Industrials: Japan Post Holdings, China High Speed Transmission Equip Grp, Dragon Crown Group, TCI Express Ltd, Cahya Mata Sarawak and more

• We have articulated why we believe Japan Post Bank and Japan Post Insurance could have 100%+ upside.
• We further believe that Japan Post Holdings also offers very significant upside potential.
• His comes not just from its subsidiaries’ performance but also improvements in post office profitability and shrinking of the holdco discount.

• Sold off in the market rout as it is a small-cap stock although growth potential is intact. 
• Margin decreased but revenue increased followed by lower expenses to sales ratio. 
• China High Speed Transmission Equip Grp (658 HK) build-up in inventories and increase in the account receivables reflect management’s confidence and action to prepare for a higher revenue growth.

• The Composite Document detailing the Conditional Voluntary General Offer for liquid chemical storage and handling outfit Dragon Crown Group (935 HK) (DCG) is now out.
• The Offer Price is HK$1.28/share. The Offer is conditional on 90% acceptance, with 86.91% in the bag.
• This will probably turn unconditional next week. Trading tight to term. 

• We reiterate our Buy rating with a revised TP of INR2,130, implying a potential upside of 25%. 
• TCIE is a well-established player in the Express Logistics segment, with a pan India presence and catering to 95% of pin codes.
• With a lease-based model for most of its required assets, TCIE enjoys greater operational flexibilities and generates a better return on assets

• Traditional core businesses to benefit
• Strategic investments to ‘fire up’
• ESG framework details in 2Q22

Management is optimistic, expecting CMS’ traditional core businesses to benefit from higher development activities in Sarawak while its strategic investments — MPAS and OMS — would ‘fire up’ in 2022. We make no change to our earnings forecasts and TP. Trading at 5.9x FY22E PER, 0.4x P/B and 0.4x our e.RNAV, the stock is deeply discounted. Our TP, based on 0.7x RNAV, implies 10x FY22E PER vs. LT mean of 14x.