In today’s briefing:
- Boqi Env (2377 HK): MBO; Or Sinopec Offer?
- Bull Trap Still Brewing?; Treasury Yields and DXY Climbing; Stay Defensive With $SPX Below 5783
- Credit Bureau Asia: Good Fundamentals Even Better Valuations
- Resideo Technologies Inc.: Will Their Strengthened Market Position In Safety Products Last? – Major Drivers
- UGRO: Momentum Continues to Build; Reiterate Buy, $8 PT
- Acuity Brands Inc.: Expansion Into New Vertical Markets & Integration Of Intelligent Spaces Solutions! – Major Drivers
- Simpson Manufacturing Co.: What Is Their Residential Market Expansion Strategy & The Challenges Lying Ahead? – Major Drivers
Boqi Env (2377 HK): MBO; Or Sinopec Offer?
- China Boqi Environmental Hol (2377 HK), a flue gas treatment play in China, is suspended pursuant to the Takeovers Code.
- Co-Founders Zeng Zhijun (27.71%, chairman) and Richard Cheng (16.76%, NED) collectively hold 44.47%. However, they had a falling out in January 2021, and probably won’t jointly bid. Individually, maybe.
- China Petroleum & Chemical (386 HK) (a.k.a. Sinopec) holds 10.97% and could make a move to secure control.
Bull Trap Still Brewing?; Treasury Yields and DXY Climbing; Stay Defensive With $SPX Below 5783
- The $SPX continues to hold below 5783, the upper-end of an important target/resistance area (5670-5783) we’ve discussed since our 8/13/24 Compass, just after SPX hit our 5100-5191 “expected pullback zone.”
- The current “breakout” above 5670 is an extraordinarily weak one, which suggests a false breakout/bull trap is brewing; SPX has spent nearly three weeks above 5670, with zero upside follow-through.
- As long as the SPX does not have a weekly close above 5783 we continue to recommend reducing risk and shifting to defensives.
Credit Bureau Asia: Good Fundamentals Even Better Valuations
- Credit Bureau Asia (CBA SP) subscription-based services and transaction fees generate consistent, recurring revenue from financial institutions and other businesses, ensuring significant financial stability and strong financial metrics.
- Regulatory relationships, vast data repositories, and long-standing client relationships and contracts create significant competitive advantages and protect market share.
- If markets can get comfortable with this microcap delivering 3% long-term growth forecast and sustainability of current operating and financial metrics the stock should see at least100% upside.
Resideo Technologies Inc.: Will Their Strengthened Market Position In Safety Products Last? – Major Drivers
- Resideo Technologies showcased robust financial performance in its second quarter of 2024, significantly surpassing its expected earnings outlook.
- The company reported an adjusted EBITDA of $175 million, considerably ahead of its forecasted range, reflecting a strong operational execution across its divisions.
- Notably, the Products & Solutions segment achieved a remarkable adjusted EBITDA margin of 24.8%, an increase of 460 basis points from the previous year, driven by gross margins that surpassed 41%.
UGRO: Momentum Continues to Build; Reiterate Buy, $8 PT
- We are reiterating our Buy Rating, $8 price target and projections for urban-gro, as the company continues to register material progress, which we believe will become more obvious going forward.
- Further, while we view the potential for Florida to legalize recreational cannabis as a key positive catalyst, we do not believe it will be the only potential upside driver for urban-gro, as the company has continued to make material progress on the commercial side of the business, leveraging their turnkey services to gain market share and deeper competitive advantages.
- As such, and, we believe, with the company on track to become fully current in their financial filings, we reiterate our Buy rating and $8 price target for UGRO.
Acuity Brands Inc.: Expansion Into New Vertical Markets & Integration Of Intelligent Spaces Solutions! – Major Drivers
- Acuity Brands’ fiscal 2024 fourth quarter results display a robust performance characterized by solid sales growth, margin expansion, and increased profitability across its principal operational segments—Lighting and Intelligent Spaces.
- The company’s strategic initiatives have bolstered operational productivity and enhanced its product offerings, evidenced by its notable revenue increase to $1 billion, which marks a 2% rise from the previous year.
- This growth was significantly contributed by both the Lighting and Intelligent Spaces segments, demonstrating the effectiveness of Acuity Brands’ diversified business approach.
Simpson Manufacturing Co.: What Is Their Residential Market Expansion Strategy & The Challenges Lying Ahead? – Major Drivers
- Simpson Manufacturing Company’s second quarter 2024 financial results depict a mixed picture amidst a challenging housing market.
- Delving deeper, the company reported net sales of $597 million, which is consistent with the prior year’s quarter.
- This stability in sales underscores the company’s resilience in a turbulent market.
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