In today’s briefing:
- Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
- ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS
- CATL H Share Listing: PHIP Reinforces the Investment Case
- CATL (300750 CH): Index Inclusion as Potential Listing Nears
- Event Driven: Deep Dive into Siemens Limited’s Energy Demerger
- Waste Management Inc. Locks In Profits with Smart RNG Deals Amid Renewable Energy Surge!
- FCN US: Segment Performance & Revenue Diversity As a Crucial Factor For Sustained Performance!
- Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update
- Business Breakdown: HP Adhesives- Building a Brand or Battling Giants
- CG Power: Strong Execution, Strategic Expansion, and Long-Term Growth Visibility
Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
- The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
- For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
- Even with only one name replacement, there are some big side trades and US$3.2bn a side to trade for now.
ZEEKR (ZK US): Geely Auto’s Light Non-Binding Offer at US$25.66 Per ADS
- Geely Auto (175 HK), the controlling shareholder, disclosed a cash or scrip non-binding proposal for ZEEKR (ZK US) at US$25.66 per ADS or 12.3 newly issued Geely shares.
- While the offer is 22.2% above the IPO price, it is unattractive compared to historical trading ranges, peer multiples and average sell-side price targets.
- The shareholder vote is a formality as Geely and concert parties exceed the two-thirds voting threshold. The key risk is the timing of a binding proposal.
CATL H Share Listing: PHIP Reinforces the Investment Case
- Contemporary Amperex Technology (CATL) (300750 CH), the world’s largest supplier of EV and ESS batteries, has filed its PHIP for an H-Share listing to raise US$5 billion.
- I previously discussed the H Share listing in CATL H Share Listing: The Investment Case and CATL H Share Listing: AH Discount Views.
- In this note, I examine the latest results and developments outlined in the PHIP. Overall, the PHIP reinforces my positive view.
CATL (300750 CH): Index Inclusion as Potential Listing Nears
- Reports continue to indicate a US$5bn raise for CATL H-shares with a discount of up to 10% to CATL (300750 CH) and with cornerstone investors taking up half the deal.
- The company is currently gauging investor demand. The IPO could open next week and the H-shares could list later this month.
- Index Fast Entry largely depends on the cornerstone investor allocation. Float higher than 50%/60% is required for Fast Entry to global indices.
Event Driven: Deep Dive into Siemens Limited’s Energy Demerger
- Siemens Ltd (SIEM IN) is spinning off its Energy Business into Siemens Energy India Limited (SEIL), creating two independent entities for focused growth and unlocking shareholder value.
- Post-Demerger, SEIL is well-positioned in the Indian energy sector, benefiting from decarbonization initiatives, capital investments, and strong export potential in the coming years.
- The remaining Siemens Limited will concentrate on technology sectors like Industry, Infrastructure, and Mobility, maintaining its strong business profile and order backlog, ensuring continued growth post-demerger.
Waste Management Inc. Locks In Profits with Smart RNG Deals Amid Renewable Energy Surge!
- Waste Management, Inc. has reported its first quarter 2025 earnings, revealing a strong start to the year with results exceeding expectations on multiple fronts.
- The company’s total operating EBITDA increased by over 12% compared to Q1 2024, driven by solid performances in its collection and disposal business, meaningful contributions from WM Healthcare Solutions, and growth in its sustainability initiatives.
- This robust performance underscores Waste Management’s operational capabilities and highlights effective execution in a challenging economic environment.
FCN US: Segment Performance & Revenue Diversity As a Crucial Factor For Sustained Performance!
- FTI Consulting delivered a mixed set of results for the first quarter of 2025 with both positive highlights and some areas of concern.
- The company’s revenues stood at $898.3 million, representing a 3.3% decrease compared to the same quarter last year.
- On a sequential basis compared to the previous quarter, revenues saw a marginal increase.
Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update
- The company achieved YoY revenue and profit growth, with operating profit up 18.7% and net income up 23.1%.
- The Special Purpose Truck business anticipates YoY profit growth, driven by selling price hikes and normalized production activity.
- The Aircraft business expects increased orders and production volumes for Boeing components, despite a temporary lull in production.
Business Breakdown: HP Adhesives- Building a Brand or Battling Giants
- HP Adhesives has expanded its product portfolio with high-growth categories like silicone sealants and diversified into high-margin niches such as epoxy putties, strengthening its market position.
- The company’s strategic distribution expansion, along with product innovation, aligns well with the growing demand in the Indian adhesives market, positioning HPAL for sustainable growth across various sectors.
- While facing challenges like raw material price volatility and competition from market leaders, HPAL’s strong capacity expansion and focus on high-margin products indicate significant potential for long-term value creation.
CG Power: Strong Execution, Strategic Expansion, and Long-Term Growth Visibility
- Consolidated revenue grew 23% YoY to Rs9,999 crore; PBT margin at 13.6%; order backlog rose 66%, supported by broad-based growth across key segments.
- Capacity expansions in transformers and semiconductors, export growth initiatives, and investments in consumer products and railway systems are key strategic priorities over FY26–FY28.
- Trading at 73–77x FY26E P/E; management targets sustained growth, high ROCE, and diversification, supporting a long-term compounding opportunity.
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