In today’s briefing:
- ENEOS Bumps Tatsuta Elec (5809) Bid – 8.3% Bump Matches 8.7% Rise in BVPS Since Announcement
- Lonking (3339 HK): Setting the Stage for Better Profitability
- Sanil Electric IPO Trading – Strong Institutional Demand, Highest Subscription Rate This Year
- United Parcel Service (UPS): Strategic Pricing Revisions & Dynamic Revenue Management As Critical Growth Catalysts! – Major Drivers
- Lockheed Martin Corporation: Can Its Expansion of Missile and Fire Control (MFC) Capabilities Be A Game Changer? – Major Drivers
- PACCAR Inc.: How Has Its Market Share and Pricing Strategy Evolved? – Major Drivers
ENEOS Bumps Tatsuta Elec (5809) Bid – 8.3% Bump Matches 8.7% Rise in BVPS Since Announcement
- Several weeks ago, ENEOS Holdings (5020 JP) launched its long-delayed Tender Offer for Tatsuta Electric Wire & Cable (5809 JP) with no bump despite the time value of money.
- It said the price reflected Tatsuta’s value sufficiently. A week ago on the 19th, ENEOS extended the Tender Offer, likely because they didn’t have the shares. Price was still “sufficient.”
- I suggested it might not be; I didn’t expect a big bump, but caveated earnings. Friday produced great Q1 earnings, and a bump from ¥720/share to ¥780/share.
Lonking (3339 HK): Setting the Stage for Better Profitability
- Lonking Holdings (3339 HK)‘s positive profit alert for 33-50% YoY increase in 1H24 earnings suggests that market consensus of just 10% full-year growth is way too conservative.
- Industry sales momentum for excavators and wheel loaders has accelerated in the last three months. A low base in 2H24 will mean an even stronger recovery.
- Government supportive measures for equipment renewal and faster special purpose bond issuance will fuel demand too. We estimate net cash equals 90% of the share price.
Sanil Electric IPO Trading – Strong Institutional Demand, Highest Subscription Rate This Year
- Sanil Electric (062040 KS) raised around US$193m in its Korea IPO, after pricing the deal above the top end of the range at KRW35,000/share.
- Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
- In this note, we will talk about the demand for the deal and other trading dynamics.
United Parcel Service (UPS): Strategic Pricing Revisions & Dynamic Revenue Management As Critical Growth Catalysts! – Major Drivers
- United Parcel Service, Inc. (UPS) returned to volume growth in the U.S. market in the second quarter of 2024, marking a significant shift following nine quarters of decline.
- This achievement was largely a result of the company’s strategic efforts, including its emphasis on small and medium sized business (SMB) sectors and strategic acquisitions like Estafeta, which bolstered its position in Mexico.
- This move is expected to enhance UPS’s logistics orchestration capabilities, particularly as regional manufacturing shifts closer to the United States.
Lockheed Martin Corporation: Can Its Expansion of Missile and Fire Control (MFC) Capabilities Be A Game Changer? – Major Drivers
- Lockheed Martin’s performance in the second quarter of 2024 showcases a confident trajectory marked by significant operational and financial strides.
- The company reported a robust backlog valued at approximately $160 billion, more than twice its annual revenue, indicating sustained demand and potential future earnings stability.
- Revenue growth saw a 9% year-over-year increase across all four business segments, driven by enhanced operational performances and an improving supply chain.
PACCAR Inc.: How Has Its Market Share and Pricing Strategy Evolved? – Major Drivers
- PACCAR Inc. reported robust financial results for the second quarter of 2024, demonstrating strong performance across its various segments, despite mixed market conditions.
- The company recorded revenues of $8.8 billion and net income of $1.12 billion, driven by commendable performance in both truck and parts operations worldwide.
- PACCAR Parts notable revenue increase to $1.7 billion and pretax profits of $414 million highlight its resilience and operational efficiency, achieving a 30.3% gross margin.
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