Daily Brief Industrials: Air China Ltd (A), Wakita & Co Ltd, Hyundai Elevator Co, Canvest Environmental Protection Group, Tokyu Corp, Epwin Group PLC, PostNL NV and more

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
• Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• Tsuyoshi Maruki’s Strategic Capital has gone after a number of cash-rich companies in the past. This is Year 5 going after Wakita & Co Ltd (8125 JP).
• Wakita is cash-rich, and has been for years, but it is also asset-rich. The former CEO, after he retired, decided he wanted to play in real estate.
• At the end of last month, Strategic Capital made proposals (English, Japanese) to Wakita. Again. Today, the company responded (only in Japanese). Time for more.

• Hyundai Elevator Co (017800 KS)’s share price has been moving higher on the back of higher dividends and a beneficiary of the potential economic co-operations between North and South Korea.
• Hyundai Elevator currently has a dividend yield of 8%, which is one of the highest dividend yields among Korean companies with more than 2 trillion won in market cap.
• There have been some initial discussions about increased economic co-operation between North and South Korea. Hyundai Elevator is a key beneficiary in such a scenario. 

• On the 22 July 2024, waste-to-energy play Canvest Environmental (1381 HK)announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
• On the 17th March 2025, all pre-conditions were (finally) satisfied. 
• The Scheme Doc is now out, with a Court Meeting on the 12th May, with payment on or before the 10th June. The IFA (Somerley) says “fair & reasonable“.

• Tokyu may have just sold off its Tokyu Plaza building in Ginza but it is continuing to invest in retail.
• In particular, it will focus on newand upgraded retail facilities along the main Tokyu railway lines over the next decade,
• To make this happen and improve efficiency, it will merge its retail businesses into a more efficient, centralised core this summer.

Epwin Group’s FY24 results were robust and modestly ahead of market expectations, and FY25 trading appears to have begun with some optimistic trends. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. Long-term, well-established growth trends imply that the company is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. It trades on an FY25e P/E ratio of 8.7x, materially below the long-term average of 10.5x, and yields nearly 6%. The share buyback programme should continue to support the share price and could be extended again in due course.

• In this edition: • ASML Holding | reiterates FY25 outlook – order intake below long-term desired level • dsm-firmenich | deadline for non-binding offers for ANH this Thursday • Van Lanschot Kempen | Bank Delen further expands its presence in the Netherlands • Vopak | partnership with OQ to accelerate development of Duqm as integrated industrial hub • PostNL | main takeaways from yesterday’s AGM • TomTom | change in accounting strongly beneficiary for profitability – no impact on FCF