Daily Brief Industrials: Uchi Technologies, Ohba Co Ltd, Deere & Co and more

In today’s briefing:

Uchi Technologies: Q2 2023 Upgrade of Guidance a Positive
4Q Follow-Up – Ohba (9765 JP)
Deere & Company: Can The Smart Apply Acquisition Prove To Be A Real Growth Catalyst? – Major Drivers

Uchi Technologies: Q2 2023 Upgrade of Guidance a Positive

Uchi Technologies (UCHI MK) results significant highlight was an upgrade in USD revenue for FY23 from “flat” in Q1 2023 to “high single-digit growth” in Q2 2023.
Operating margins expanded owing to the depreciating ringgit YoY/QoQ by 350/480 bps to 61.6%. Unfortunately, the increasing effective tax rate (3.5% to 23.7%) resulted in a 13.7% YoY PAT decline.
With >60% ROCEs, 12x FY23e PE multiple, and a 7.2% dividend yield, this is a stock to keep on your watchlist.

Since reporting its full-year results for FY23/5, OHBA shares have been rerated and its share price is up approximately 20% at the time of writing.
In its five-year medium-term management plan ending in FY28/5, the company has set ambitious earnings targets (sales CAGR of 5.0%, operating profit CAGR of 7.0%) and a policy committed to capital efficiency (ROE 12%, ROIC 12%).
In addition, the company has further strengthened its shareholder return policy (targeting a total return ratio of 60%), which has been one of the best among listed construction consulting companies, and this has likely driven the rerating to some extent.

Deere & Company delivered a solid result and managed an all-around beat in the last quarter.
Deere & Company demonstrated resilience amid healthy agricultural fundamentals, maintaining a whole order book and positive customer sentiment that drove a solid close to fiscal year 2023.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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