Daily Brief Industrials: Sany Heavy Industry, Woodside Energy Group Ltd, Orient Overseas International, Mitsubishi Electric and more

• Sany Heavy Industry (600031 CH) could raise up to HK$16.35bn (US$2.1bn) in its H-share listing if the Offer Size Adjustment Option and the Overallotment Option are both exercised.
• There is a big allocation to cornerstone investors that is locked up for 6 months. That eliminates the already small possibility of Fast Entry inclusion to global indexes.
• Sany Heavy (6031 HK) should be added to Southbound Stock Connect from the open of trading on 24 November following the end of the Price Stabilisation period.

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently elevenpair trade opportunities across three markets and seven sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Price momentum and volume growth both remained weak in September 
• Mideast ceasefire raises possibility of Suez Canal re-opening in 2026
• Expect pricing to remain weak; Suez re-start would likely lead to losses

• Mitsubishi Electric is pivoting its strategic focus towards high-growth digital and green technologies, exemplified by its ‘Serendie’ digital innovation platform and the recent acquisition of cybersecurity firm Nozomi Networks. This is intended to build on its established strengths in factory automation and automotive equipment.
• The company is targeting significant revenue growth from these new digital ventures, aiming for ¥1.1 trillion from Serendie-related initiatives by FY2031. This strategy is supported by heavy investment in AI and a planned tripling of its digital innovation workforce.
• While demonstrating strong recent growth and market momentum, the company faces considerable execution risks. These include integrating new acquisitions, competing with established digital platforms from rivals like Siemens and Hitachi, and navigating macroeconomic uncertainties such as currency volatility and potential tariffs.

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