Daily Brief Industrials: Austal Ltd, Azoom, Zhejiang Sanhua Intellignt Controls Co., Ltd., Hanwha Corporation, Voyager Technologies, Electro Optic Systems Hldg, discoverIE Group, Olam Group, RITES Ltd and more

• There is 1 change for the S&P/ASX20 Index, 1 change for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index and 2 changes for the S&P/ASX 200 (AS51 INDEX).
• There is between A$30m-A$135m to trade in the index changes and that is between 0.7-16 days of ADV in the stocks. Short interest has jumped in a few stocks.
• We expect positioning to be lower than the passive trading in Nick Scali, Viva Energy Group, Perseus Mining, Austal Ltd and Healius.

• On Friday 6 June, Azoom (3496 JP) announced it would conduct an offering (small issuance of new shares, some Treasury shares, larger selldown by the main shareholder).
• That comes in conjunction with a transfer to TSE Prime from TSE Growth, which itself leads to a TOPIX Inclusion trade next month. 
• The company has decided to tack on a special dividend for this year, on top of growth and more liquidity. None of this is especially bad.

• Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) (ZSIC), a manufacturer of refrigeration and air-conditioning control components, aims to raise around US$1bn in its H-share listing.
• ZSIC is a market leader in a number of products, with commanding market share both domestically and globally.
• We have looked at the company’s past performance in our previous note. In this note, we look at the PHIP updates and talk about the likely A/H premium.

• We provide updated NAV valuations of Doosan Corp (000150 KS), Hanwha Corporation (000880 KS), CJ Corp (001040 KS), GS Holdings (078930 KS), and LOTTE Corporation (004990 KS).
• These holding companies’ outperformance has been driven by investors’ perception that the new Lee Jae-Myung administration will make real changes to improve corporate governance policies that could unlock greater value. 
• The share prices of Hanwha Corp, Doosan Corp, CJ Corp, GS Holdings, and Lotte Corp are up on average 97% YTD. 

• The company that describes itself as an innovation-driven defense technology and space solutions company has gained significant momentum in the first days of its roadshow
• The transaction has anchor orders from established funds and a $20 million directed share program. 
• At the midpoint of the range, Voyager is valued at 7x multiple of projected revenue for 2026 which is a discount to peers.

Electro Optic Systems (EOS) is a specialist defence business focused on remote weapons systems (RWS) and counter drone systems. The group is set to benefit from increased defence spend globally along with the rapid emergence of drone warfare and the subsequent requirement for asset protection systems. A strong balance sheet and restructured cost base provide a solid platform through which these opportunities can be leveraged.

Electro Optic Systems (EOS) is a specialist defence business focused on remote weapons systems (RWS) and counter drone systems. The group is set to benefit from increased defence spend globally along with the rapid emergence of drone warfare and the subsequent requirement for asset protection systems. A strong balance sheet and restructured cost base provide a solid platform through which these opportunities can be leveraged.

discoverIE’s FY25 results highlighted its ability to grow profits and earnings despite pressure on revenue. The adjusted operating margin increased 1.2pp to 14.3%, well ahead of the original 13.5% target for FY25, and adjusted EPS grew 5% y-o-y. This has prompted management to raise its adjusted operating margin target to 17% by FY30. The customer destocking phase appears to be nearly complete; both divisions saw 15% y-o-y organic order growth in Q425, pointing to an inflection point for organic revenue in FY26. Strong cash generation reduced year-end gearing to 1.3x, providing headroom for further M&A.

• The STI generated a 6.5% total return for 2025 to June 6, with an annualised return of 8.5%.
• SIA Engineering and Singapore Land Group achieved highest gains among non-STI stocks with market capitalisation above S$3 billion.
• Sheng Siong Group reported a 15% total return for 2025 to June 6, with increased revenue and net profit.

• RITES reported a ~10% YoY decline in revenue, from Rs2,453 Cr in FY24 to Rs2,218 Cr in FY25, with PAT falling ~16% to Rs424 Cr due to reduced turnkey execution.
• The company is ramping up selective metros, export projects, and EPC work, while maintaining its strong core consultancy business, which makes up roughly 50% of revenue.
• Trading at around 34× P/E, with a ROCE of ~21% and a dividend yield of ~3.8%, RITES remains well-positioned to benefit from India’s sustained rail sector investments.