Daily Brief Industrials: Kerry Logistics Network, Cainiao Smart Logistics Network, L3Harris Technologies , Southwest Airlines Co, Frontier Group Holdings, FTC Solar , Union Pacific, Enovix , Northrop Grumman and more

• On the 29th December 2023, Kerry Logistics Network (636 HK) (KLN) announced it would in-specie its entire 52.1% stake in Kerry Express Thailand (KEX TB).
• Given S.F. Holding (002352 CH) holds a 51.5% stake in KLN, it will hold 26.8% in KET post-in-specie, triggering an unconditional MTO. The MTO price will be THB5.50/share. 
• Thai SFC approval has now been satisfied.  The MTO should commence around the 13th Feb. with payment ~26th March. KLN, cum-entitlement to KEX, is the 19 Feb.

• CaiNiao’s revenue growth remained strong, up +24% Y/Y in December quarter
• EBITA turned positive from loss in prior year period, but margin < FYQ2
• Overall, an impressive set of results that distinguishes CaiNiao from express peers

• Through the fourth quarter 2023, earnings call at L3Harris Technologies showed healthy financial results accompanied by strong performance in its various portfolios.
• The company reported a significant $23 billion in orders, marking a record increase, and a doubling of its backlog to $33 billion since the merger.
• This growth trajectory was propelled by key U.S. Army awards and notable progress in satellite awards.

• Southwest Airlines Co.’s fourth-quarter 2023 earnings underscored some significant strides the company has taken over the past year, balanced by the ongoing challenges that the airline industry continues to face.
• In terms of the positive highlights, CEO Bob Jordan commended the company for its impressive resilience, noting that they had successfully implemented a comprehensive winter weather action plan, fully staffed their operation, and restored their network following a disruptive winter storm in 2022.
• Furthermore, the company saw improvement in almost every operational metric, maintained a 99% completion factor across the year, and secured nine labor agreements in a year.

• Frontier Airlines, having suffered a highly challenged 2023, is set to see a significant inflection point for pricing and margins in 2Q24.
• Management aims to deliver 3-6% PBT margins in 2024 building to 10-14% in 2025, representing a reversion to pre-pandemic levels. Read across for LCCs globally.
• We now expect a small positive FCF in 2024, building to >$200m in 2025, which should help inspire confidence in the ULCC’s ability to thrive with higher costs.

Key points (machine generated)

• FTCI’s stock price has dropped due to residential solar sector weakness and uncertainty regarding subsidies/tax credits, but the company still maintains a strong financial position with $30 million in cash and a backlog of $1.6 billion.
• The company’s 2p tracker design is considered advantageous and has not experienced any known failures.
• The author believes that a potential sale of FTCI could generate a price that is 3-4 times its market cap, thanks to its patented design, salesforce, and backlog, which contrasts with the struggling residential solar sector that heavily relies on aggressive sales tactics. Utility-scale solar is regarded as a more cost-effective option.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The financial results of Union Pacific Corporation for Q4 2023, as well as for the full year, offer insights into the company’s operating performance.
• Union Pacific reported a Q4 net income of $1.7 billion or $2.71 per share, up from $1.6 billion or $2.67 per share in Q4 2022.
• While company revenue and costs remained flat year-over-year, Union Pacific saw an improvement in its operating ratio, which points to improved efficiency.

Key points (machine generated)

• Consumer electronic devices like smartphones and tablets increasingly rely on multiple sensors and components, such as touch screens and fingerprint sensors, that require energy to operate, which can decrease battery life.
• Enovix has developed an advanced lithium-ion battery technology that offers higher energy density, allowing for longer operating times between charges.
• This technology could help address the strain on battery life caused by the increasing number of hardware components in consumer electronics.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Northrop Grumman Corporation’s Q4 and year-end 2023 earnings call highlighted the company’s robust performance despite economic pressures.
• They reported a revenue increase of over 7% and a new record backlog exceeding $84 billion, setting a solid foundation for future growth.
• The company’s outlook documented in the call underlines strong operational performance generated at the high end of their guidance range and comfortably exceeding sales guidance.