Smartkarma Daily Briefs

• After the recent rally, Ebara Corp (6361 JP)‘s increased market cap and free float market cap should result in inclusion in a global index in November.
• Ebara Corp (6361 JP) has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics.
• There has been a large increase in cumulative excess volume for Ebara Corp (6361 JP) since July and we do not see a similar increase in its peers.

• Chinese government’s efforts to ban Hanwha Ocean’s five U.S. subsidiaries from conducting any transactions with organizations or individuals in China is likely to have material Negative impact on Hanwha Ocean.
• If Hanwha’s U.S. subsidiaries are banned from Chinese suppliers, they’ll need to source alternatives (Japan, Europe, or domestic U.S. firms), that could involve 20–50% higher costs with longer lead times.
• Basically, what’s going on is that the Chinese government wants to slow down the United States’ efforts to rebuild its shipbuilding sector with the help of Korean shipbuilders.

• Sany Heavy Industry (600031 CH), the world’s third-largest construction machinery company, has filed its PHIP for an H Share listing to raise US$1.0-1.5 billion.     
• SANY has six operating segments. The largest segment, as measured by revenue and gross profit, is excavating machinery.
• The fundamentals are good, with strong growth, an increasing overseas mix, an improving margin profile, strong cash generation, and a solid balance sheet. 

• Asian Terminals Inc. (ATI) is a key port operator in the Philippines with a strong competitive position, managing strategic assets like the Manila South Harbor and the Port of Batangas under long-term concessions.
• The company demonstrates robust financial health, characterized by strong revenue and profit growth, a consistent dividend payout, and a net cash position. Growth is propelled by tariff adjustments and increasing container volumes.
• Future growth is underpinned by strategic capacity expansions and favorable macroeconomic tailwinds, including the Philippines’ positive demographic profile and potential shifts in regional manufacturing. However, the company faces long-term risks from concession renewals and rising competition.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Elecon Engineering announced a INR 400 crore CapEx plan in its Gear division, signaling aggressive expansion and confidence in long-term industrial and defence demand.
• The investment strengthens Elecon’s position as India’s only defence-grade gearbox manufacturer while unlocking efficiency gains and higher capacity for its global export ambitions.
• The CapEx-driven scale-up and MHE turnaround improve Elecon’s visibility as a structural growth play, transitioning it from a domestic leader to a global engineering contender.

• Turnaround Story with Diversified Operations: Protasco has successfully pivoted from a net loss in 2022 to profitability, driven by its core Maintenance and Construction segments. The company’s diversified business model, which also includes engineering, property development, and education, provides multiple revenue streams, though with varying degrees of success.
• Favorable Industry Tailwinds: The Malaysian construction sector is experiencing robust growth, projected to expand significantly in 2025, fueled by government infrastructure spending, private investment, and foreign direct investment. This provides a strong demand backdrop for Protasco’s primary services.
• Valuation Appears Attractive but Risks Remain: The company trades at low valuation multiples (P/E of 6.8x, P/B of 0.5x), suggesting a potential value opportunity. However, a history of corporate governance issues, inconsistent profitability, and a zero-dividend policy warrant a cautious approach from investors.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing.
• Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost & Sullivan.
• We have looked at the company’s past performance in our earlier note. In this note, we talk about the updates and likely A/H premium.

• CQME is a diversified industrial conglomerate with a broad product portfolio, including power equipment, automotive parts, and general machinery, positioning it to benefit from China’s industrial upgrading.
• The company exhibits strong value and dividend characteristics, with a low price-to-book ratio and a history of attractive shareholder payouts, supported by robust recent growth in net income and free cash flow.
• Despite recent positive performance, the company faces headwinds from declining gross and EBITDA margins, historical earnings volatility, and high competitive intensity within China’s machinery sector.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Key points (machine generated)

• LSI Industries, led by CEO Jim Clark, specializes in non-residential lighting and display solutions and has transformed significantly since 2018.
• The company has achieved a 7-year internal rate of return (IRR) of 22% by deepening client relationships and pursuing strategic acquisitions.
• LSI is the only scaled player in its sector offering both lighting and display solutions, positioning it for projected 3-year IRRs of 17%-20% from its current price of $17.50.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• In a strong strategic move, Norcros has announced the completion of the Fibo Holding AS acquisition first announced in July.
• It enhances the company’s existing stable of brands in a higher growth segment and brings group exposure to adjacent markets, most notably Scandinavia.
• On our estimates, the deal enhances earnings by 13-14% in a full year, along with new market opportunities for existing operations.

• After the recent rally, Ebara Corp (6361 JP)‘s increased market cap and free float market cap should result in inclusion in a global index in November.
• Ebara Corp (6361 JP) has underperformed its larger peers, and the stock is trading cheaper than the average of its peers on most metrics.
• There has been a large increase in cumulative excess volume for Ebara Corp (6361 JP) since July and we do not see a similar increase in its peers.

• Chinese government’s efforts to ban Hanwha Ocean’s five U.S. subsidiaries from conducting any transactions with organizations or individuals in China is likely to have material Negative impact on Hanwha Ocean.
• If Hanwha’s U.S. subsidiaries are banned from Chinese suppliers, they’ll need to source alternatives (Japan, Europe, or domestic U.S. firms), that could involve 20–50% higher costs with longer lead times.
• Basically, what’s going on is that the Chinese government wants to slow down the United States’ efforts to rebuild its shipbuilding sector with the help of Korean shipbuilders.

• Sany Heavy Industry (600031 CH), the world’s third-largest construction machinery company, has filed its PHIP for an H Share listing to raise US$1.0-1.5 billion.     
• SANY has six operating segments. The largest segment, as measured by revenue and gross profit, is excavating machinery.
• The fundamentals are good, with strong growth, an increasing overseas mix, an improving margin profile, strong cash generation, and a solid balance sheet. 

• Asian Terminals Inc. (ATI) is a key port operator in the Philippines with a strong competitive position, managing strategic assets like the Manila South Harbor and the Port of Batangas under long-term concessions.
• The company demonstrates robust financial health, characterized by strong revenue and profit growth, a consistent dividend payout, and a net cash position. Growth is propelled by tariff adjustments and increasing container volumes.
• Future growth is underpinned by strategic capacity expansions and favorable macroeconomic tailwinds, including the Philippines’ positive demographic profile and potential shifts in regional manufacturing. However, the company faces long-term risks from concession renewals and rising competition.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Elecon Engineering announced a INR 400 crore CapEx plan in its Gear division, signaling aggressive expansion and confidence in long-term industrial and defence demand.
• The investment strengthens Elecon’s position as India’s only defence-grade gearbox manufacturer while unlocking efficiency gains and higher capacity for its global export ambitions.
• The CapEx-driven scale-up and MHE turnaround improve Elecon’s visibility as a structural growth play, transitioning it from a domestic leader to a global engineering contender.

• Turnaround Story with Diversified Operations: Protasco has successfully pivoted from a net loss in 2022 to profitability, driven by its core Maintenance and Construction segments. The company’s diversified business model, which also includes engineering, property development, and education, provides multiple revenue streams, though with varying degrees of success.
• Favorable Industry Tailwinds: The Malaysian construction sector is experiencing robust growth, projected to expand significantly in 2025, fueled by government infrastructure spending, private investment, and foreign direct investment. This provides a strong demand backdrop for Protasco’s primary services.
• Valuation Appears Attractive but Risks Remain: The company trades at low valuation multiples (P/E of 6.8x, P/B of 0.5x), suggesting a potential value opportunity. However, a history of corporate governance issues, inconsistent profitability, and a zero-dividend policy warrant a cautious approach from investors.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Sany Heavy Industry (600031 CH), aims to raise around US$1.5bn in its H-share listing.
• Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost & Sullivan.
• We have looked at the company’s past performance in our earlier note. In this note, we talk about the updates and likely A/H premium.

• CQME is a diversified industrial conglomerate with a broad product portfolio, including power equipment, automotive parts, and general machinery, positioning it to benefit from China’s industrial upgrading.
• The company exhibits strong value and dividend characteristics, with a low price-to-book ratio and a history of attractive shareholder payouts, supported by robust recent growth in net income and free cash flow.
• Despite recent positive performance, the company faces headwinds from declining gross and EBITDA margins, historical earnings volatility, and high competitive intensity within China’s machinery sector.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Key points (machine generated)

• LSI Industries, led by CEO Jim Clark, specializes in non-residential lighting and display solutions and has transformed significantly since 2018.
• The company has achieved a 7-year internal rate of return (IRR) of 22% by deepening client relationships and pursuing strategic acquisitions.
• LSI is the only scaled player in its sector offering both lighting and display solutions, positioning it for projected 3-year IRRs of 17%-20% from its current price of $17.50.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• In a strong strategic move, Norcros has announced the completion of the Fibo Holding AS acquisition first announced in July.
• It enhances the company’s existing stable of brands in a higher growth segment and brings group exposure to adjacent markets, most notably Scandinavia.
• On our estimates, the deal enhances earnings by 13-14% in a full year, along with new market opportunities for existing operations.