Industrials

• 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.

• 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.

• After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace. 
• The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
• While there could be a short term pop to Hanwha Aerospace’s stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations

• Given the slew of A/H offerings in the Hong Kong IPO pipeline, in this note, we talk about the overall A/H premiums currently.
• We also had a quick look at the past A/H listing performance, including subscription rates and A/H premiums at the time of listing.
• Overall, most of the A/H listings haven’t done much in the near term, with a few exceptions.

• Incentives drive behavior. Designing a good fee structure is paramount in managing potential conflicts of interests.
• This is all the more important in Singapore’s REIT and Business Trust sector, where the use of external manager and Trustee Manager is the norm.
• This is in sharp contrast to all for profit companies, where internal management teams manage the businesses for the benefit of all (or most) shareholders.

• Transformers & Rectifiers (India) Ltd (TRIL IN)  is a prominent player in the manufacturing of transformers and reactors with the largest private sector facility in India producting diverse product range
• With three transformer manufacturing facilities, the company has embarked on a capex spree, with planned additions of ~30,000-35,000 MVA. 
• Taking about forensics, the company has faced concerns with regarding liquidity, issuance of a stop-deal notice and stop payment by a major customer, write offs, etc.

• Brad Jacobs’ company QXO acquired Beacon Roofing for $11 billion in all cash deal
• Beacon Roofing is a distributor specializing in roofing and waterproofing products.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Berli Jucker booked a solid set of results for 4Q2024, with margin improvements across its four major segments, but its modern retail supply chain under Big C stood out.
• A call with Big C confirmed strong momentum behind SSSG, driven by its ongoing move into fresh food and private label, which are both outperforming overall growth.
• Packaging, consumer, and healthcare & technical supply chains are also seeing strong recovery, whilst valuations look attractive from a historical perspective. 

• Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) announced its Q3(9M) FY2025/3 results on January 31, 2025.
• Net sales and profit were higher than in Q3 FY2024/3 due to the substantial order backlog.
• Growth in Q3 FY2025/3 orders was lackluster due to a falloff from large Q3 FY2024/3 orders from China, but if one excludes those particularly large orders, net sales grew year on year.

• Verbrec Limited (ASX:VBC) provides engineering, asset management, infrastructure services and training to the energy, mining, infrastructure and defence industries in Australia, New Zealand, PNG and the Pacific Islands.
• The company has announced that its wholly-owned subsidiary StacksOn Operations Pty Ltd has entered into a Software Reseller Agreement with Datamine for Verbrec’s stockpile digital twin product StacksOn.
• The product was developed in-house by Verbrec and commercialised in 2021 and is currently utilised by BHP at its iron ore mines and ports in Western Australia.

• After years of turbulence marked by the 737 MAX crises, persistent quality control issues, and billions in losses across both its commercial and defense segments, Boeing is showing signs of a long-awaited stabilization.
• In recent weeks, a series of major developments have helped reignite optimism around the aerospace giant.
• The company scored a significant defense contract victory over Lockheed Martin, landing the U.S. Air Force’s F-47 fighter jet deal—an upset that added billions in market value and sent Boeing shares surging.

• In Dun & Bradstreet’s latest financial performance, the company demonstrated both progress and areas needing attention.
• The fourth quarter and full-year results for 2024 show mixed outcomes, reflecting the broader challenges and strategic shifts within the organization.
• Dun & Bradstreet reported a modest revenue increase of 3% for the full year, culminating in total revenues of $2,382 million, consistent with both before and after foreign exchange adjustments.

• After the market close on 27 March, the Financial Supervisory Service (FSS) surprisingly announced a temporary halt to the 3.6 trillion won rights offering capital raise of Hanwha Aerospace. 
• The FSS has requested a correction report to the massive paid-in capital increase securities report submitted by Hanwha Aerospace on 20 March.
• While there could be a short term pop to Hanwha Aerospace’s stock tomorrow, we continue remain negative on Hanwha Aerospace over next 1 year mainly due to its stretched valuations

• Given the slew of A/H offerings in the Hong Kong IPO pipeline, in this note, we talk about the overall A/H premiums currently.
• We also had a quick look at the past A/H listing performance, including subscription rates and A/H premiums at the time of listing.
• Overall, most of the A/H listings haven’t done much in the near term, with a few exceptions.

• Incentives drive behavior. Designing a good fee structure is paramount in managing potential conflicts of interests.
• This is all the more important in Singapore’s REIT and Business Trust sector, where the use of external manager and Trustee Manager is the norm.
• This is in sharp contrast to all for profit companies, where internal management teams manage the businesses for the benefit of all (or most) shareholders.

• Transformers & Rectifiers (India) Ltd (TRIL IN)  is a prominent player in the manufacturing of transformers and reactors with the largest private sector facility in India producting diverse product range
• With three transformer manufacturing facilities, the company has embarked on a capex spree, with planned additions of ~30,000-35,000 MVA. 
• Taking about forensics, the company has faced concerns with regarding liquidity, issuance of a stop-deal notice and stop payment by a major customer, write offs, etc.

• Brad Jacobs’ company QXO acquired Beacon Roofing for $11 billion in all cash deal
• Beacon Roofing is a distributor specializing in roofing and waterproofing products.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Berli Jucker booked a solid set of results for 4Q2024, with margin improvements across its four major segments, but its modern retail supply chain under Big C stood out.
• A call with Big C confirmed strong momentum behind SSSG, driven by its ongoing move into fresh food and private label, which are both outperforming overall growth.
• Packaging, consumer, and healthcare & technical supply chains are also seeing strong recovery, whilst valuations look attractive from a historical perspective. 

• Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) announced its Q3(9M) FY2025/3 results on January 31, 2025.
• Net sales and profit were higher than in Q3 FY2024/3 due to the substantial order backlog.
• Growth in Q3 FY2025/3 orders was lackluster due to a falloff from large Q3 FY2024/3 orders from China, but if one excludes those particularly large orders, net sales grew year on year.

• Verbrec Limited (ASX:VBC) provides engineering, asset management, infrastructure services and training to the energy, mining, infrastructure and defence industries in Australia, New Zealand, PNG and the Pacific Islands.
• The company has announced that its wholly-owned subsidiary StacksOn Operations Pty Ltd has entered into a Software Reseller Agreement with Datamine for Verbrec’s stockpile digital twin product StacksOn.
• The product was developed in-house by Verbrec and commercialised in 2021 and is currently utilised by BHP at its iron ore mines and ports in Western Australia.

• After years of turbulence marked by the 737 MAX crises, persistent quality control issues, and billions in losses across both its commercial and defense segments, Boeing is showing signs of a long-awaited stabilization.
• In recent weeks, a series of major developments have helped reignite optimism around the aerospace giant.
• The company scored a significant defense contract victory over Lockheed Martin, landing the U.S. Air Force’s F-47 fighter jet deal—an upset that added billions in market value and sent Boeing shares surging.

• In Dun & Bradstreet’s latest financial performance, the company demonstrated both progress and areas needing attention.
• The fourth quarter and full-year results for 2024 show mixed outcomes, reflecting the broader challenges and strategic shifts within the organization.
• Dun & Bradstreet reported a modest revenue increase of 3% for the full year, culminating in total revenues of $2,382 million, consistent with both before and after foreign exchange adjustments.

• DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
• We previously discussed the IPO in DN Solutions IPO: The Bull Case and DN Solutions IPO: The Bear Case.
• I examine the syndicate’s valuation methodology. My analysis suggests that DN Solutions is palatable in the low end of the IPO price range. 

• While Shenzhen International (152 HK)‘s FY24 result is at the low end of the positive profit alert range, its 2H24 net profit has still grown by 22.7%. 
• Better outlook at Shenzhen Expressway (548 HK) and margin improvement for logistics hubs will drive FY25. Upside will come from further gains at South China Logistics Park. 
• SZI’s valuations of 5.9x PER, 8.4% yield, and 0.5x P/B for FY25F are attractive. As more deals are sealed to realise its asset value, its P/B discount will narrow.

• Warren Buffett is investing more in Japan’s trading companies for a variety of reasons but Itochu stands alone in its dominance of Japan’s fashion sector.
• Itochu continues to emphasise investment in consumer brands, particularly fashion and sports, but will now adjust its decades-old playbook, introducing more direct oversight of subsidiaries and affiliates.
• This will include a big new push to turn Vivienne Westwood into a luxury brand, upgrading Paul Smith and bringing Descente Ltd (8114 JP) in-house

• FedEx Corporation’s third-quarter fiscal 2025 performance showcases a balanced mix of operational successes and challenges.
• The results highlight a 2% year-over-year revenue increase, primarily attributed to operational efficiency initiatives, notably the DRIVE savings program, which achieved $600 million in savings for the quarter.
• Driven by these efficiencies, the company saw a 12% increase in adjusted operating income and a 17% rise in adjusted EPS compared to the previous year.

• DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
• We previously discussed the IPO in DN Solutions IPO: The Bull Case and DN Solutions IPO: The Bear Case.
• I examine the syndicate’s valuation methodology. My analysis suggests that DN Solutions is palatable in the low end of the IPO price range. 

• While Shenzhen International (152 HK)‘s FY24 result is at the low end of the positive profit alert range, its 2H24 net profit has still grown by 22.7%. 
• Better outlook at Shenzhen Expressway (548 HK) and margin improvement for logistics hubs will drive FY25. Upside will come from further gains at South China Logistics Park. 
• SZI’s valuations of 5.9x PER, 8.4% yield, and 0.5x P/B for FY25F are attractive. As more deals are sealed to realise its asset value, its P/B discount will narrow.

• Warren Buffett is investing more in Japan’s trading companies for a variety of reasons but Itochu stands alone in its dominance of Japan’s fashion sector.
• Itochu continues to emphasise investment in consumer brands, particularly fashion and sports, but will now adjust its decades-old playbook, introducing more direct oversight of subsidiaries and affiliates.
• This will include a big new push to turn Vivienne Westwood into a luxury brand, upgrading Paul Smith and bringing Descente Ltd (8114 JP) in-house

• FedEx Corporation’s third-quarter fiscal 2025 performance showcases a balanced mix of operational successes and challenges.
• The results highlight a 2% year-over-year revenue increase, primarily attributed to operational efficiency initiatives, notably the DRIVE savings program, which achieved $600 million in savings for the quarter.
• Driven by these efficiencies, the company saw a 12% increase in adjusted operating income and a 17% rise in adjusted EPS compared to the previous year.

• BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
• Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
• Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

• SKF India Ltd (SKF IN) has announced the demerger of its industrial business, which will be listed separately for enhanced focus and operational efficiency in both segments.
• The company’s automotive business has high volume but low margins, whereas the industrial segment offers higher margins, highlighting a significant contrast in profitability between the two business segments.
• The automotive business would attract investors seeking long-term, steady growth, while the industrial segment would appeal to investors focused on higher margins and more lucrative returns.

• Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
• They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
• Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the June 2025 index rebal event.
• We see up to five M&A-related intra-review changes for the F250 index in the run up to the June 2025 review. Many could be very high impact.
• Separately, there could be one regular index change for the F250 index in June 2025. At present, we do not see any changes for the F100 index.

• InterGlobe Aviation Ltd (INDIGO IN) placed a record aircraft order and announced plans to double its size by 2030, including entry into long-haul international routes via Airbus A350s.
• This signals a shift from being a low-cost, short-haul leader to a global aviation player aiming for 40% international capacity by FY30.
• IndiGo is no longer just a domestic LCC story: its scale, global ambitions, and diversification make it a long-term structural compounder in aviation.

• DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
• DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
• We have looked at its past performance in our earlier notes. In this note, we will talk about valuations.

• Regal Rexnord’s fourth quarter performance exhibited both commendable strengths and notable challenges, painting a mixed picture of its financial health and future prospects.
• On the positive side, the company demonstrated strong operational execution, with significant progress in initiatives such as synergy realization, gross margin expansion, and debt reduction.
• Specifically, the Automation and Motion Control (AMC) segment exceeded revenue expectations and saw a near 9% increase in orders, while Power Efficiency Solutions (PES) achieved impressive growth in the residential HVAC vertical.

• In this edition: • Arcadis | completes acquisition of KUA Group

Genuit’s (GEN’s) FY24 revenue declined by 4.3% y-o-y to £561.3m due to subdued demand. However, market conditions stabilised in H224 with a 0.5% y-o-y revenue decline versus a 10.6% decline in H124. Reported operating profit decreased by 4.5% y-o-y to £59.2m, while underlying profit margin increased 40bp y-o-y to 16.4%, driven by productivity gains through the company’s Genuit Business System (GBS) and purchasing savings. Increased focus on working capital improvements resulted in underlying operating cash generation of £91.6m, representing 99.3% cash conversion on a post-capex basis. GEN further strengthened its balance sheet, reducing net debt/EBITDA to 0.9x (FY23: 1.1x). Underlying EPS decreased to 24.6p (FY23: 25.2p) due to lower operating profit and annualisation of the higher UK tax rate, while DPS increased to 12.5p (12.4p).

SIG has endured tough trading conditions and some questionable strategic initiatives over the last 10 years. Assuming that underlying construction markets in SIG’s core geographies can muster some growth from H225, the combination of top-line growth and reduced costs could drive the EBITDA margin towards management’s 8% target. If achieved, there is the potential to reduce debt and for SIG to benefit from a material re-rating.

• BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
• Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
• Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

• SKF India Ltd (SKF IN) has announced the demerger of its industrial business, which will be listed separately for enhanced focus and operational efficiency in both segments.
• The company’s automotive business has high volume but low margins, whereas the industrial segment offers higher margins, highlighting a significant contrast in profitability between the two business segments.
• The automotive business would attract investors seeking long-term, steady growth, while the industrial segment would appeal to investors focused on higher margins and more lucrative returns.

• Local traders size up borrowing balances by comparing them to free-float shares, using KRX data for consistency. While not always exact, it’s the go-to reference for most traders.
• They usually watch for borrowing balances crossing 3% of float, triggering price action. With short selling back, many are now bumping that threshold to 4%.
• Borrowing balance structures differ between large and small/mid-caps. Traders use a 1 trillion KRW market cap threshold to split them, aligning with TMI indices for long/short setups.

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the June 2025 index rebal event.
• We see up to five M&A-related intra-review changes for the F250 index in the run up to the June 2025 review. Many could be very high impact.
• Separately, there could be one regular index change for the F250 index in June 2025. At present, we do not see any changes for the F100 index.

• InterGlobe Aviation Ltd (INDIGO IN) placed a record aircraft order and announced plans to double its size by 2030, including entry into long-haul international routes via Airbus A350s.
• This signals a shift from being a low-cost, short-haul leader to a global aviation player aiming for 40% international capacity by FY30.
• IndiGo is no longer just a domestic LCC story: its scale, global ambitions, and diversification make it a long-term structural compounder in aviation.

• DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
• DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
• We have looked at its past performance in our earlier notes. In this note, we will talk about valuations.

• Regal Rexnord’s fourth quarter performance exhibited both commendable strengths and notable challenges, painting a mixed picture of its financial health and future prospects.
• On the positive side, the company demonstrated strong operational execution, with significant progress in initiatives such as synergy realization, gross margin expansion, and debt reduction.
• Specifically, the Automation and Motion Control (AMC) segment exceeded revenue expectations and saw a near 9% increase in orders, while Power Efficiency Solutions (PES) achieved impressive growth in the residential HVAC vertical.

• In this edition: • Arcadis | completes acquisition of KUA Group

Genuit’s (GEN’s) FY24 revenue declined by 4.3% y-o-y to £561.3m due to subdued demand. However, market conditions stabilised in H224 with a 0.5% y-o-y revenue decline versus a 10.6% decline in H124. Reported operating profit decreased by 4.5% y-o-y to £59.2m, while underlying profit margin increased 40bp y-o-y to 16.4%, driven by productivity gains through the company’s Genuit Business System (GBS) and purchasing savings. Increased focus on working capital improvements resulted in underlying operating cash generation of £91.6m, representing 99.3% cash conversion on a post-capex basis. GEN further strengthened its balance sheet, reducing net debt/EBITDA to 0.9x (FY23: 1.1x). Underlying EPS decreased to 24.6p (FY23: 25.2p) due to lower operating profit and annualisation of the higher UK tax rate, while DPS increased to 12.5p (12.4p).

SIG has endured tough trading conditions and some questionable strategic initiatives over the last 10 years. Assuming that underlying construction markets in SIG’s core geographies can muster some growth from H225, the combination of top-line growth and reduced costs could drive the EBITDA margin towards management’s 8% target. If achieved, there is the potential to reduce debt and for SIG to benefit from a material re-rating.

• Lotte Global Logistics is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 11,500 won and 13,500 won.
• At the high end of the IPO price range, the expected public offering amount is 202 billion won.
• According to the bankers’ valuation, the expected market cap after the IPO is 479 billion won to 562 billion won. 

• Investors should keep a close eye on Adani’s execution timeline, the impact on valuations in the sector, and the fundamentals of existing players in the C&W industry. 
• While Adani’s entry may bring some disruption, the sector’s strong growth prospects and the resilience of leading players suggest that there is still value to be found. 
• In the end, long-term success in this industry will depend on a combination of strategic vision, operational excellence, and the ability to adapt to changing market dynamics.

• DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.
• In DN Solutions IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on tepid growth due to volume declines, early indications of margin pressure, rising cash conversion cycle, and mid-tier FCF margin.

• DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
• DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
• We have looked at its past performance in our earlier notes. In this note, we will undertake a peer comparison.

• Teledyne Technologies Incorporated presented a mixed financial performance in their fourth quarter of 2024 earnings call.
• The company reported record revenues, with a 5.4% increase in sales compared to the prior year.
• This growth was further highlighted by record achievements in full-year non-GAAP earnings per share and operating margins.

Despite a challenging trading environment in H225, which has prompted a modest adjustment to forecasts, Braemar’s trading outlook for FY26 is promising. The underlying activities continue to expand and diversify, and the company remains well positioned to leverage its strong balance sheet to drive its growth strategy in a fragmented market. Although we have adjusted forecasts modestly, we have maintained our 535p valuation as this is driven by our dividend discount model, which remains unchanged. Furthermore, it is worth highlighting the substantial valuation differential between Braemar and its only quoted peer, Clarkson.

• Q3 2025/3 Earnings Result Summary: Nitto Kogyo Corporation (hereafter, the Company) announced net sales of JPY 133,354 mn (+14.1% YoY), operating profit of JPY 9,298 mn (+3.3% YoY), ordinary profit of JPY 9,503 mn (-0.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 9,014 mn (+36.3% YoY).
• The double-digit increase in net profit was attributed to the recording of extraordinary gains on the acquisition of shares in a subsidiary.
• FY2025/3 Earnings Forecast: The forecast calls for net sales of JPY178,000 mn (+10.8% YoY), operating profit of JPY12,000 mn (+0.3% YoY), ordinary profit of JPY12,000 mn (-4.5% YoY), and net profit of JPY10,000 mn (+14.7% YoY).

• By some measures, combined Jan-Feb volume growth slowed vs recent trend growth rates
• Volume leader ZTO rejoining volume share game in FY25, -ive implications for pricing?
• With concerns about mainstream price growing, we continue to favor only SF Holding

• Sono Group is a pioneering German solar technology company dedicated to revolutionizing the transportation industry. 
• Sono’s focus is on developing and commercializing innovative solar integration technologies for a wide range of vehicles, including solar kits for trucks, semi-truck trailers, vans, RVs, and buses.
• The products are designed to reduce fuel consumption and CO2 emissions, offering cost savings and environmental benefits to commercial fleet operators.

• Jiangsu Zenergy Battery Technologies (JSZENERGY CH) is looking to raise up to US$300m in its upcoming HK IPO.
• Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
• In this note, we talk about the not-so-positive aspects of the deal.