In today’s briefing:
- Toyo Construction – YFO Standstill Against TC Hostility
- Lonking (3339 HK): Not Out of the Woods Yet
- MonotaRO (3064): Positive Impression on May Sales
- Siemens – Robust Topline Growth
- V-Guard Industries – Expects ECD Segment Margin to Improve Gradually
Toyo Construction – YFO Standstill Against TC Hostility
- Three weeks ago, Yamauchi No 10 Family Office (YFO) announced its intentions to launch a Tender Offer by end-June. Toyo Construction (1890 JP) got upset and called YFO names.
- TC announced a Poison Pill, they talked, TC accused YFO in the AGM Convocation of “extreme dishonesty.” They have since met again, and finally signed a long standstill agreement.
- But the Poison Pill will be put to shareholders (ISS recommends against), and shareholders have to decide from the public documents whether they believe Toyo Construction.
Lonking (3339 HK): Not Out of the Woods Yet
- Share price of Lonking Holdings (3339 HK) has seen muted reaction to weak industry figures recently but it is still unexciting in near-term, based on our catch-up with the company.
- It has underperformed industry sales volume in 5M22 across all product categories, with that for wheel loader behind 4pp and excavator by 10pp. Forklift sales were down 18% YoY.
- Both gross margin and investment income are set to contract in this year, making it highly likely to see significant earnings downgrade after 1H22 result announcement in Aug.
MonotaRO (3064): Positive Impression on May Sales
- Parent company sales in May were 16.401bn yen (+20.9% YoY), above the company’s monthly target
- The number of business days was 19, one day more than in May 2021. The sales growth rate per business day was +14.5% YoY (+23.4% for April)
- The negative impact of the Shanghai lockdown appears to be limited so far.
Siemens – Robust Topline Growth
- Q2FY22 highlights: Revenue: INR 36.3bn (+8.2%/+12% YoY/QoQ, 8.3% miss) driven largely by the digital industries (DI), energy (SE), mobility (MO) and smart infra (SI).
- All segments other than mobility recorded sequential growth with SE/ SI/DI/portfolio companies/others recording sequential growth of 9.8%/21%/- 10%/11%/18%80% respectively.
- EBITDA: INR 4.5bn (+0.9%/+34.2% YoY/QoQ, 0.6% miss). EBITDA margin: 12.3%(-88/+203bps YoY/QoQ) vs. estimate of 11.3%.
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V-Guard Industries – Expects ECD Segment Margin to Improve Gradually
- The management highlighted that VIL has a strong brand equity, vast established distribution and good brand recall in South India.
- VIL also uses South markets for incubating new categories.
- It highlighted that it is working on expanding distribution and improving brand awareness in the Non-South region
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