Daily Brief Industrials: Takasago Thermal Engineering, Contemporary Amperex Technology (CATL), Renewi, Semiconductor Manufacturing International Corp (SMIC), Ametek Inc, Aegis Vopak Terminals Ltd, Talgo SA, Kondotec Inc, Ichiken Co Ltd and more

• Takasago Thermal Engineering (1969 JP) reported Q3 earnings today. Revs up tiny yoy over 9m. OP +13%, Net +18.2%. Progression a bit behind guidance for full-year (but guidance unchanged)
• Orders received and carried forward a record high. Margins up. DX/etc investments up. Crossholdings down but still HUGE outbound/in-bound. Goal is to shrink from 20% of net assets to 15%.
• Today the company announced some crossholders would sell ~5% of shares out, and the company would launch a buyback for half that. Meh…

• Contemporary Amperex Technology (CATL) is getting ready to complete its IPO on the Hong Kong exchange. CATL is expected to raise at least US$5 billion.
• CATL maintained its 36.8% share in the global EV battery market in 2023 and January to November 2024. CATL has excellent fundamentals and improving profit margins. 
• Major risk factors include additional tariffs by the US, recent addition to Pentagon’s blacklist, declining sales in 2024, and lower government subsidies for EVs globally. 

• Macquarie’s Bid for Renewi: Macquarie-led consortium offers 870p per share, valuing Renewi at £707 million, a 57% premium to the pre-offer price, with the deal structured as a scheme of arrangement.
• Regulatory and Shareholder Support: 21.1% of Renewi shareholders, including major investors and directors, have given irrevocable undertakings to support the deal, pending approvals from EU, Belgian, and Chinese regulators.
• Investment Outlook: At 853p, the gross spread is 2.0%, with an annualized return of ~5.5% if completed by Q2 2025. Market implies a 94.3% probability of success (break price 554p).

• A group of shareholders are looking to raise US$118m from selling their respective stakes in Takasago Thermal Engineering (1969 JP) .
• While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Media reports of a sharp decline in profit linked to trade tensions are not correct. Gross, operating and total net profit all increased from 1Q to 4Q of 2024.
• Management’s guidance for 1Q of 2025 has sales growth accelerating to 6% to 8% and the gross margin remaining relatively high at 19% to 21%. This looks reasonable.
• But the shares are near their all-time high and too expensive to chase given the potential negative impact of President Trump’s trade policy. Take profits.

• Ametek is a niche manufacturer of highly engineered products across a broad range of end markets
• Ametek’s major end markets include Medtech, aerospace/defense, power, automotive, semis/RD, and industrial, with significant diversification

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Aegis Vopak Terminals Ltd (1902844D IN)  is looking to raise about US$415m in its upcoming India IPO.
• Aegis Vopak (AV) is the largest Indian third-party owner and operator (in terms of storage capacity) of tank storage terminals for liquified petroleum gas (LPG) and liquid products.
• In this note, we look at the firm’s past performance.

• Government-Backed Takeover: The Spanish Government blocked Pesa’s €5 per share bid, clearing the way for Sidenor’s lower €4.8 per share offer, aligning with Basque industrial and political interests.
• Political Motivations: The intervention is driven by the Spanish Government’s need for Basque nationalist party support in Congress, favoring a regional industrial consolidation over foreign investment.
• Recommendation Downgrade: With the removal of competitive bidding, Talgo’s valuation should revert to sector multiples, leading to a SELL recommendation and an estimated fair value of €2.50 per share.

• Sales increased 3.4% YoY to JPY59.9bn, driven by growth in Electrical Equipment and Scaffolding Installation segments.
• Operating profit decreased 5.0% YoY to JPY3.4bn, impacted by flat gross profit margin and increased SG&A expenses.
• Net income attributable to owners decreased 0.8% YoY, with improved extraordinary gains from investment securities sales.

• Ichiken’s cumulative Q3 FY03/25 revenue was JPY78.2bn, operating profit JPY5.4bn, and net income JPY3.6bn, with YoY increases.
• Orders in the construction business decreased 1.6% YoY to JPY75.8bn, with private sector orders at JPY75.6bn.
• Ichiken projects FY03/25 revenue of JPY98.0bn and plans a dividend of JPY140 per share, including a commemorative dividend.