Daily Brief Industrials: KFM Kingdom, Zhejiang Changsheng Sliding, Reliance Worldwide Corp, DTS, Ningbo Sunny Smart Autotech, Rocket Lab USA , Uber Technologies , Nexans SA, T3 Defense, Tokai Holdings and more

• Last week, Lotus Horizon (6063 HK) followed in fellow-contractors WK Group (2535 HK) and Superland Group Holdings (368 HK)‘s footsteps, whereby the controlling family exited, triggering an unconditional (massive) takeunder. 
• Now contractor KFM Kingdom (3816 HK) is suspended pursuant to the Hong Kong Code on Takeovers and Mergers. Its share price is up ~700% since January.
• Controlling shareholders exiting given protracted headwinds for Hong Kong’s private residential and commercial property markets makes sense. Less clear are these irrational price movements before a deal is struck.

• ChiNext and ChiNext 50, respectively, represent the top 100 and top 50 A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• We expect 7 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the December 2026 index rebal event.
• The ChiNext and ChiNext 50 index rebal events could trigger US$417mn and US$263mn in one-way flows respectively.

• Back on the 18th August 2026, Reliance Worldwide Corp (RWC AU) entered into a process deed with Brookfield, potentially leading to a A$4.75/share Offer by way of a Scheme.
• Brookfield was granted four weeks of additional exclusive due diligence to “progress the proposal“. That exclusivity expires today.
• Should Brookfield firm terms, Reliance is permitted to “go shop” for 30 days. After AustralianSuper bumped its holding, twice, post-deal-announcement, a higher price may be warranted.

• DTS is getting ready to complete its IPO in October 2026 in KOSDAQ. DTS designs and manufactures air-cooled heat exchangers used in power generation, LNG, and petrochemical plants.
• The IPO price range is from 17,000 won to 18,500 won per share. Based on this range, the expected market capitalization ranges from 252.6 billion to 274.9 billion won.
• DTS is a subsidiary of Dasan Networks (039560 KS). Dasan Networks’ 32% stake in DTS (post IPO) represents 84% of Dasan Networks’ market cap. 

• Sunny Smart Autotech, an automotive optical products supplier, has filed its prospectus with the HKEX. CICC and CITIC are the joint sponsors.
• We look at the company’s core segments: sensing products and cabin products.
• We then look at the company’s financial profile, gross margin decline, pre-IPO valuation and investor backing.

• Rocket Lab has become one of the more unusual stories in the booming commercial space market.
• Its shares fell roughly 46% over three months following the enthusiasm and subsequent selloff around SpaceX’s June IPO, even though Rocket Lab’s operating performance continued to improve.
• Second-quarter revenue reached a record $234 million, up 62% year over year, while the company ended the period with $2.36 billion in backlog and continued signing major government and commercial contracts.

• Uber CEO Dara Khosrowshahi has sent investors an unusually direct signal at a time when Wall Street is debating whether autonomous vehicles could eventually undermine the ride-hailing giant.
• Khosrowshahi recently purchased 141,000 Uber shares at an average price of $70.96, investing roughly $10 million of his own money in his first open-market purchase since May 2022.
• The transaction followed another sizeable insider purchase by COO Andrew Macdonald, who bought roughly $5.3 million of stock days earlier.

• Strategic Pure-Play Pivot: Nexans SA (NEX FP) has successfully executed a multi-year portfolio transformation toward pure-play electrification, refocusing capital allocation from commoditized volume-driven legacy cables toward high-margin, high-voltage subsea/underground transmission and smart grid distribution infrastructure.
• Attractive Valuation Arbitrage: Nexans trades at an enterprise valuation discount across key operational multiples (0.9x EV/Sales, 10.8x EV/EBITDA, and 2.9x P/B) relative to peer averages (Furukawa Electric, Hubbell, Fujikura at 2.3x-6.2x EV/Sales and 19.3x-29.3x EV/EBITDA), presenting institutional investors with substantial re-rating potential underpinned by secular grid modernization tailwinds.
• Robust Cash Generation & Capital Return: Despite bottom-line variability driven by transformation and restructuring expenses, free cash flow has compounded rapidly, rising from €264.0M in 2023 to €385.0M in 2025, enabling a sustained dividend progression from €0.70 per share in 2021 to €2.90 per share in 2026 (13.0% 1-year CAGR and 29.4% 3-year CAGR).

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• T3 Defense (NASDAQ: DFNS) is a global defense and aerospace holding company with a strong portfolio of growth oriented operating businesses.
• Portfolio companies cover areas such as energy systems, drones, rugged infrastructure, production engineering and motion control technologies.
• The company also has an acquisition pipeline of over 400 high quality targets that could add substantial value.

Key points (machine generated)

• TOKAI Holdings is experiencing revenue growth due to increased customer numbers and strong cloud services performance.
• The company is on track for record-high results for the fiscal year ending March 2027, with Q1 consolidated sales of 59,993 million yen, a 3.2% increase from last year.
• With approximately 3.47 million customers and a strong sales force, TOKAI is well-positioned for continued growth.

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