In today’s briefing:
- Recruit 2Q: Outlook for HR Tech Business Becomes Challenging
- Fanuc (6954) | This Time Is Different
- Growatt Technology Pre-IPO Peer Comparison – Performed Well on Many Fronts
- Jiangsu Expressway (177 HK): Positive Updates from Management
Recruit 2Q: Outlook for HR Tech Business Becomes Challenging
- Recruit Holdings (6098 JP) reported 2QFY03/2023 earnings today. Revenue increased 25.3% YoY to JPY878.4bn (vs consensus JPY842.7bn) while EBIT decreased 8.2% YoY to JPY108.5bn (vs consensus JPY116.1bn).
- HR Tech’s top line growth further slowed down to 40.2% YoY while adjusted EBITDA margin of the segment declined to 30.4% from 40.6% in the same period a year ago.
- The company’s 2QFY03/2023 earnings were better than we expected, however, it shows that the earnings growth is slowing down with weakening of labour markets globally.
Fanuc (6954) | This Time Is Different
- Machine Tool Orders in Japan decreased to 141 billion yen in October from 149 billion yen a year ago.
- The 5.4% decline marks the start of the third downturn in Machine Tool Orders over the past decade.
- We analyse those downturns and believe that Fanuc’s stock price has probably hit bottom, but THIS TIME IS DIFFERENT
Growatt Technology Pre-IPO Peer Comparison – Performed Well on Many Fronts
- Growatt Technology (1833969D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
- Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization.
- In our previous notes, we looked at the company’s past performance. In this note, we undertake a peer comparison.
Jiangsu Expressway (177 HK): Positive Updates from Management
- Jiangsu Expressway (H) (177 HK) has seen marginally weaker traffic in 4Q22 relative to 3Q22 due to sporadic COVID outbreaks but the magnitude is manageable.
- We welcome its indication that stable absolute DPS level will be maintained, with additional target to increase gradually. That means secured FY22 and FY23 yield of at least 8.3%.
- Clean energy investment and exit of property business will improve earnings quality. Projected ROE of over 13% also provides good justification for upside to its 0.8x P/B.
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