Daily Brief Industrials: AKR Corporindo, Hanwha Aerospace, Citic Resources Holdings, GDI Integrated Facility Services, Gibraltar Industries, Talgo SA and more

• AKR Corporindo (AKRA IJ) booked an impressive finish to the year despite slower revenue growth from its trading & distribution business boosted by strong industrial plot sales at JIIPE.
• The company expects trading & industrial volumes to improve in 2024, with retail petroleum becoming more significant with JIIPE expected to see increasing recurrent utilities earnings starting in 2H2024. 
• AKR Corporindo has a strong pipeline of potential tenants for JIIPE and expects to expand its BP JV retail petrol stations by 40-50 this year. Valuations remain attractive.

• On 5 April, Hanwha Aerospace (012450 KS) formally announced that it will spin off its semiconductor equipment and video surveillance units which contributed to about 16% of its revenue. 
• We are Negative on Hanwha Aerospace mainly due to valuations. Its share price has risen so much in the past year that its valuations are no longer attractive.
• Hanwha Aerospace is trading at premium valuation to Lockheed Martin on an EV/EBITDA basis. Despite its recent strong growth, Hanwha Aerospace is no Lockheed Martin. 

• One of a basket of Hong Kong commodity stocks we like
• One off issues in 2023 which should reverse in 2024
• Can also be viewed as  a tangential play on India’s industrial growth

• Fragmented industry with growth opportunities
• Successful acquisitions and expansion
• Focus on customer service and reputation for excellence

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Gibraltar Industries’ Q4 2023 financial results presented a robust year-end performance.
• The company’s leadership positions were expanded, the quality of earnings improved, and strong cash flows were generated.
• Both Residential and Infrastructure perform strongly, and although the Renewable segment faced industry headwinds, it demonstrated excellent margin expansion.

• Ganz Mavag, a public/private consortium, requests authorisation for its €5/share offer for 100% of Talgo SA (TLGO SM). It needs approvals from Spain and seven other EMEA regulators.
• Yesterday’s close remains similar to the announcement date (7 March), gross spread of 11.3%, indicating uncertainty regarding timeline and development. The market is pricing a 48% probability of deal completion.
• The Spanish Government will delay the authorization process. Vs. comparables and considering uncertainties regarding backlog execution, investing in the company seems somewhat risky. The risk/reward ratio is not particularly attractive.