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
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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: Expansion of Partnership with NVIDIA & Key Developments – Major Drivers
- 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.
Sodick (6143) – An Upbeat Result Reflecting Transformational Efforts
- 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.