Daily Brief Equity Bottom-Up: Resonac Holdings – Improving Mix and more

• Semiconductor segment drives structural margin expansion, now contributing over 100% of core profit with record Q3 performance.
• Legacy Chemicals and Graphite remain weak, but consolidated EBITDA outlook for FY2026–27 strengthens on improving mix.
• Forward valuation supports ¥8,000 target; Resonac trades at a discount to global semiconductor-materials peers despite rising semis exposure.

• Revenues for 9 months up 7% while profits are up 7.5%
• Margins improved across both divisions, Healthcare and Consumer. Working capital marginally increased.
• 4th quarter is the best quarter for the company due to the festive season.

• Revenue increased by 2.7% YoY to JPY3.1bn, with EC business up 6.8% and Financial business down 2.6%.
• Operating profit decreased 7.3% YoY to JPY575mn, with a 2.4pp rise in GPM and 4.3pp increase in SG&A ratio.
• Financial business segment profit rose 7.2% YoY to JPY402mn, with external payments handled growing 11.2% YoY.

• Onex is a leading alternative asset manager with a long-term track record of value creation, primarily through its private equity and credit platforms. The firm is currently navigating a challenging macroeconomic environment by focusing on strategic acquisitions and a shift towards a more capital-light model.
• A recent strategic partnership with AIG, including a significant capital commitment to Onex’s funds and AIG taking an equity stake, is expected to be transformational, enhancing the asset management platform’s profitability and accelerating growth in fee-generating assets under management (AUM).
• Despite near-term headwinds in fundraising and volatile financial performance tied to the exit environment, the company’s disciplined capital allocation, including consistent share buybacks at a discount to intrinsic value, and a growing, scalable credit business, position it for potential long-term shareholder value creation.

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• Open Text Corporation has reported its financial results for the first quarter of fiscal 2026, demonstrating resilience and growth amidst a strategic shift.
• The company’s total revenues reached $1.3 billion, a year-overyear increase of 1.5%, surpassing expectations due to strong demand in its Cloud and License segments.
• Specifically, the Cloud segment, which generated $485 million in revenue, experienced a 6% growth year-overyear, primarily driven by the Content product category.

• Parsons Corporation reported its third-quarter 2025 financial results, emphasizing robust performance in a challenging global environment.
• The company showcased strategic positioning and strong alignment with global priorities in national security and infrastructure.
• This quarter, the company demonstrated significant achievements in organic revenue growth, expansion in adjusted EBITDA margins, exceeded cash flow expectations, and secured pivotal contracts.

• Jazz Pharmaceuticals reported a strong performance in the third quarter of 2025, achieving a record revenue surpassing $1.1 billion.
• The growth was largely driven by solid sales from Xywav, Epidiolex, and the successful early launch of Modeyso.
• These developments underscore the company’s ability to deliver highly differentiated therapies addressing serious unmet medical needs, which is an indication of strategic execution and robust operational capabilities.

• Leading Market Position with Diversifying Business: China Boqi is a leading independent flue gas treatment provider in China, primarily serving the coal-fired power sector. The company is strategically diversifying into adjacent environmental sectors, including water treatment, hazardous and solid waste treatment, and dual-carbon energy-saving businesses, to capture broader market opportunities driven by China’s stringent environmental policies.
• Attractive Valuation and Strong Dividend Yield: The company trades at a significant discount to the broader market, with a P/E ratio of approximately 3.75x and a P/B ratio of 0.28x. This is complemented by a consistent and growing dividend, yielding approximately 4.8%, making it an attractive proposition for value and income-oriented investors.
• Regulatory Tailwinds vs. Transitional Risks: China’s national commitment to environmental protection and carbon neutrality provides a strong, long-term tailwind for the industry. However, the company faces risks associated with its legacy dependence on the coal power industry, intense market competition, and the execution of its diversification strategy into new, competitive fields.

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• The third quarter of 2025 earnings report for Louisiana-Pacific Corporation (LP) presents a mixed picture, reflecting both strategic advancements and ongoing challenges.
• On the positive side, LP’s Siding business showed resilience in a soft market, with a 5% increase in sales revenue driven primarily by pricing and a favorable mix.
• Notably, the ExpertFinish prefinished siding product, with a 17% increase in sales volume, has contributed significantly, buoyed by the successful launch of a new line of nature-inspired colors.

• Exceptional Profitability Growth Amidst Revenue Contraction: The company has demonstrated a remarkable ability to grow net income and EPS, with a 3-year CAGR exceeding 51%, despite a concurrent decline in revenues. This suggests a successful strategic shift towards higher-margin products, significant operational efficiencies, or divestiture of underperforming assets.
• Strategic Positioning for the New Energy Vehicle (NEV) Transition: Beijing WKW is actively investing in and expanding its product lines to include components for electric vehicles (EVs). This forward-looking strategy positions the company to capitalize on the rapid growth of the NEV market in China, which is the largest and fastest-growing in the world.
• Attractive Shareholder Returns and Valuation: The company exhibits strong value and dividend characteristics, underscored by high Smartkarma scores in these categories. A consistent dividend yield, which stood at 1.86% in the most recent fiscal year, combined with a reasonable valuation, presents an attractive proposition for value-oriented investors.

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