Daily Brief Equity Bottom-Up: Taiheiyo Cement (5233 JP): U.S. Scarcity Assets Drive Activist Re-Rating Potential and more

• Taiheiyo Cement’s California platform is vertically integrated and permit-constrained, yet valued at a Japanese consolidated multiple.
• Activist engagement targets U.S. asset re-rating, capital allocation discipline, and potential monetisation.
• Base case values shares at ¥4,800; activist outcome implies ¥7,200 driven by U.S. multiple normalisation.

• Fenix Resources (FEX AU) provided more color during its three-year production plan call on its journey from 4 million to 6 million tons by FY28, and beyond 10 million tons post-FY29. 
• The company requires a minimum capex of AUD 35-45 million (excluding fleet expansion capex of AUD 20 million) to ramp up to 6 million tons. 
• Stock trades at 5.4x/4.7x FY26/27PE, based on 4.5/5 million ton shipments at 100 USD/ton. Risks to estimates lie in iron ore prices moving below 100 USD/ton or cost inflation. 

• Tape will be weak to start, but may find dip buying given the bullish read from Micron which is helping send futs higher 
• Chinese ex-ASML engineers have reversed engineered a EUV lithography machine. Not awesome news for Lasertec and Jeol either. 
• China cooling on Japan has led to a big drop in tourist arrival growth rates. Expected – but still negative for duty free, hotels and rails etc. 

• Theme International Holdings, recently renamed Deep Source Holdings Limited, is a diversified company operating in two core, yet volatile, segments: high-volume, low-margin bulk commodity trading and financial services.
• The company is experiencing a significant downturn in profitability, with net income and margins declining sharply in the most recent fiscal year, despite a strong long-term revenue growth history. This raises concerns about the sustainability of its current business model.
• The recent proposal to change the company name to Deep Source Holdings Limited signals a potential strategic shift or rebranding effort to better reflect its future business development, the success of which remains a key variable for future performance.

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• DOWA has re-rated from ¥4,500 to ~¥7,000 on risk compression and commodity optionality, not improved structural returns.
• FY25 earnings were revised upward, but ROIC remains mid-single digit, with Electronic Materials a persistent structural drag.
• Even at elevated silver prices, valuation appears largely priced in, supporting a Neutral stance.

• The reorg will see H1/25 Minerals revenue decline to zero as items are reclassified to Iron Ore and Aluminum/Lithium and Iron/Titanium and Borates are under review      
• Guidance for 2026 indicates a 4.3% and 2.6% yoy increase in iron ore and alumina output, respectively, but a -2.5% and -3.7% decline in bauxite and copper production
• Rio appears near fully valued, with -3.9% downside to our DCF and 4.5% upside to the consensus target, and we still see downside risk for iron ore and copper prices 

• Context: The ARB Corp (ARB AU) vs. Amotiv (AOV AU) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long ARB Corp (ARB AU) and short Amotiv (AOV AU) targets a 6% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• CICC (3908 HK) announced details of its merger, and as Dongxing Securities (601198 CH) is valued higher, FY26F EPS dilution will be 8.5% on a weighted average basis.
• Its post-merger FY26 and FY27 PERs are higher than the sector average, but given its rise to the 3rd largest H-share securities company, the premium can be justified.
• Larger H-share securities companies have edged up since 19-Nov, which bodes well for CICC. We envisage a muted share price reaction, but long-term investors can build a position.  

• Palo Alto Networks recently shared its financial outcomes for the first fiscal quarter of 2026, exhibiting robust performance across various metrics.
• Total revenue for the quarter increased by 16% year-over-year to $2.47 billion, significantly surpassing expectations.
• The company’s focus on platformization and Next-Generation Security (NGS) offerings continue to guide its strategic direction, contributing to the company’s robust earnings.

• Skylink Holdings Limited (“Skylink” or “the Group”) is a newly listed commercial vehicle leasing and engineering solutions provider, formed through the reverse takeover (“RTO”) of Sincap Group in September 2025.
• With just 8 years of operational history under its subsidiary Skylink APAC, the Group has grown into one of Singapore’s largest commercial vehicle leasing platforms.
• Its integrated business model spans long-term commercial vehicle leasing and fleet management (“SKVR”), vehicle credit and hire-purchase financing (“SKCR”), and engineering services including MRO, refurbishment, and bodywork solutions (“SKER”).