Industrials

• Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
• CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
• We have looked at the company’s past performance in our earlier notes. In this note, we talk about its recent updates and provide our thoughts on valuations.

• Murakami-Led funds have quietly amassed a 26.97% stake in Sumi Mitsui Construction while also acquiring a 5.01% stake in its subsidiary, Sumiken.
• With the Tokyo Stock Exchange clamping down on parent-child listings, Sumiken’s future as a public company looks increasingly uncertain, raising buyout speculation.
• City Index’s small stake in Sumiken may serve as a defensive move to block rival bids, reinforcing its influence over SMC’s long-term strategy.

• Copa Holdings delivered a mixed yet robust performance in the fourth quarter and full year of 2024, illustrating its resilience and operational efficiency in a fluctuating market.
• Positively, the company reported an operating margin of 21.9% for the year, which reflects consistent execution of its business model focused on cost efficiency and operational excellence.
• An increase in capacity by 8.6% year-over-year was aligned with previous guidance.

• Schneider National Inc. recently reported its fourth-quarter and full-year 2024 earnings, providing a comprehensive overview of its current performance and strategic direction.
• The results highlight various positive developments as well as some areas of concern, offering a nuanced picture of the company’s financial health and future potential.
• Positives from the results include a strategic acquisition and a targeted focus on market opportunities.

• Leonardo DRS recently announced its fourth-quarter and fiscal year 2024 results showcasing substantial achievements and strategic initiatives, while also highlighting certain challenges to consider for investors.
• The company reported record bookings with a 1.3x book-to-bill ratio, both for the fourth quarter and for the entire year, while achieving mid-teens organic revenue growth and a 14% revenue increase year-over-year.
• Further supporting their performance, Leonardo DRS demonstrated a solid growth in adjusted EBITDA by 23% year-over year, with a notable 90 basis points margin expansion.

• Chart Industries, Inc.’s fourth-quarter and full-year 2024 performance illustrates a year of significant achievements and notable challenges, projecting a complex investment landscape.
• The company reported robust financial results with a record high in several key metrics, highlighting its strategic operational execution and market responsiveness.
• Positively, Chart Industries demonstrated strong financial performance in 2024.

• Casella Waste Systems, Inc. has reported robust financial results for the fourth quarter and full year 2024.
• The company demonstrated significant growth across various key metrics, closing the year on a positive note.
• Throughout 2024, Casella Waste Systems executed on strategic acquisitions, expanded its revenue base, and fortified its operational efficiencies.

• KULR Technology Group, Inc. develops and commercializes high-performance thermal management technologies for electronics, batteries, and other components across a range of applications.
• Currently, it is focused on high performance aerospace and Department of Defense applications, such as space exploration, satellite communications, and underwater vehicles, and applying them to mass market commercial applications, such as lithium-ion battery energy storage, electric vehicles, 5G, cloud computer infrastructure, consumer and industrial devices.
• It is also applying its zero-vibration technology to fans in commercial markets which has already resulted in licensing agreements.

• The earnings report from SPX Technologies showed a mix of positive and cautionary elements, indicating a firm trajectory in several areas along with challenges that may affect future performance.
• On the positive side, SPX Technologies demonstrated a strong finish to 2024, marked by a significant increase in adjusted EBITDA by 36% and adjusted EPS reaching the higher end of the guidance range.
• The company also achieved robust operational performance, highlighted by a 13.7% revenue growth with contributions from both its HVAC and Detection & Measurement segments.

• Federal Signal Corporation reported strong financial results for the fourth quarter and full year of 2024.
• The company achieved record-high net sales of approximately $1.86 billion for the year, an 8% increase over the previous year.
• Operating income grew by 25% to $281.4 million, and adjusted EBITDA rose by 23% to $350.6 million, translating to a margin of 18.8%.

• Kcc Corp (002380 KS) is considering on issuing an overseas exchangeable bond (EB) for its 10% stake in Samsung C&T (028260 KS).
• KCC is the second largest shareholder of Samsung C&T with a 10% stake in the company which is worth 2 trillion won (US$1.4 billion).
• Our NAV valuation of KCC Corp suggests NAV per share of 332,947 won, which is 27% higher than current price.

• In this Insight, we aim to understand the current demand, environment, competition, and margin trends for major air conditioner manufacturers in India.
• Dealers remain optimistic despite a slower seasonal start, anticipating accelerated growth in this season. While there have been price increases, competition, and cost inflation may not translate into margins. 
• Some of the companies in Focus include Voltas Ltd (VOLT IN), Havells India (HAVL IN), Johnson Controls-Hitachi Air Conditioning India (JCHAC IN).

• ST Engineering led STI with a 46% rally, 12M Consensus Estimate Target Price rose 36% to S$6.85.
• Net creation of S$36M in units increased combined AUM of two STI tracking ETFs from S$2.3B to S$2.6B.
• STI stocks booked S$1.63 billion net institutional outflow in 1Q25, mainly from STI Banks and S-REIT Sector.

• Kcc Corp (002380 KS) is considering on issuing an overseas exchangeable bond (EB) for its 10% stake in Samsung C&T (028260 KS).
• KCC is the second largest shareholder of Samsung C&T with a 10% stake in the company which is worth 2 trillion won (US$1.4 billion).
• Our NAV valuation of KCC Corp suggests NAV per share of 332,947 won, which is 27% higher than current price.

• In this Insight, we aim to understand the current demand, environment, competition, and margin trends for major air conditioner manufacturers in India.
• Dealers remain optimistic despite a slower seasonal start, anticipating accelerated growth in this season. While there have been price increases, competition, and cost inflation may not translate into margins. 
• Some of the companies in Focus include Voltas Ltd (VOLT IN), Havells India (HAVL IN), Johnson Controls-Hitachi Air Conditioning India (JCHAC IN).

• ST Engineering led STI with a 46% rally, 12M Consensus Estimate Target Price rose 36% to S$6.85.
• Net creation of S$36M in units increased combined AUM of two STI tracking ETFs from S$2.3B to S$2.6B.
• STI stocks booked S$1.63 billion net institutional outflow in 1Q25, mainly from STI Banks and S-REIT Sector.

• Hanwha Group Chairman Kim Seung-youn (born in 1952) made a major move to give 11.32% of his shares in Hanwha Corporation (000880 KS) to his three sons.
• It is estimated that the three sons will need to pay nearly 222 billion won in inheritance taxes associated with receiving additional stakes in Hanwha Corp.
• Because the three sons need to pay for the high amounts of inheritance taxes, Hanwha Corp is likely to raise the dividend payout in the next several years.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2025.
• Among the 38 holdcos/opcos, there have been several pairs that have resulted in significant price ratio divergence which could provide trading opportunities in terms of their pricing gaps closing reversal.
• Given the resumption in short selling in Korea, there is going to be a lot more interest in pair trades in Korea, especially among the major Korean holdcos/opcos. 

• Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.
• That’s decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).
• Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. 

• MasTec Inc. has reported strong financial results for the fourth quarter and full year 2024.
• The company’s performance exceeded expectations across several key metrics, including revenue, adjusted EBITDA, and earnings per share (EPS).
• For the fourth quarter, MasTec achieved a revenue of $3.4 billion with an adjusted EBITDA of $271 million, marking a 20% year-over-year increase.

• Dongfang Electric (1072 HK)‘s 1Q25 express report suggested earnings may increase 15-25% YoY, reversing the YoY decline in 4Q24 and FY24. This is encouraging. 
• Its signs record new orders in FY24, fuelling its order backlog to Rmb152.6bn, which equals 2x the FY25F revenue. 2H24 new order momentum is better than 1H24.
• The pending A-share placement, while diluting EPS, will enhance book value for the H-share holders. Its 6.4x PER and 7.3% dividend yield are inexpensive.

• AAON, Inc.’s recent earnings for the fourth quarter of 2024 provided investors with a detailed overview of the company’s financial performance, strategic initiatives, and outlook.
• The company, which boasts a strong position in the heating and cooling industry, highlighted both its achievements and challenges during the year.
• On the positive side, AAON reported a substantial increase in bookings and backlog, signaling strong future demand.

• In this edition: • KPN | Liberty Global hints on acquiring optical fibre network in the Netherlands • Arcadis | awarded major rail project contract in the UK

• Stantec Inc.’s latest financial results highlight a year of robust growth and strategic strength, marked by impressive revenue increases and solid performance across its key geographies.
• For the full year 2024, Stantec reported record net revenues of $5.9 billion, constituting a 15.8% growth compared to the previous year.
• This comprised 7.4% organic growth and 7.5% acquisition growth, underscoring the company’s effective strategy in combining steady organic development with strategic acquisitions.

• ESAB demonstrated a robust financial performance in the fourth quarter of 2024, concluding a year of sustained execution and strategic growth initiatives.
• The company achieved record fourth-quarter profits and adjusted EBITDA margins, which expanded by 90 basis points to reach 20.3%.
• Despite flat organic growth, the margins underscore ESAB’s commitment to the EBX continuous improvement system, which facilitated operational enhancements and cost efficiencies.

• The Middleby Corporation has recently reported on various strategic changes and an earnings summary for the fourth quarter of 2024.
• The company announced its decision to spin off its Food Processing business to form a separate publicly traded entity, aiming to create two distinct companies: Middleby Corporation focusing on commercial and residential kitchen equipment, and Middleby Food Processing.
• This move is expected to allow each business to sharpen its strategic and operational focus, optimize capital structure, and align more strategically with its respective market opportunities.

• Hanwha Group Chairman Kim Seung-youn (born in 1952) made a major move to give 11.32% of his shares in Hanwha Corporation (000880 KS) to his three sons.
• It is estimated that the three sons will need to pay nearly 222 billion won in inheritance taxes associated with receiving additional stakes in Hanwha Corp.
• Because the three sons need to pay for the high amounts of inheritance taxes, Hanwha Corp is likely to raise the dividend payout in the next several years.

• In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 2Q 2025.
• Among the 38 holdcos/opcos, there have been several pairs that have resulted in significant price ratio divergence which could provide trading opportunities in terms of their pricing gaps closing reversal.
• Given the resumption in short selling in Korea, there is going to be a lot more interest in pair trades in Korea, especially among the major Korean holdcos/opcos. 

• Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. This week was +HK$37bn.
• That’s decent net buying still. Keeping that pace would mean a new record. It IS possible this excess flow is state-managed (or state-insisted as insurers up equity investment ratios).
• Included is a summary of important China Stocks-relevant news as I saw it this week, but tariffs, retaliation, US growth prospects, etc will all matter more. 

• MasTec Inc. has reported strong financial results for the fourth quarter and full year 2024.
• The company’s performance exceeded expectations across several key metrics, including revenue, adjusted EBITDA, and earnings per share (EPS).
• For the fourth quarter, MasTec achieved a revenue of $3.4 billion with an adjusted EBITDA of $271 million, marking a 20% year-over-year increase.

• Dongfang Electric (1072 HK)‘s 1Q25 express report suggested earnings may increase 15-25% YoY, reversing the YoY decline in 4Q24 and FY24. This is encouraging. 
• Its signs record new orders in FY24, fuelling its order backlog to Rmb152.6bn, which equals 2x the FY25F revenue. 2H24 new order momentum is better than 1H24.
• The pending A-share placement, while diluting EPS, will enhance book value for the H-share holders. Its 6.4x PER and 7.3% dividend yield are inexpensive.

• AAON, Inc.’s recent earnings for the fourth quarter of 2024 provided investors with a detailed overview of the company’s financial performance, strategic initiatives, and outlook.
• The company, which boasts a strong position in the heating and cooling industry, highlighted both its achievements and challenges during the year.
• On the positive side, AAON reported a substantial increase in bookings and backlog, signaling strong future demand.

• In this edition: • KPN | Liberty Global hints on acquiring optical fibre network in the Netherlands • Arcadis | awarded major rail project contract in the UK

• Stantec Inc.’s latest financial results highlight a year of robust growth and strategic strength, marked by impressive revenue increases and solid performance across its key geographies.
• For the full year 2024, Stantec reported record net revenues of $5.9 billion, constituting a 15.8% growth compared to the previous year.
• This comprised 7.4% organic growth and 7.5% acquisition growth, underscoring the company’s effective strategy in combining steady organic development with strategic acquisitions.

• ESAB demonstrated a robust financial performance in the fourth quarter of 2024, concluding a year of sustained execution and strategic growth initiatives.
• The company achieved record fourth-quarter profits and adjusted EBITDA margins, which expanded by 90 basis points to reach 20.3%.
• Despite flat organic growth, the margins underscore ESAB’s commitment to the EBX continuous improvement system, which facilitated operational enhancements and cost efficiencies.

• The Middleby Corporation has recently reported on various strategic changes and an earnings summary for the fourth quarter of 2024.
• The company announced its decision to spin off its Food Processing business to form a separate publicly traded entity, aiming to create two distinct companies: Middleby Corporation focusing on commercial and residential kitchen equipment, and Middleby Food Processing.
• This move is expected to allow each business to sharpen its strategic and operational focus, optimize capital structure, and align more strategically with its respective market opportunities.

• The Nikkei 225 March 2025 rebalance is today. The ADD is  big, with more to buy later. The SELL is a really big sell in terms of float. 
• The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
• There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

• A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
• Implied vol held firm despite price swings, with the spread between 1M implied and historic vol continuing to widen.
• We suggest a tactical hedge given implied vol dynamics and uncertain political environment.

• The Nikkei 225 March 2025 rebalance is today. The ADD is  big, with more to buy later. The SELL is a really big sell in terms of float. 
• The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
• There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

• A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
• Implied vol held firm despite price swings, with the spread between 1M implied and historic vol continuing to widen.
• We suggest a tactical hedge given implied vol dynamics and uncertain political environment.

• Backed by DP World (DPW DU), Asian Terminals (ATI PM) is one of the largest owners and operators of ports and related infrastructure in the Philippines.
• We are impressed with the company’s excellent financials including consistent profit margins and free cash flow, strong market share, and execution of its business strategies.
• It also trades at cheap valuations with solid dividends and it has also been buying back shares. 

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
• The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
• Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-March 2025.

• Backed by DP World (DPW DU), Asian Terminals (ATI PM) is one of the largest owners and operators of ports and related infrastructure in the Philippines.
• We are impressed with the company’s excellent financials including consistent profit margins and free cash flow, strong market share, and execution of its business strategies.
• It also trades at cheap valuations with solid dividends and it has also been buying back shares. 

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
• The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
• Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-March 2025.

• Daihatsu Diesel Mfg (6023 JP) is down sharply today – much more than indices – as autos/tech fall on US auto tariffs. There may be some GPIF unwinds as well. 
• A reminder: Despite the name, Daihatsu Diesel is not an auto name, is growing, has a big order book, and minimal direct exposure to the US. 
• The Tender settles today. The 8% overhang from Tendered-But-Unsold Shares is an opportunity, not a burden, at 7.2x ex-cash PER.

• Ashok Leyland (AL IN) plans to shut manufacturing at its UK EV subsidiary, Switch Mobility UK, and shift focus to India and UAE plants.
• The UK exit curbs cash burn and earnings drag, while Switch India, driven by rising demand, nears breakeven with 1800+ e-Bus orders and 80%+ e-LCV share.
• This marks a value-accretive pivot, realigning capital to India’s high-growth EV market and improving group-level profitability and return metrics.

International Airlines Group (IAG) enjoys the tailwinds of structural demand growth in an industry that is becoming more structurally profitable, being well positioned in some of the largest and most attractive markets, and with a portfolio of leading brands catering to the value requirements of its customers. While IAG already has industry-leading profitability, management is transforming it by investing in network expansion, customer service and operational efficiency to drive sustainable revenue growth and increase free cash flow.

• GXO Logistics, Inc. recently announced its fourth-quarter and full-year 2024 earnings, highlighting a period marked by robust growth, strategic achievements, and ongoing challenges.
• The company reported record revenue and adjusted EBITDA for the year, with a 30% year-over-year increase in adjusted EBITDA for the fourth quarter alone.
• Full-year revenue reached $11.7 billion, reflecting a 20% growth from the previous year, with 3% coming from organic growth.

• A summary of InPost’s FY24 results against consensus estimates and last year’s full year is presented in the table below.
• InPost expects revenue to grow n the high-teens to low twenties range, and will surpass market volume growth in all our geographies, just like it did last year.
• Adjusted EBITDA is foreseen to increase in the low to mid-twenties. 

International Airlines Group (IAG) enjoys the tailwinds of structural demand growth in an industry that is becoming more structurally profitable, being well positioned in some of the largest and most attractive markets, and with a portfolio of leading brands catering to the value requirements of its customers. While IAG already has industry-leading profitability, management is transforming it by investing in network expansion, customer service and operational efficiency to drive sustainable revenue growth and increase free cash flow.

• MLKN posted 3QFY25 adjusted EPS of $0.44, $0.01 below our estimate and 3QFY24 on weaker-than-expected revenue offset by better margins.
• Total revenue came in $43 million lower than expected, with growth in Global Retail of 3.9% partially offsetting a decline in International Contract of 1.5% and modest growth in North America Contract of 1.7% on an organic basis.
• Given how leading indicators in North America Contract had been trending positive over the past several quarters, we expected stronger revenue growth in 3QFY25.

• Sunrun’s earnings for the fourth quarter and full year of 2024 presents a complex blend of progress and challenges, demonstrating the company’s navigational agility within a dynamic industry landscape.
• The company reported strong quarterly performance, implementing strategic measures to enhance its operational and financial standing while managing market uncertainties.
• The positives highlight Sunrun’s ability to adapt and innovate amid a rising interest rate environment and evolving state regulations.

• TriMas Corporation’s fourth-quarter and full-year 2024 results illustrate a company managing complexity across its diverse business segments while setting strategic groundwork for potential future improvements.
• The fourth quarter showed several positive trends in financial and operational metrics, with consolidated sales up by 8.8% year-over-year, largely driven by strong performances in its Packaging and Aerospace segments.
• In the Packaging segment, which accounts for 55% of total sales, TriMas achieved nearly 10% organic growth, particularly propelled by the beauty and personal care categories.

• Core & Main reported strong financial performance for the fiscal year 2024, marked by significant sales growth and strategic changes in the executive leadership team.
• Sales increased by 18% in the fourth quarter, supported by a 9% contribution from acquisitions, and organic growth in average daily sales.
• The company maintained stable gross margins and saw a slight increase in SG&A expenses, despite inflationary pressures, primarily due to acquisitions and additional costs associated with an extra selling week.