Daily Brief Industrials: Canvest Environmental Protection Group, MSTC Limited, Melrose Industries , Siteone Landscape Supply, UFP Industries and more

• Grandblue Environment Co A (600323 CH) continues to make steady progress in satisfying the precondition for its HK$4.90 privatisation offer for Canvest Environmental Protection Group (1381 HK). 
• Two of the five preconditions are satisfied, and another will be satisfied by 20 January. The long stop date of 17 July provides ample time to satisfy the remaining two. 
• Although the peers have materially re-rated, the offer implies a premium compared to peer multiples. Vote risk remains low, aided by selling by a shareholder with a blocking stake. 

• MSTC Limited (MSTCLTD IN) is transitioning to an e-commerce-centric model, reducing dependence on trading sales and focusing on high-margin e-commerce services.
• MSTC sold its subsidiary Ferro Scrap Nigam Limited for an amount of Rs. 300 Crores which will be utilised in the near future.
• MSTC has a strong cash position (Rs. 1,300 Cr) that can be used for special dividends, growth-oriented investments, or share buyback programs.

The aerospace sector outlook remains positive, with lengthy order books at the primes (Airbus and Boeing) and total passenger flying hours in 2024 on schedule to exceed post-pandemic levels, supporting a strong aftermarket. The former will assist margin recovery for Melrose Industries’ original equipment (OE) operations, while increased flying hours are already generating strong growth and margin in the aftermarket business. Hence, our adjustment to estimates for external factors, such as FX movements, should not detract investors from focusing on the underlying positive dynamics of the business.

• SiteOne Landscape Supply, Inc. reported its financial results for the third quarter of 2024, highlighting several notable developments and challenges faced by the company.
• The results depict a mixed performance influenced by a combination of market challenges, strategic acquisitions, and internal operational improvements.
• On the positive side, SiteOne achieved a 6% increase in net sales totaling $1.21 billion for the quarter.

• UFP Industries Inc. recently announced its third-quarter 2024 results, reflecting a challenging economic environment that has impacted multiple facets of the company’s operations.
• While the results did not meet expectations by current standards, the company is taking strategic measures to navigate through the current economic landscape and position itself for future success.
• Firstly, UFP Industries reported a 10% drop in sales to $1.65 billion, with a decline in selling prices contributing 7% to this decrease and unit sales declining by 3%.