In today’s briefing:
- Nidec (6594) | Forget the EV Slump
- HD Hyundai Marine Solution IPO – Thoughts on Valuation
- PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers
- Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers
- European Airlines – Bridging Flag Carrier 1Q24 and 2024 Prospects
- SiteOne Landscape Supply Inc.: Initiation Of Coverage – Strategic Acquisitions & 3 Other Fundamental Aspects Fueling Its Growth! – Financial Forecasts
- Zongmu Technology Pre-IPO Tearsheet
Nidec (6594) | Forget the EV Slump
- Nidec faces challenges amid global EV sales decline, with shares and valuations reflecting market pessimism.
- Anticipated catalysts include forthcoming guidance, potential MTP reassessment, and a strategic acquisition opportunity.
- At 18x EBIT, Nidec looks a compelling play on secular themes of electrification, automation, and energy efficiency.
HD Hyundai Marine Solution IPO – Thoughts on Valuation
- HD Hyundai Marine Solution (443060 KS) is looking to raise up to US$551m in its Korean IPO.
- HD Hyundai Marine Solution (HMS from hereon) is a ship aftermarket service provider that provides necessary services throughout a ship’s life cycle after the delivery of a new ship.
- In our previous notes, we talked about the company’s historical performance and undertook a peer comparison. In this note, we share our thoughts on valuation.
PGT Innovations Inc.: Initiation Of Coverage – Maintaining A Robust Growth Trajectory Despite Market Uncertainties! – Major Drivers
- In the third quarter of 2023, PGT Innovations displayed a strong financial performance despite operating in an unpredictable market environment.
- The company’s balanced exposure to new construction and repair and remodeling channels has enabled them to deliver consistent record sales and impressive profits over the year.
- By combining a continued focus on operational efficiency and productivity, PGT Innovations managed to achieve a total revenue of $400 million and an adjusted EBITDA of $78 million in the third quarter.
Sai Gon Cargo Services (SCS VN) Update: Price Hikes, Strong Q1 2024 Operational Numbers
- Sai Gon Cargo Service (SCS VN) announced an increase in its pricing (details in note) effective April 1st, with a 10% increase across most categories.
- March cargo numbers showed a substantial 47% YoY increase, as cooperation with Qatar Airways got underway in February. Q1 FY24 numbers were up 34% YoY.
- The stock trades at 12.5x FY24e numbers with an 8% yield, assuming a 20%YoY revenue and profit growth (and a 100% payout), with an upside to these conservative numbers.
European Airlines – Bridging Flag Carrier 1Q24 and 2024 Prospects
- We publish quarterly earnings bridges through 1Q-4Q24 for Air France-KLM, IAG and Lufthansa, which illustrate 1Q will be difficult yoy.
- This renders forward commentary extremely important and summer pricing prospects are encouraging. Delta kicks off airline reporting season globally on 10 April and is likely to set a bullish tone
- However the European low cost carriers easyJet, Ryanair and Wizz Air are seeing greater earnings momentum than the flag carriers given short haul fare strength.
SiteOne Landscape Supply Inc.: Initiation Of Coverage – Strategic Acquisitions & 3 Other Fundamental Aspects Fueling Its Growth! – Financial Forecasts
- SiteOne Landscape Supply Inc. ended the year 2023 with notable growth in their 4th quarter, coupled with a modest increase in adjusted EBITDA, an 8% growth in net sales, and a record operating cash flow.
- The company also made 11 acquisitions, adding companies with strong customer relationships while also expanding their product lines.
- However, 2023 presented some challenges including lower market demand, mounting operating costs, gross margin normalization, and commodity price deflation.
Zongmu Technology Pre-IPO Tearsheet
- Zongmu Technology (1491595D CH) is looking to raise up to US$150m in its upcoming HK IPO. The deal will be run by Huatai and BNP Paribas.
- Zongmu Technology is a Chinese advanced driver assistance system (ADAS) solutions provider, offering solutions with comprehensive autonomous driving functions.
- As a Tier 1 supplier, it undertakes software design, hardware design, system design and the integration of these components to develop solutions for mass deployment.
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