (8114 JP) at ¥4,350/share.
  • Itochu was buying at that price or higher, in the market, in October 2023. Earnings and book are up since then. Outlook for the Descente China Holdings affiliate? Great. 
  • The valuation transparency is disappointing. Activists would have 3mos or so to push for more. But with friendly holders, they get very close to the minimum anyway.

Kokusai Electric (6525): Global Index Inclusion Highly Dependent on Free Float

By Dimitris Ioannidis

  • IPO lock-up expiry of Kokusai Electric (6525 JP) results in a forecasted increase in free float to 35% and fcap of $2.9bn for the August 2024 review. 
  • Secondary offering of Kokusai Electric (6525 JP) results in a forecasted increase in free float to 60-65% and latest fcap of $3.4bn- $3.7bn for the November 2024 review. 
  • Inclusion will be determined based on fcap against the fcap threshold. Fcap uncertainty for November is largely driven by stock price fluctuations and the Greenshoe Option. 

Itochu Buying Out Sub CI Takiron (4215) Below Book – Too Cheap And Weak Process/Transparency

By Travis Lundy

  • Itochu Corp (8001 JP) today announced another TOB to buy out minorities of a sub other than Descente Ltd (8114 JP). C.I. TAKIRON Corporation (4215 JP) at ¥870. A takeunder.
  • The stock was up a lot today I assume on news I didn’t see. Slightly lower than the close. Low EV/EBITDA multiple. Lacking transparency.
  • The Board is OK selling at below book, but if one takes out net cash, securities, net receivables, and inventory/materials of one quarter of sales, the rest is 0.54x book.

Descente (8114 JP): Itochu’s (8001 JP) Light Pre-Conditional Offer

By Arun George

  • Descente Ltd (8114 JP) has recommended a pre-conditional tender offer from Itochu Corp (8001 JP) at JPY4,350, 16.6% premium to the undisturbed price. 
  • The pre-condition is approval under the competition laws of Japan and China. The offer is anticipated to commence in early November. In January 2019, Itochu completed a hostile partial offer.
  • While the offer is attractive vs peer multiples, it is light vs historical trading ranges. Securing the required acceptance rate could prove challenging as the price is light. 

C.I.TAKIRON (4215 JP): Itochu’s (8001 JP) Light Tender Offer at JPY870

By Arun George

  • C.I. TAKIRON Corporation (4215 JP) has recommended a tender offer from Itochu Corp (8001 JP) at JPY870, a 9.7% premium to the undisturbed price of JPY793 (2 August).
  • The lower limit of the tender offer is set at a 10.97% ownership ratio. The tender offer runs from 6 August to 18 September, with payment from 26 September. 
  • While attractive vs peer multiples, the offer is light due to a skinny takeover premium, an implied P/B below 1x, and 9% below the mid-point IFA DCF valuation. 

TOPIX Inclusions: Who Is Ready (August 2024)

By Janaghan Jeyakumar, CFA

  • Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
  • SUNWELS Co (9229 JP) and Macbee Planet (7095 JP) moved to the Prime market in July 2024 which means there will TOPIX Inclusions at the end of August 2024.
  • Our pre-event pick CELSYS (3663 JP) has seen its price fall by more than 20% during the recent market sell-off and it is close to a key share price threshold.  

Time to Buy Japan?

By Douglas Busch

  • Nikkei looking oversold on all daily, WEEKLY, and MONTHLY timeframes.
  • KWEB records strong bullish engulfing candle on weak overall tape Monday.
  • MELI versus AMZN ratio chart favoring the former. Technical complexion change.

Macnica Holdings (3132 JP) – Q1 FY25 Results Update

By Astris Advisory Japan

  • In line with the company’s plan –Semiconductors saw a lower segment OP margin (7.3% Q1 FY3/24, 4.0% Q1 FY3/25) with a revenue decline in profitable Industrial (-34.8 YoY) due to weakness in the semiconductor market.
  • Compared to the previous quarter, the segment OP margin declined (5.4% Q1 FY3/24, 4.0% Q1 FY3/25) with poorer sales due to a higher contribution from less-profitable Memory.
  • However, the revenue decline in Industrial was less pronounced (-2.7% QoQ), a sign of bottoming out. 

Shofu (7979) – Solid Execution of Overseas Growth and Profitability Expansion

By Astris Advisory Japan

  • Q1 FY3/25 results were ahead of our expectations, with Shofu’s solid execution overseas, with overseas sales growth of 20.2% YoY, and making up 60.5% of the total.
  • Its competitive and high-margin Chemical products (CAD/CAM resin materials and restorative filling materials) grew 27.9% YoY and made up 32.6% of total sales (29.1% in Q1 FY3/24).
  • This combination of overseas growth and sales mix improvement resulted in a record-high quarterly OPM of 16.4%. 

I Net Corp (9600 JP): Initial Coverage

By Shared Research

  • FY03/24 results: revenue of JPY37.8bn (+7.9% YoY), operating profit of JPY2.9bn (+35.6% YoY), recurring profit of JPY2.9bn (+34.9% YoY), net income attributable to owners of the parent of JPY2.2bn (+63.6% YoY), and dividend per share of JPY53.0 (+JPY5.0).
  • All services saw higher revenue YoY, while the company succeeded in implementing price revisions, mainly in the data center business, and reducing overall costs.
  • FY03/25 forecast: revenue of JPY40.4bn (+7.0% YoY), operating profit of JPY3.3bn (+12.6% YoY), recurring profit of JPY3.2bn (+9.9% YoY), and net income attributable to owners of the parent of JPY2.6bn (+19.4% YoY).

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Aug 06
0

Daily Brief Industrials: JITF Infralogistics, Beijing Capital International Airport (BCIA), Carrier Global , 3M Co, Honeywell International, L3Harris Technologies , Masco Corp, Nagase & Co Ltd, Norfolk Southern, Northrop Grumman and more

By | Daily Briefs, Industrials

In today’s briefing:

  • The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals
  • BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive
  • Carrier Global Corporation: Expansion in Data Center Cooling Solutions A Critical Growth Catalyst? – Major Drivers
  • 3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers
  • Honeywell International: Portfolio Optimization & Acquisitions With An Emphasis on Long-Cycle Business Growth! – Major Drivers
  • L3Harris Technologies Inc.: Integration & Optimization Post-Aerojet Rocketdyne Acquisition
  • Masco Corporation: These Are The 4 Biggest Factors Driving Its Performance In 2024 & 2025! – Major Drivers
  • Nagase & Co Ltd (8012 JP): Q1 FY03/25 flash update
  • Norfolk Southern Corporation: Leveraging Intermodal Strengths To Drive Growth! – Major Drivers
  • Northrop Grumman Corporation: A Bear’s Perspective On What Could Drive Them Down! – Major Drivers

The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals

By Sudarshan Bhandari

  • JITF Infralogistics (JITFIN IN) sells its railway wagon business to Texmaco Rail And Engineering for Rs 465 crore.
  • The sale marks a strategic shift towards focusing on water and urban infrastructure segments, leveraging growing market demands and government initiatives.
  • JITF’s strategic sale and focus on infrastructure position it for substantial growth, driven by its robust order book and government support.

BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

By Eric Chen

  • Market’s muted response to the airport’s worse-than-expected 1H24 losses suggest investors are looking beyond.
  • While non-aviation businesses will remain under pressure in the near-term, potential for earnings growth from fare hike could be significant and is not at all reflected at current valuation.
  • Free cash flow turning positive in 2024 also open to door for restoring dividend payments, which will be another catalyst for stock re-rating. Risk reward payoff gets increasingly positive.   

Carrier Global Corporation: Expansion in Data Center Cooling Solutions A Critical Growth Catalyst? – Major Drivers

By Baptista Research

  • Carrier’s latest earnings for Q2 2024 indicates a quarter of continued strength and advancement towards the company’s strategic goals.
  • Under the leadership of CEO David Gitlin and CFO Patrick Goris, the company has reaffirmed its commitment to becoming a global leader in intelligent climate and energy solutions, marked by notable order increases and strong margin expansions.
  • Positive aspects from the quarter include a 12% increase in reported sales, significantly buoyed by the inclusion of Viessmann Climate Solutions.

3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • In the second quarter of 2024, 3M Company reported a robust financial performance, characterized by a 40% increase in non-GAAP earnings per share to $1.93 and modest organic revenue growth of 1%.
  • The adjusted free cash flow for the period was $1.2 billion, showcasing a conversion rate of 109%.
  • These results reflect the company’s ongoing efforts to navigate significant structural changes and market challenges, leveraging operational efficiencies, and recent strategic adjustments, including the spin-off of its Health Care business and the organizational shift to a global business unit structure.

Honeywell International: Portfolio Optimization & Acquisitions With An Emphasis on Long-Cycle Business Growth! – Major Drivers

By Baptista Research

  • Honeywell International Inc. delivered a mixed performance in its second quarter 2024 earnings, highlighting strengths in certain strategic areas while facing challenges in others.
  • The company’s earnings per share (EPS) and adjusted EPS exceeded guidance, and it achieved the upper range of its organic sales guidance, reflecting a robust operational execution across its diversified portfolio.
  • From a financial perspective, Honeywell saw strong organic growth, particularly in its aerospace sector, which remains a key driver of its overall performance.

L3Harris Technologies Inc.: Integration & Optimization Post-Aerojet Rocketdyne Acquisition

By Baptista Research

  • L3Harris Technologies recently disclosed their second quarter 2024 financial results, demonstrating progress in various areas, though mixed signals in certain segments warrant a nuanced understanding of their financial health and strategic position.
  • On a positive note, L3Harris Technologies reported a robust second quarter, with segment operating margins increasing by 80 basis points year-over-year to 15.6%, and non-GAAP earnings per share (EPS) growing by 9% to $3.24.
  • These results are indicative of the company’s strong ability to manage costs and enhance operational efficiency.

Masco Corporation: These Are The 4 Biggest Factors Driving Its Performance In 2024 & 2025! – Major Drivers

By Baptista Research

  • Masco Corporation, a prominent player in the home improvement and building products sector, reported its financial outcomes for the second quarter of 2024, reflecting a mixed scenario of achievements and challenges.
  • The company demonstrated resilience amidst a tough macroeconomic environment by delivering a strong operational performance, although confronting a slight decline in sales.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Nagase & Co Ltd (8012 JP): Q1 FY03/25 flash update

By Shared Research

  • Sales for Q1 FY03/25 increased 6.8% YoY to JPY239.2bn, with gross profit rising 18.3% YoY to JPY45.8bn.
  • Operating profit for Q1 FY03/25 grew 54.3% YoY to JPY10.7bn, and net income rose 69.8% YoY to JPY7.4bn.
  • Segment results showed significant YoY growth in sales, gross profit, and operating profit across various business segments.

Norfolk Southern Corporation: Leveraging Intermodal Strengths To Drive Growth! – Major Drivers

By Baptista Research

  • Norfolk Southern Corporation presented its second quarter 2024 financial results, revealing mixed outcomes that reflect both ongoing challenges and notable advances in operational efficiencies.
  • The call was led by President and CEO Alan Shaw, alongside executives responsible for various key functions within the organization.
  • One of the significant highlights from the results was the improvement in operating ratio (OR), which stood at 65.1% for the quarter, showcasing a substantial margin enhancement of 480 basis points sequentially.

Northrop Grumman Corporation: A Bear’s Perspective On What Could Drive Them Down! – Major Drivers

By Baptista Research

  • Northrop Grumman’s latest earnings for the second quarter of 2024 showcase robust financial and operational performance.
  • The company reported substantial increases in sales, operating income, and earnings per share (EPS), which surged by 7%, 13%, and 19% respectively compared to the same quarter the previous year.
  • The solid program execution and disciplined cost management have evidently played a key part in driving these results.

💡 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
Sign Up for Free


Aug 06
0

Daily Brief Industrials: JITF Infralogistics, Beijing Capital International Airport (BCIA), Carrier Global , 3M Co, Honeywell International, L3Harris Technologies , Masco Corp, Nagase & Co Ltd, Norfolk Southern, Northrop Grumman and more

By | Daily Briefs, Industrials

In today’s briefing:

  • The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals
  • BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive
  • Carrier Global Corporation: Expansion in Data Center Cooling Solutions A Critical Growth Catalyst? – Major Drivers
  • 3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers
  • Honeywell International: Portfolio Optimization & Acquisitions With An Emphasis on Long-Cycle Business Growth! – Major Drivers
  • L3Harris Technologies Inc.: Integration & Optimization Post-Aerojet Rocketdyne Acquisition
  • Masco Corporation: These Are The 4 Biggest Factors Driving Its Performance In 2024 & 2025! – Major Drivers
  • Nagase & Co Ltd (8012 JP): Q1 FY03/25 flash update
  • Norfolk Southern Corporation: Leveraging Intermodal Strengths To Drive Growth! – Major Drivers
  • Northrop Grumman Corporation: A Bear’s Perspective On What Could Drive Them Down! – Major Drivers

The Beat Ideas: JITF Infralogistics Limited, A Hidden Smallcap Infra Company of Jindals

By Sudarshan Bhandari

  • JITF Infralogistics (JITFIN IN) sells its railway wagon business to Texmaco Rail And Engineering for Rs 465 crore.
  • The sale marks a strategic shift towards focusing on water and urban infrastructure segments, leveraging growing market demands and government initiatives.
  • JITF’s strategic sale and focus on infrastructure position it for substantial growth, driven by its robust order book and government support.

BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

By Eric Chen

  • Market’s muted response to the airport’s worse-than-expected 1H24 losses suggest investors are looking beyond.
  • While non-aviation businesses will remain under pressure in the near-term, potential for earnings growth from fare hike could be significant and is not at all reflected at current valuation.
  • Free cash flow turning positive in 2024 also open to door for restoring dividend payments, which will be another catalyst for stock re-rating. Risk reward payoff gets increasingly positive.   

Carrier Global Corporation: Expansion in Data Center Cooling Solutions A Critical Growth Catalyst? – Major Drivers

By Baptista Research

  • Carrier’s latest earnings for Q2 2024 indicates a quarter of continued strength and advancement towards the company’s strategic goals.
  • Under the leadership of CEO David Gitlin and CFO Patrick Goris, the company has reaffirmed its commitment to becoming a global leader in intelligent climate and energy solutions, marked by notable order increases and strong margin expansions.
  • Positive aspects from the quarter include a 12% increase in reported sales, significantly buoyed by the inclusion of Viessmann Climate Solutions.

3M Company: These Are The 3 Biggest Challenges In Its Path! – Major Drivers

By Baptista Research

  • In the second quarter of 2024, 3M Company reported a robust financial performance, characterized by a 40% increase in non-GAAP earnings per share to $1.93 and modest organic revenue growth of 1%.
  • The adjusted free cash flow for the period was $1.2 billion, showcasing a conversion rate of 109%.
  • These results reflect the company’s ongoing efforts to navigate significant structural changes and market challenges, leveraging operational efficiencies, and recent strategic adjustments, including the spin-off of its Health Care business and the organizational shift to a global business unit structure.

Honeywell International: Portfolio Optimization & Acquisitions With An Emphasis on Long-Cycle Business Growth! – Major Drivers

By Baptista Research

  • Honeywell International Inc. delivered a mixed performance in its second quarter 2024 earnings, highlighting strengths in certain strategic areas while facing challenges in others.
  • The company’s earnings per share (EPS) and adjusted EPS exceeded guidance, and it achieved the upper range of its organic sales guidance, reflecting a robust operational execution across its diversified portfolio.
  • From a financial perspective, Honeywell saw strong organic growth, particularly in its aerospace sector, which remains a key driver of its overall performance.

L3Harris Technologies Inc.: Integration & Optimization Post-Aerojet Rocketdyne Acquisition

By Baptista Research

  • L3Harris Technologies recently disclosed their second quarter 2024 financial results, demonstrating progress in various areas, though mixed signals in certain segments warrant a nuanced understanding of their financial health and strategic position.
  • On a positive note, L3Harris Technologies reported a robust second quarter, with segment operating margins increasing by 80 basis points year-over-year to 15.6%, and non-GAAP earnings per share (EPS) growing by 9% to $3.24.
  • These results are indicative of the company’s strong ability to manage costs and enhance operational efficiency.

Masco Corporation: These Are The 4 Biggest Factors Driving Its Performance In 2024 & 2025! – Major Drivers

By Baptista Research

  • Masco Corporation, a prominent player in the home improvement and building products sector, reported its financial outcomes for the second quarter of 2024, reflecting a mixed scenario of achievements and challenges.
  • The company demonstrated resilience amidst a tough macroeconomic environment by delivering a strong operational performance, although confronting a slight decline in sales.
  • Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Nagase & Co Ltd (8012 JP): Q1 FY03/25 flash update

By Shared Research

  • Sales for Q1 FY03/25 increased 6.8% YoY to JPY239.2bn, with gross profit rising 18.3% YoY to JPY45.8bn.
  • Operating profit for Q1 FY03/25 grew 54.3% YoY to JPY10.7bn, and net income rose 69.8% YoY to JPY7.4bn.
  • Segment results showed significant YoY growth in sales, gross profit, and operating profit across various business segments.

Norfolk Southern Corporation: Leveraging Intermodal Strengths To Drive Growth! – Major Drivers

By Baptista Research

  • Norfolk Southern Corporation presented its second quarter 2024 financial results, revealing mixed outcomes that reflect both ongoing challenges and notable advances in operational efficiencies.
  • The call was led by President and CEO Alan Shaw, alongside executives responsible for various key functions within the organization.
  • One of the significant highlights from the results was the improvement in operating ratio (OR), which stood at 65.1% for the quarter, showcasing a substantial margin enhancement of 480 basis points sequentially.

Northrop Grumman Corporation: A Bear’s Perspective On What Could Drive Them Down! – Major Drivers

By Baptista Research

  • Northrop Grumman’s latest earnings for the second quarter of 2024 showcase robust financial and operational performance.
  • The company reported substantial increases in sales, operating income, and earnings per share (EPS), which surged by 7%, 13%, and 19% respectively compared to the same quarter the previous year.
  • The solid program execution and disciplined cost management have evidently played a key part in driving these results.

💡 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
Sign Up for Free