Daily Brief Industrials: Sekisui Jushi, Ecopro BM , NARI Technology Co Ltd A, Singapore Post, 3M Co, General Dynamics, XP Power Ltd, Old Dominion Freight Line, Otis Worldwide , Trimas Corp and more

• In April, Sekisui Jushi (4212 JP) announced lackluster earnings and unsurprising guidance after a year marked by higher costs. It also announced a small (2.5%) buyback, likely for cross-holdings.
• Yesterday, the company announced Q1 results, and a revision to their buyback programme (to buy 20.2% of shares out). This morning their 22+% (#1) shareholder Sekisui Chemical sold 18%. 
• Forward PER dropped nearly 20%. The stock is still outrageously cash/securities-rich and if “re-levered” to zero net leverage would get a high 20s ROE. Hmmm…

• Ecopro BM (247540 KS) and Kum Yang (001570 KS)’s shares are down 2.5% and 4.5%, respectively today, driven by news of insiders at these companies selling their shares.
• It is estimated that the total amount of Ecopro BM shares sold by insiders and related parties was about 20 billion won in July by more than 12 insiders/related parties.
• We are increasingly concerned about insiders selling at Ecopro BM and Kum Yang. Coupled with lofty valuations, we think there is a higher probability of downside risk on these names. 

• As of 1 August, there could be two changes for the iShares A50 China (2823 HK)/ CSOP A50 (2822 HK) in September.
• There should be over 1x ADV to buy on NARI Technology Co Ltd A (600406 CH) and over 1x ADV to sell on Shaanxi Coal Industry (601225 CH). 
• There are a few stocks bunched around similar market caps among the potential adds and there could be changes to the list over the next few weeks.

• 3M Company delivered a strong result and managed an all-around beat in the last quarter.
• Their cost management efforts and restructuring initiatives primarily drove these margin increases.
• We give 3M Company a ‘Hold’ rating with a revised target price.

• General Dynamics delivered a positive result and managed an all-around beat in the last quarter.
• General Dynamics had a revenue increase across Defense segments and a modest increase in Aerospace.
• The revenue increase came from international vehicle programs at European Land Systems and Land Systems.

XP Power reported year-on-year revenue growth of 30% in H123 as it made good progress shipping from its elevated backlog. As expected, orders declined year-on-year, but the c £250m backlog still provides at least nine months’ revenue visibility. The company continues to invest for the longer term in Malaysia (manufacturing) and the United States (R&D). With no change to management’s full year expectations, we maintain our normalised operating profit forecasts for FY23 and FY24 and nudge up our interest cost forecast for FY23.

• Old Dominion Freight Line Inc. delivered a mixed set of results for this quarter with revenues below the analyst consensus.
• Considering the operating challenges that are associated with the domestic economy’s continued softness, and decreased volumes, the financial results were solid.
• We give Old Dominion Freight Line an ‘Underperform’ rating with a revised target price.

• Otis Worldwide managed to surpass the revenue and earnings expectations of Wall Street.
• Otis also achieved significant milestones in innovation, launching the Gen3 Core elevator and securing major projects globally.
• Looking ahead, Otis’ management has raised its 2023 outlook, and with the launch of the UpLift program, the company aims to drive efficiency and sustainable growth for the future.

• TRS continues to grow in its two smaller business segments while the packaging segment continues to experience a moderated recovery
• Predominantly consumer staples. Inventory management has been the main culprit for the packaging segment not recovering as fast as expected
• We believe the softness in packaging has created an investment opportunity in TRS’s stock as the Company streamlines its operations