Industrials

• In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks starting 17 March. 
• Some of the top 10 Korean stock picks in the bi-weekly (starting 17 March) include Kepco Plant Service & Engineering, Hyundai Wia, Poongsan, and Doosan Enerbility. 
• The biggest near-term negative catalyst on the Korean stock market remains tariffs.  The final legal outcome on President Yoon Seok-Yeol is expected to be made by the end of March.

• Rates fell by -24% Q/Q in Q424, but ZIM exceeded consensus Q4 revenue & earnings targets
• Management guidance & commentary regarding 2025 profitability paints a bleak picture
• In our view, investors in container carriers would do well to heed these clear warnings

• Post COVID investors have been monitoring Keisei Electric Railway Co (9009 JP) as part of the shareholder activism program. 
• Recently, the management has announced a share buyback of up to 8 million shares. In 2022, they bought back 5 million shares, and the share price rallied 21% that year. 
• It currently trades at 6x PER while Topix trades at 14x PER. 

• Salzer Electronics (SZE IN) is aggressively scaling its smart meter business with INR 600–700 crore revenue targeted in FY26, aiming to sell up to 8 lakh units annually.
• This diversification into B2B smart metering could double revenues, boost margins, and improve ROCE, transforming Salzer from a niche switchgear player to a full-stack energy solutions provider.
• Salzer is no longer a slow-growing industrial supplier: it’s evolving into a high-growth, government-aligned, tech-driven player with strong export and R&D-led optionality.

• DN Solutions is getting ready to complete its IPO in Korea in May 2025. The IPO price range is from 65,000 won to 89,700 won.
• The book building for the institutional investors will last from 22 to 28 April. The expected IPO offering amount is from 1.14 trillion won to 1.57 trillion won.
• The IPO price range is based on DN Solutions’ net profit of 317.4 billion won, P/E of 25.2x, and IPO discount rates of 29.1% to 48.6%.

• Trex Company has reported its fourth-quarter and full-year 2024 financial results, showcasing a mix of strategic successes and ongoing challenges.
• The company exceeded revenue expectations, driven by strong demand for premium decking products and a nascent recovery in value-priced offerings.
• This performance reflects effective operating leverage from higher utilization rates and successful cost-reduction measures.

• KBR, Inc. demonstrated a strong financial performance in the fourth quarter and the full fiscal year 2024, surpassing its earlier projections.
• The company achieved revenues of $2.1 billion in the fourth quarter, culminating in an annual revenue of $7.7 billion, marking a 23% growth for the quarter and 11% for the year overall.
• Organic growth for the year stood at 9%.

• Friday Takeaway—delving a little deeper into UK small caps Friday Takeaway from UK Small Caps This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to raise awareness 7th March 2025 Alphabetically arranged Share prices and market capitalisations taken from Alpha Terminal from the current price on the day of publication.
• Top three shareholders are taken from the websites of the companies that we are writing about, unless there is a more up to date TR-1 notification RNS announcement.
• A deeper look into two possibly undervalued companies with results soon GATC Hiring Help GELN Smell of Success Gattaca 84p £25.98m (GATC.L) Financial Calendar: Year End July, Report October, Interims January, Report April Three Main Shareholders: George Materna 25.62%, MMGG Acquisition Ltd 22.81%, Paul Raine 5.65% Key Investment Points: Cyclical opportunity, Cash available for development, Low Rating There was an Interim Trading statement to the period end January 2025 in mid-February from this specialist staffing solutions business that was established 35 years ago.

• In today’s edition: • InPost | Allegro Delivery initiative: a valid concern?

• Post COVID investors have been monitoring Keisei Electric Railway Co (9009 JP) as part of the shareholder activism program. 
• Recently, the management has announced a share buyback of up to 8 million shares. In 2022, they bought back 5 million shares, and the share price rallied 21% that year. 
• It currently trades at 6x PER while Topix trades at 14x PER. 

• Salzer Electronics (SZE IN) is aggressively scaling its smart meter business with INR 600–700 crore revenue targeted in FY26, aiming to sell up to 8 lakh units annually.
• This diversification into B2B smart metering could double revenues, boost margins, and improve ROCE, transforming Salzer from a niche switchgear player to a full-stack energy solutions provider.
• Salzer is no longer a slow-growing industrial supplier: it’s evolving into a high-growth, government-aligned, tech-driven player with strong export and R&D-led optionality.

• DN Solutions is getting ready to complete its IPO in Korea in May 2025. The IPO price range is from 65,000 won to 89,700 won.
• The book building for the institutional investors will last from 22 to 28 April. The expected IPO offering amount is from 1.14 trillion won to 1.57 trillion won.
• The IPO price range is based on DN Solutions’ net profit of 317.4 billion won, P/E of 25.2x, and IPO discount rates of 29.1% to 48.6%.

• Trex Company has reported its fourth-quarter and full-year 2024 financial results, showcasing a mix of strategic successes and ongoing challenges.
• The company exceeded revenue expectations, driven by strong demand for premium decking products and a nascent recovery in value-priced offerings.
• This performance reflects effective operating leverage from higher utilization rates and successful cost-reduction measures.

• KBR, Inc. demonstrated a strong financial performance in the fourth quarter and the full fiscal year 2024, surpassing its earlier projections.
• The company achieved revenues of $2.1 billion in the fourth quarter, culminating in an annual revenue of $7.7 billion, marking a 23% growth for the quarter and 11% for the year overall.
• Organic growth for the year stood at 9%.

• Friday Takeaway—delving a little deeper into UK small caps Friday Takeaway from UK Small Caps This will delve a little deeper on individual companies and focus on non-house stocks under £200m market capitalisation to raise awareness 7th March 2025 Alphabetically arranged Share prices and market capitalisations taken from Alpha Terminal from the current price on the day of publication.
• Top three shareholders are taken from the websites of the companies that we are writing about, unless there is a more up to date TR-1 notification RNS announcement.
• A deeper look into two possibly undervalued companies with results soon GATC Hiring Help GELN Smell of Success Gattaca 84p £25.98m (GATC.L) Financial Calendar: Year End July, Report October, Interims January, Report April Three Main Shareholders: George Materna 25.62%, MMGG Acquisition Ltd 22.81%, Paul Raine 5.65% Key Investment Points: Cyclical opportunity, Cash available for development, Low Rating There was an Interim Trading statement to the period end January 2025 in mid-February from this specialist staffing solutions business that was established 35 years ago.

• In today’s edition: • InPost | Allegro Delivery initiative: a valid concern?

• An undisclosed seller is looking to raise around US$520m via selling 0.5% of its stake in Recruit Holdings (6098 JP) .
• We have covered a number of placements in the stock over the past few years, most of which have ended up doing well.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK)  announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
• It’s an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
• The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it’s a complex deal, which will take time to work through the system.

• With over 85% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 June.
• We estimate a one-way turnover of 11% at the rebalance resulting in a round-trip trade of CNY26.9bn (US$3.7bn). The Industrials sector could gain the most index spots.
• The forecast adds have outperformed the forecast deletes this calendar year. Part of that can be attributed to the outflows from ETFs tracking the CSI1000 Index.

• The street suspects NPS is fast-tracking its reference portfolio in local equities, not just rebalancing to cover last year’s underweight in its Q1 2025 adjustment.
• The passive-to-active shift is on—starting with enhanced passive, then an early ramp into event-driven and high-conviction active plays.
• We traders should expect outsized swings in leaders and restructuring plays as NPS flows amplify moves.

• In this insight, we discuss a new catalyst on the share price of LS Corp (006260 KS) which is the purchase of its shares by the Hoban Group. 
• Hoban Group has recently purchased shares of LS Corp. Although the exact percentage of shares has yet to be made public, it is estimated to be less than 3%. 
• LS Corp could improve shareholder returns. Plus, the ongoing litigation between Taihan Electric Wire and LS Cable may be the real reason why Hoban decided to invest in LS Corp. 

FY24 was a transformative year for Capita Group. With a new CEO and CFO, the company made good progress on its ‘Better Capita’ strategy. Capita is at the forefront of the significant opportunity arising from leveraging modern technologies, such as AI, to improve operational efficiencies, scalability and profits. During FY24 Capita began leveraging leading hyperscalers within AI, enabling it to lead the shift to a ‘service-as-software’ business model, redefining the support services industry. Capita also delivered £140m of annualised cost savings through its accelerated cost reduction strategy in 2024, to create better efficiencies across the wider group. Management confirmed in December 2024 that it had increased its total cost reduction target to £250m by end-December 2025, up from £160m by end-June 2025 previously, primarily driven by increases in the use of AI and generative AI, fundamentally improving its operating model.

Melrose continues to build on its track record of delivering to expectations. Indeed the Engines division has achieved FY25 target returns a year early. This provides confidence in management’s new medium-term guidance (to FY29): a minimum EPS CAGR of 20% and acceleration to £600m of annual free cash flow, benefiting from the maturing of the risk and revenue sharing partnerships (RRSPs). With further potential from additional military spend not factored in, the shares offer interesting value.

GlobalData’s results were as flagged, with the first year of its transformation plan setting the foundations for management’s goal of £500m of annualised revenue by end 2026. To get there it has to accelerate from its underlying 4% revenue growth rate to at least high single digits. It plans to do this by leveraging its platform with ever-greater customer focus and increasing use of AI, already well embedded, alongside continuing M&A. The Inflexion deal has given the financial resource, with a year-end net cash balance of £10m. The dividend has been rebased to reflect the transformation plan priorities, with a further £50m share buyback announced for the current year. GlobalData is planning to transition across to LSE’s Main Market, allowing investment from a broader cohort of potential shareholders.

ADS-TEC reported record revenue, albeit below previous guidance, despite 2024 being a more challenging period for EVs and associated infrastructure-related companies and some revenue deferrals into FY25. Strategic progress has laid the foundation for some potentially significant roll-out programmes. In addition, the company has announced plans to develop longer-term, more stable business revenues through value-added services, aimed at helping customers operate their infrastructure and maximise commercial potential. We will update our forecasts on publication of the detailed FY24 results.

Metlen’s FY24 results are scheduled for release on 20 February. We are expecting the conference call discussion to focus on the medium-term growth outlook, given the company’s recent announcement of an additional €300m investment in bauxite, alumina and gallium production, as well as its progress towards a listing on the London Stock Exchange (expected in H225).

• An undisclosed seller is looking to raise around US$520m via selling 0.5% of its stake in Recruit Holdings (6098 JP) .
• We have covered a number of placements in the stock over the past few years, most of which have ended up doing well.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK)  announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
• It’s an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
• The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it’s a complex deal, which will take time to work through the system.

• With over 85% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 June.
• We estimate a one-way turnover of 11% at the rebalance resulting in a round-trip trade of CNY26.9bn (US$3.7bn). The Industrials sector could gain the most index spots.
• The forecast adds have outperformed the forecast deletes this calendar year. Part of that can be attributed to the outflows from ETFs tracking the CSI1000 Index.

• The street suspects NPS is fast-tracking its reference portfolio in local equities, not just rebalancing to cover last year’s underweight in its Q1 2025 adjustment.
• The passive-to-active shift is on—starting with enhanced passive, then an early ramp into event-driven and high-conviction active plays.
• We traders should expect outsized swings in leaders and restructuring plays as NPS flows amplify moves.

• In this insight, we discuss a new catalyst on the share price of LS Corp (006260 KS) which is the purchase of its shares by the Hoban Group. 
• Hoban Group has recently purchased shares of LS Corp. Although the exact percentage of shares has yet to be made public, it is estimated to be less than 3%. 
• LS Corp could improve shareholder returns. Plus, the ongoing litigation between Taihan Electric Wire and LS Cable may be the real reason why Hoban decided to invest in LS Corp. 

FY24 was a transformative year for Capita Group. With a new CEO and CFO, the company made good progress on its ‘Better Capita’ strategy. Capita is at the forefront of the significant opportunity arising from leveraging modern technologies, such as AI, to improve operational efficiencies, scalability and profits. During FY24 Capita began leveraging leading hyperscalers within AI, enabling it to lead the shift to a ‘service-as-software’ business model, redefining the support services industry. Capita also delivered £140m of annualised cost savings through its accelerated cost reduction strategy in 2024, to create better efficiencies across the wider group. Management confirmed in December 2024 that it had increased its total cost reduction target to £250m by end-December 2025, up from £160m by end-June 2025 previously, primarily driven by increases in the use of AI and generative AI, fundamentally improving its operating model.

Melrose continues to build on its track record of delivering to expectations. Indeed the Engines division has achieved FY25 target returns a year early. This provides confidence in management’s new medium-term guidance (to FY29): a minimum EPS CAGR of 20% and acceleration to £600m of annual free cash flow, benefiting from the maturing of the risk and revenue sharing partnerships (RRSPs). With further potential from additional military spend not factored in, the shares offer interesting value.

GlobalData’s results were as flagged, with the first year of its transformation plan setting the foundations for management’s goal of £500m of annualised revenue by end 2026. To get there it has to accelerate from its underlying 4% revenue growth rate to at least high single digits. It plans to do this by leveraging its platform with ever-greater customer focus and increasing use of AI, already well embedded, alongside continuing M&A. The Inflexion deal has given the financial resource, with a year-end net cash balance of £10m. The dividend has been rebased to reflect the transformation plan priorities, with a further £50m share buyback announced for the current year. GlobalData is planning to transition across to LSE’s Main Market, allowing investment from a broader cohort of potential shareholders.

ADS-TEC reported record revenue, albeit below previous guidance, despite 2024 being a more challenging period for EVs and associated infrastructure-related companies and some revenue deferrals into FY25. Strategic progress has laid the foundation for some potentially significant roll-out programmes. In addition, the company has announced plans to develop longer-term, more stable business revenues through value-added services, aimed at helping customers operate their infrastructure and maximise commercial potential. We will update our forecasts on publication of the detailed FY24 results.

Metlen’s FY24 results are scheduled for release on 20 February. We are expecting the conference call discussion to focus on the medium-term growth outlook, given the company’s recent announcement of an additional €300m investment in bauxite, alumina and gallium production, as well as its progress towards a listing on the London Stock Exchange (expected in H225).

• Naigai Trans Line (9384 JP) is a small logistics provider. They specialise in LCL (“Less-Than-Container-Load” shipments around Asia. 
• On 7 March 2025, the company agreed to a buyout via Tender Offer by IAPF2 – a buyout vehicle of IA Partners – a 3yr old PE firm in Japan.
• This is 5.9x EBITDA. There’s minimal transparency. No guidance. The PE firm is putting down an equity check of 2x EBITDA and 4x earnings. But it’ll probably get done.

• Back on the 11th November 2024, Silk Logistics (SLH AU) entered into an Offer by way of a Scheme with Dubai-based DP World, Australia’s biggest ports operator.
• DP World offered A$2.14/share (less any dividends), a 45.6% premium to last close. The Offer has the backing of Silk’s board, and co-founders (holding ~46% of the shares out).
• This looked all stitched up. Potentially a delay for ACCC/FIRB, but it felt like one that should get approved. But the ACCC has now detailed a comprehensive list of concerns.

• Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
• Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
• Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.

• Eneco Energy plans to diversify beyond airport cargo logistics, aiming for profitable, cash flow-generative businesses through acquisitions.
• RichLand Logistics seeks to acquire a warehouse, enhance fleet utilization, and expand its logistics value chain.
• Eneco generated S$3.0 million net cash from operations with total equity of S$19.40 million as of 31 Dec 2024.

• In this edition: • Alfen | CCO Michelle Lesh to step down • Basic-Fit | adjusting its strategy to a better balance between growth and cash flow generation

• Frontier Management announced its full-year FY2024/12 results after market close on February 13, 2025.
• Net sales came in at JPY 9,265 mn, surpassing the forecast target of JPY 9,000 mn, mainly thanks to an increase in revenue from deals in the M&A Advisory Business.
• In addition to this increase in sales, cost-cutting measures in consulting-based businesses proved successful, which helped reduce operating losses from the forecasted JPY 950 mn to JPY 632 mn.

• Naigai Trans Line (9384 JP) is a small logistics provider. They specialise in LCL (“Less-Than-Container-Load” shipments around Asia. 
• On 7 March 2025, the company agreed to a buyout via Tender Offer by IAPF2 – a buyout vehicle of IA Partners – a 3yr old PE firm in Japan.
• This is 5.9x EBITDA. There’s minimal transparency. No guidance. The PE firm is putting down an equity check of 2x EBITDA and 4x earnings. But it’ll probably get done.

• Back on the 11th November 2024, Silk Logistics (SLH AU) entered into an Offer by way of a Scheme with Dubai-based DP World, Australia’s biggest ports operator.
• DP World offered A$2.14/share (less any dividends), a 45.6% premium to last close. The Offer has the backing of Silk’s board, and co-founders (holding ~46% of the shares out).
• This looked all stitched up. Potentially a delay for ACCC/FIRB, but it felt like one that should get approved. But the ACCC has now detailed a comprehensive list of concerns.

• Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
• Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
• Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.

• Eneco Energy plans to diversify beyond airport cargo logistics, aiming for profitable, cash flow-generative businesses through acquisitions.
• RichLand Logistics seeks to acquire a warehouse, enhance fleet utilization, and expand its logistics value chain.
• Eneco generated S$3.0 million net cash from operations with total equity of S$19.40 million as of 31 Dec 2024.

• In this edition: • Alfen | CCO Michelle Lesh to step down • Basic-Fit | adjusting its strategy to a better balance between growth and cash flow generation

• Frontier Management announced its full-year FY2024/12 results after market close on February 13, 2025.
• Net sales came in at JPY 9,265 mn, surpassing the forecast target of JPY 9,000 mn, mainly thanks to an increase in revenue from deals in the M&A Advisory Business.
• In addition to this increase in sales, cost-cutting measures in consulting-based businesses proved successful, which helped reduce operating losses from the forecasted JPY 950 mn to JPY 632 mn.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• Recently, IT-solutions company Baudroie (4413 JP) announced a move to the Prime Market. This would result in a TOPIX Inclusion event for the stock at the end of April 2025.
• Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.

• Taking advantage of a doubling in its share price over the last year, Austal is tapping the market to fund the expansion of its US facilities to fulfil US Navy contracts.
• Austal is placing out 52.6mn new shares (non-underwritten) at A$3.80/share – ~A$200mn all-in – a 15.6% discount to last close, and effectively tapping out its annual placement capacity.
• Provided the placement is squared away, founder John Rothwell will unload $50mn of his own stock. As such, any M&A activity is now firmly on the backburner. 

• Austal Ltd (ASB AU)  is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
• The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Defense Windfall: JSW dominates Japan’s artillery market, set to benefit as defense spending triples, driving a 232% surge in defense sales to 80 billion yen by 2028.
• Strategic Expansion: Exclusive forging capabilities secure JSW’s artillery monopoly, while investments in railguns and next-gen armoured vehicles fuel long-term growth.
• Energy Tailwinds: JSW’s nuclear and offshore wind expertise ensures stable revenue, with reactor restarts and turbine foundations boosting its power segment’s profitability.

• GiG Works reported a revenue of JPY5.9bn, an 8.6% YoY decline, with all profit categories turning to losses.
• The On-demand Economy business, accounting for 42% of Q1 revenue, saw a YoY decline in revenue and profit.
• The Sharing Economy business achieved YoY revenue and profit growth, with a 10.8% revenue increase to JPY1.2bn.

• The Mexican transport sector posted another positive quarterly result.
• The company’s efforts to contain costs, a better tariff environment, and diversified revenues resulted in margin expansions.
• VOLAR reported the most robust expansion in margins, followed by ASUR.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• Recently, IT-solutions company Baudroie (4413 JP) announced a move to the Prime Market. This would result in a TOPIX Inclusion event for the stock at the end of April 2025.
• Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.

• Taking advantage of a doubling in its share price over the last year, Austal is tapping the market to fund the expansion of its US facilities to fulfil US Navy contracts.
• Austal is placing out 52.6mn new shares (non-underwritten) at A$3.80/share – ~A$200mn all-in – a 15.6% discount to last close, and effectively tapping out its annual placement capacity.
• Provided the placement is squared away, founder John Rothwell will unload $50mn of his own stock. As such, any M&A activity is now firmly on the backburner. 

• Austal Ltd (ASB AU)  is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
• The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Defense Windfall: JSW dominates Japan’s artillery market, set to benefit as defense spending triples, driving a 232% surge in defense sales to 80 billion yen by 2028.
• Strategic Expansion: Exclusive forging capabilities secure JSW’s artillery monopoly, while investments in railguns and next-gen armoured vehicles fuel long-term growth.
• Energy Tailwinds: JSW’s nuclear and offshore wind expertise ensures stable revenue, with reactor restarts and turbine foundations boosting its power segment’s profitability.

• GiG Works reported a revenue of JPY5.9bn, an 8.6% YoY decline, with all profit categories turning to losses.
• The On-demand Economy business, accounting for 42% of Q1 revenue, saw a YoY decline in revenue and profit.
• The Sharing Economy business achieved YoY revenue and profit growth, with a 10.8% revenue increase to JPY1.2bn.

• The Mexican transport sector posted another positive quarterly result.
• The company’s efforts to contain costs, a better tariff environment, and diversified revenues resulted in margin expansions.
• VOLAR reported the most robust expansion in margins, followed by ASUR.

• Makino Milling Machine Co (6135 JP) has disclosed that it has received initial letters of intent from multiple third parties, reportedly private equity funds, to launch a competing tender offer.
• My analysis suggests that a white knight bid could be as high as JPY13,284, 20.8% higher than Nidec’s JPY11,000 offer and 10.2% higher than the last close price of JPY12,050.
• Nidec Corp (6594 JP) will take a wait-and-see approach. However, regardless of whether a white knight bidder emerges, Nidec will eventually have to bump.

• There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
• We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
• There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

• We discuss the potential KOSPI 200 rebalance candidates in June 2025. In recent years, there have been some alpha generating stocks arising from the KOSPI 200 rebalances.
• We include eight companies as potential inclusion candidates including LG CNS,  HD Hyundai Marine Solution, Shift Up, and Hanwha Engine.
• The top 5 potential deletion candidates for KOSPI 200 rebalance in June 2025 include Iljin Hysolus, Hansae, Foosung, Sam A Aluminum, and TKG Huchems.  

• SITC International (1308 HK)‘s 93.5% profit growth in FY24 is at the top-end of the positive profit alert. A final DPS of HK$1.4 put it on a 7.3% dividend yield. 
• The FY25 long-term contract rate is expected to rise 10%, with volume growing at least 5% and lower costs. The consensus forecast of a 23.1% earnings decline is too conservative. 
• Having an ROE of 32% for FY25F, its 12-month forward P/B of 2.46x (vs. average of 2.59x) with net cash equals 5.4% of market capitalisation are inexpensive. 

• A turnaround in progress – Q1-4 FY12/24 results were significantly ahead of guidance and a positive surprise, showing a solid recovery YoY with 9.7% sales growth YoY and a return to positive earnings territory.
• This indicates solid execution of structural reforms, with fixed costs being reduced by streamlining overseas staff and internalizing parts production that were previously outsourced.
• An uptick in demand in Q4 FY12/24 for both Machine Tools and Industrial Machinery was driven by connectors used in high-density fiber optic connections in the data center and telecommunications sectors. 

• In this edition: • Philips | large Dutch pension funds refrain from seeking financial compensation in apnea affair • Corporate agenda | week 11 – 15

• Singapore stocks recorded S$39 million in net institutional inflows, marking the first net buying since January’s last week.
• Industrials and Consumer Non-Cyclicals sectors reversed previous net outflows with significant inflows, led by ST Engineering and Wilmar International.
• ISDN Holdings’ share price rose 12.9% after reporting a 72% increase in FY24 attributable net profit.

• HYFM is a leading manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture (CEA).
• The company’s products consist primarily of consumable products, such as nutrients and growth media, grow lights, climate control solutions, rolling racks/benches, and various other equipment and supplies.
• Meeting full-year 2024 guidance despite weaker 4Q24. 

• Institutions were net sellers of Singapore stocks, with a net outflow of S$117 million from Feb 28 to Mar 6.
• DBS Group Holdings led share buybacks with 700,000 shares at S$46.15 each, totaling S$39,960,047 across 23 companies.
• Hong Leong Asia’s Executive Chairman increased his stake to 1.29% by acquiring 767,000 shares at S$0.989 each.