In today’s briefing:
- Mitsubishi Heavy Industries (7011 JP): Take Profits and Wait for Reality to Catch Up
- Shipping Corporation of India Land & Assets Ltd.: Demerger and a Value Bet
- Symbotic Inc. (SYM): Fast Growing AI-Powered Warehouse Automation Supplier
- China Everbright Environment (257 HK): Being Penalised Too Much
- SharkNinja Inc.: Initiation of Coverage – A Story Of Expansion Into New Markets & Categories! – Major Drivers
- Steelcase, Inc. – Tweaking FY25 Estimates; Encouraged by Orders and Cash Flow
- Acuity Brands: Initiation of Coverage – 4 Critical Factors Responsible For Its Future Performance! – Financial Forecasts
Mitsubishi Heavy Industries (7011 JP): Take Profits and Wait for Reality to Catch Up
- MHI’s share price has risen more than 60% year-to-date and nearly tripled over the past 12 months on the improving outlook for Japanese defense contractors.
- A huge increase in new orders, prospects for a doubling of sales and a rapidly rising operating margin on Aircraft, Defense & Space have been factored into the price.
- The shares do not look expensive compared with international comparables, but neither are they particularly cheap. Potential problems, from Japanese defense budget constraints to production glitches, have been ignored.
Shipping Corporation of India Land & Assets Ltd.: Demerger and a Value Bet
- Discover SCILAL’s debut in the stock market after demerger form Shipping Corp Of India (SCI IN), its strategic disinvestment, and the hidden value within its diverse asset portfolio.
- Real Estate Assets in company and future outlook by management of SCILAL over the years going forward.
- The market value of assets is twice more than the book value. Value bet but can take longer time to monetize the same.
Symbotic Inc. (SYM): Fast Growing AI-Powered Warehouse Automation Supplier
- Symbotic is a warehouse automation technology leader and offers end-to-end AI-powered robotic and software platform for supply chains.
- SYM’s hi-tech platform forms its deep competitive moat underpinned by significant R&D spend of $800 million and 575 issued or pending patents.
- Our positive outlook for SYM is underpinned by its hi-tech platform , a large TAM, robust order backlog ($23.2B) and its JV deal with Softbank that opens a large market.
China Everbright Environment (257 HK): Being Penalised Too Much
- Despite a 3.8% decline in FY23 net profit, China Everbright Environment (257 HK)‘s profitability has still outperformed its peers by significant magnitudes.
- Positive notes in the result are an increase in operation service revenue proportion, expansion in EBITDA margin, improvement in financial position, and addition of new projects.
- It is easy for CEE to achieve the market expectation of a 9.8% growth in FY24. Yet, it just trade on 3.6x PER, 8.5% yield, and 0.34x P/B.
SharkNinja Inc.: Initiation of Coverage – A Story Of Expansion Into New Markets & Categories! – Major Drivers
- This is our our first report on household appliances distributor, SharkNinja.
- The company’s Q4 2023 Earnings revealed that it had a robust fourth quarter, with nearly 20% growth in adjusted net sales and more than 70% growth in adjusted EBITDA. The CEO, Mark Barrocas, attributed this to the company’s growth strategy, innovation and the support from both consumers and retail partners.
- The company’s full year sales grew by over 15% nearing to $4.2 billion and with an adjusted EBITDA increase by nearly 39% reaching $720 million.
Steelcase, Inc. – Tweaking FY25 Estimates; Encouraged by Orders and Cash Flow
- We are publishing new estimates for our Steelcase economic model after its solid 4QFY24 earnings.
- Adjusted EPS of $0.23 beat our estimate as well as consensus. Revenue of $775.2 million modestly missed estimates.
- 1QFY25: We tweaked our non-GAAP (adjusted) EPS estimate to $0.11 ($0.10 previously).
Acuity Brands: Initiation of Coverage – 4 Critical Factors Responsible For Its Future Performance! – Financial Forecasts
- This is our first report on building management solutions provider, Acuity Brands.
- The company reported fiscal first quarter earnings, indicating positive performance for the period.
- The company demonstrated strong overall execution as it increased its adjusted operating profit, adjusted operating profit margin, and adjusted diluted earnings per share.
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