Daily Brief Industrials: JD Logistics , Rockwell Automation, Sodick Co Ltd and more

In today’s briefing:

JD Logistics (2618 HK): There Are More Rooms
Rockwell Automation: Expansion of Partnership with NVIDIA & Key Developments – Major Drivers
Sodick (6143) – An Upbeat Result Reflecting Transformational Efforts

JD Logistics (2618 HK): There Are More Rooms

Even after the 28% surge in share price since the 1H24 result, JD Logistics (2618 HK) still deserves a look as fundamentals have improved, especially with better cost control.
JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.
We like its lower reliance on JD.com (9618 HK) and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.

Rockwell Automation’s latest quarterly earnings underscore both strengths and challenges within its business environment, indicating a mixed financial landscape that investors need to consider.
On the positive side, Rockwell Automation has shown adeptness in managing costs amidst lower order volumes, which has helped sustain margin performance.
The company has continued to push forward with its cost-cutting initiatives, anticipating $100 million in savings in the latter half of this fiscal year, alongside projections for an additional $120 million in savings next year.

Q1-2FY12/24 results were a positive surprise in our view.
Quarterly Q2 FY12/24 OPM of 4% returned to positive territory after four consecutive quarters of losses, driven by a combination of price hikes, revision to the product line-up to improve sales mix, restructuring measures, and sales volume expansion with a marked jump in China demand for electronic discharge machines.
We believe Sodick has begun to transform to become more resilient and operationally efficient.

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