Daily Brief Industrials: Nidec Corp, Sany Heavy Industry, Westinghouse Electric Company, Honeywell International, Kosaido, United Tractors, CTR Holdings, Delek US Holdings and more

• The JPX has designated Nidec Corp (6594 JP) as a ‘Security on Special Alert’ due to a disclaimer of opinion in the annual report (among other issues).
• Nikkei has announced the deletion of Nidec Corp (6594 JP) from the Nikkei 225 (NKY INDEX). Ibiden Co Ltd (4062 JP) will be added to the index.
• Nidec Corp (6594 JP) should also be deleted from the TSE Tokyo Price Index TOPIX (TPX INDEX). Both index deletions should take the stock a lot lower from here.

• Sany Heavy Industry (600031 CH) priced its H Share at HK$21.30 to raise HK$13,453 million (US$1.7 billion) in gross proceeds. The H Share will be listed tomorrow.
• I discussed the H Share listing in SANY Heavy Industry H Share Listing: The Investment Case and SANY Heavy Industry H Share Listing (6031 HK): Valuation Insights. 
• Sany’s international oversubscription rates were above the median of recent large AH listings. The AH discount remains reasonable.

• Sany Heavy Industry (600031 CH), raised around US$2.0bn in its H-share listing.
• Sany Heavy Industry was the world’s third largest and China’s largest construction machinery company in terms of construction machinery’s cumulative revenue from 2020 to 2024, according to Frost & Sullivan.
• We have looked at the past performance and valuation in our previous note. In this note, we talk about the trading dynamics.

• Japanese markets are seeing significant developments, including Nikkei 225 rebalancing with Nidec’s removal due to alert and Ibiden’s addition, impacting tracking funds, delta one trading strategies, and investors with position.
• The BoJ’s cautious normalization path continues to shape the JGB curve, with a notable steepening in the long end affecting asset-liability management.
• We detail the trades and execution of the trade idea, which may require special attention this week especially on the rebalance.

• Westinghouse Air Brake Technologies Corporation (Wabtec) reported strong financial results for the third quarter of 2025, showcasing significant growth in various operational metrics and continued strategic progress.
• The company’s performance was characterized by an 8% increase in sales compared to the previous year, reaching $2.9 billion.
• Both the Freight and Transit segments contributed to this growth, bolstered by the acquisition of Inspection Technologies at the beginning of the quarter.

• Honeywell will complete the tax-free spin-off of its Advanced Materials division as Solstice Advanced Materials Inc. (Nasdaq: SOLS) on October 30, 2025.
• We value HON(ex-SOLS) at $228/share on a SOTP basis. We value Solstice at $60/share based on 10.9× FY2026E EBITDA of $1.0B, implying ~31% upside to the when-issued price of $45.75
• SOLS has greater upside potential at current levels. Given its smaller market capitalization, index rebalancing flows post-listing could trigger near-term technical selling pressure, which may provide even better entry point.

• Kosaido is undergoing a significant business transformation, shifting its focus from the mature printing industry to high-growth areas, particularly the funeral services and asset consulting businesses. This strategic pivot is driven by Japan’s aging population, which presents a substantial market opportunity for end-of-life services.
• The Funeral Services segment, operated through its subsidiary Tokyo Hakuzen, is the primary growth engine. Holding a dominant market share of cremations in Tokyo’s 23 wards, the company is well-positioned to capitalize on the increasing mortality rate. Expansion of funeral hall capacity is a key pillar of their growth strategy.
• While the legacy Information (printing) and Human Resources segments face challenges, management is focused on cost optimization and a return to profitability. The nascent Asset Consulting business, which provides inheritance-related services, is a promising high-margin venture that leverages synergies with the funeral business.

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Key points (machine generated)

• United Tractors, founded in 1972 and listed in 1991, is Indonesia’s largest heavy equipment distributor with exclusive rights for brands like Komatsu and Scania.
• The company provides sales, parts, assembly, and repair services, and has diversified into mining and renewable energy sectors.
• Its subsidiary PAMA leads in mining services, while United Tractors manages coal and gold mining assets and invests in renewable energy projects.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• CTR Holdings is a Singapore-based contractor specializing in structural engineering and wet architectural works, primarily serving public and private sector projects in Singapore.
• The company has demonstrated remarkable revenue and net income growth over the past three years, however, this has been accompanied by significant margin compression and a declining stock price.
• While the forward outlook for the construction sector in its key markets shows moderate growth, the industry is characterized by intense competition, rising costs, and sensitivity to economic cycles, posing significant risks to sustained profitability.

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Key points (machine generated)

• Delek owns 34.1 million units of DKL, representing 64% of its shares, below the threshold for a tax-free spin-off.
• The refineries are valued at approximately $505 million, with projected mid-cycle EBITDA of $455.1 million.
• Delek’s share price has potential for significant upside, with a favorable 3.5x risk-reward ratio as earnings improvements are expected.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.