INDUSTRIALS Archives | Page 144 of 294 | Smartkarma

• CIMC Vehicle Group Co Ltd (1839 HK) possible H Share buyback offer, excluding China International Marine Cntnrs Gp (2039 HK)’s shares, is HK$7.00, an 8.7% premium to the undisturbed price. 
• The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition.
• The offer is light, but independent H shareholders holding blocking stakes will likely be supportive. The final offer will be made on “same or better terms”, suggesting a potential bump.

• CIMC Vehicles (1839 HK) is currently suspended pursuant to Hong Kong’s Code on Takeovers and Mergers.
• SOE-Backed CIMC Group controls ~74% of CMIC Vehicle’s H-shares. Presumably, if any Offer was to unfold, it would be from the parent.
• And what price for the H-shares? Around HK$9/share, a life-time high, would be in keeping with premiums seen in precedent PRC-incorporated privatisations. 

• After CIMC Vehicle Group Co Ltd (1839 HK) was suspended yesterday pursuant to Hong Kong’s Takeover Code, the expectation was an H-share Offer from its parent, SOE-backed CIMC Group.
• CIMC subsequently announced an indicative Offer yesterday evening, from its parent, at a $7.00/share for each H-share, a pitiful 8.6% premium to last close. There is no concurrent A-share Offer.
• CIMC traded around $7.00 late September, and comfortably traded through the indicative terms for most of July. 

• BeeX, a Singapore-based maker of autonomous underwater robots, has raised US$2 million in a round co-led by Earth Venture Capital and ShipsFocus Ventures.
• The startup will use the funds to speed up its go-to-market efforts for autonomous offshore wind farm inspections in Europe.
• BeeX was established in 2018 by Grace Chia and Goh Eng Wei, researchers at the National University of Singapore.

• We are bullish on Recruit at the current share price and believe that the stock has around 40% upside potential to our fair value estimate of Y7,700.
• We believe that investors have been overly concerned with the cyclical slowdown in the job market as it normalizes from the post-Covid recovery
• Indeed.com remains a disruptor in the HR recruiting market and the potential monetization of this asset is significantly under-appreciated by the market.

• Wuxi Lead Intelligent Equipmen (300450 CH) is looking to raise around US$300m in its upcoming Switzerland GDR listing.
• As per media reports, Wuxi Lead was said to be looking to raise US$495m via a Swiss GDR issuance, having secured approval to sell up to 78.3m shares.
• Given the decline in its share price over the year, the eventual deal size could come to around US$300m as of its current last close.

• Full Truck Alliance reported strong growth in Q3, from the right sources
• Improved sales mix & progress on expense control lifted core margins
• With 22% upside to US$9.5 based on 21x PER, our high conviction pick

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Forgital’s ESG as “Adequate”, in line with its Social and Governance scores. The company has a “Weak” score for the Environmental pillar. Controversies are “Immaterial” and Disclosure is “Adequate”. 
• Forgital is a vertically integrated company that focuses on manufacturing forged components for the aerospace and industrial markets.

• October’s industry numbers hide pricing turmoil seen at company level
• STO Express appears to be using price to gain share from Yunda, others
• We believe price competition continues to hurt ‘ground’ express margins

• QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys, and Sortify.tm.
• It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market, and has a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
• The company has provided a trading update at its annual general meeting (AGM) noting that revenue and earnings (EBITDA) to the end of October were well ahead of last year and ahead of budget. 

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Atalian’s ESG as “Adequate”, in line with its Social score. The company has “Weak” scores for the Environmental and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”. 
• French building-services management company Atalian offers a range of facility management and cleaning services. 

• We are bullish on Recruit at the current share price and believe that the stock has around 40% upside potential to our fair value estimate of Y7,700.
• We believe that investors have been overly concerned with the cyclical slowdown in the job market as it normalizes from the post-Covid recovery
• Indeed.com remains a disruptor in the HR recruiting market and the potential monetization of this asset is significantly under-appreciated by the market.

• Wuxi Lead Intelligent Equipmen (300450 CH) is looking to raise around US$300m in its upcoming Switzerland GDR listing.
• As per media reports, Wuxi Lead was said to be looking to raise US$495m via a Swiss GDR issuance, having secured approval to sell up to 78.3m shares.
• Given the decline in its share price over the year, the eventual deal size could come to around US$300m as of its current last close.

• Full Truck Alliance reported strong growth in Q3, from the right sources
• Improved sales mix & progress on expense control lifted core margins
• With 22% upside to US$9.5 based on 21x PER, our high conviction pick

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Forgital’s ESG as “Adequate”, in line with its Social and Governance scores. The company has a “Weak” score for the Environmental pillar. Controversies are “Immaterial” and Disclosure is “Adequate”. 
• Forgital is a vertically integrated company that focuses on manufacturing forged components for the aerospace and industrial markets.

• October’s industry numbers hide pricing turmoil seen at company level
• STO Express appears to be using price to gain share from Yunda, others
• We believe price competition continues to hurt ‘ground’ express margins

• QANTM Intellectual Property Ltd (ASX:QIP) owns a group of intellectual property (IP) services businesses operating under the independent brands of Davies Collison Cave (DCC), FPA Patent Attorneys, and Sortify.tm.
• It is a major player in the mature and regulated Australian patent, trade marks and IP legal services market, and has a diversified mix of local and foreign clients (~45%/55% split; ~50% US$ revenue).
• The company has provided a trading update at its annual general meeting (AGM) noting that revenue and earnings (EBITDA) to the end of October were well ahead of last year and ahead of budget. 

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Atalian’s ESG as “Adequate”, in line with its Social score. The company has “Weak” scores for the Environmental and Governance pillars. Controversies are “Immaterial” and Disclosure is “Adequate”. 
• French building-services management company Atalian offers a range of facility management and cleaning services. 

• Following 2Q24 , our operating profit of S$2.9bn and a net profit of S$2.6bn, stand considerably higher than consensus of S$2.5bn and S$2.3bn respectively. 
• SIA’s continue to suffer more inflation than most peers (ex-Qantas). However, 1H24 illustrated that continued restoration of capacity is diluting pressure and narrowing the gap to peers.
• The true test for SIA will be management of normalizing profitability beyond FY24. We model operating profit of S$1.8bn/net profit of S$1.5bn in FY25, versus consensus of S$1.5bn/S$1.2bn.

• Following 2Q24 , our operating profit of S$2.9bn and a net profit of S$2.6bn, stand considerably higher than consensus of S$2.5bn and S$2.3bn respectively. 
• SIA’s continue to suffer more inflation than most peers (ex-Qantas). However, 1H24 illustrated that continued restoration of capacity is diluting pressure and narrowing the gap to peers.
• The true test for SIA will be management of normalizing profitability beyond FY24. We model operating profit of S$1.8bn/net profit of S$1.5bn in FY25, versus consensus of S$1.5bn/S$1.2bn.

• All positives from management: strong demand, loads and yields strong, cargo improving, costs are high but can cope, big profits coming but have to redeem preference shares  
• The near-term future is a golden runaway for Cathay Pacific. All the parameters are in the right place and we think this will persist until 1H-2024 at the very least 
• Cathay Pacific is a value BUY, our target price of HK$9.90 (+21% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP). 

• In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000/share.
• Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
• In this note, we will talk about the company’s past performance and future prospects.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Agung Podomoro Land
2. China Jinmao Holdings
3. Geely Auto
4. First Pacific Co
5. Reliance Industries

and more…

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Modulaire’s ESG as “Adequate”, in line with its Governance score. The Environmental and Social scores are “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Modulaire is a leading pan-European service provider of modular space, remote accommodation and portable storage solutions, with a fleet comprising c. 267 k units.

• All positives from management: strong demand, loads and yields strong, cargo improving, costs are high but can cope, big profits coming but have to redeem preference shares  
• The near-term future is a golden runaway for Cathay Pacific. All the parameters are in the right place and we think this will persist until 1H-2024 at the very least 
• Cathay Pacific is a value BUY, our target price of HK$9.90 (+21% UPSIDE) implies 10x FY2024 PE, parity multiple against its arch-rival Singapore Airlines (SIA SP). 

• In Oct 23, Doosan Robotics (454910 KS) raised around US$318m through its Korean IPO, after pricing the IPO at the top end of the range at KRW26,000/share.
• Doosan Robotics (DR) manufactures and sells collaborative robots (Cobots). The firm’s product portfolio primarily includes different series of robot arms as well as its coffee module.
• In this note, we will talk about the company’s past performance and future prospects.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Agung Podomoro Land
2. China Jinmao Holdings
3. Geely Auto
4. First Pacific Co
5. Reliance Industries

and more…

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Modulaire’s ESG as “Adequate”, in line with its Governance score. The Environmental and Social scores are “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Modulaire is a leading pan-European service provider of modular space, remote accommodation and portable storage solutions, with a fleet comprising c. 267 k units.

• There will be 7 additions and 7 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) at the December rebalance that will be implemented on 14 December.
• The rebalance is on expected lines, though the index committee decided not to add Youngpoong Paper (006740 KS) to the index. Not really a big surprise given the price move.
• HDC Hyundai Development Co-Engineering & Construction (294870 KS) is a surprise delete and there is not much short interest that could cover against the passive selling.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone
• Agung Podomoro Land

• LX International announced today that it will not participate in the main bidding to acquire HMM Co.
• This is likely to have a positive impact on LX International’s share price as many investors are relieved that company will not raise excessive amounts of capital to acquire HMM.
• In addition, by not acquiring HMM, LX International has enough financial resources to continue to pay high dividends. 

• BOC Aviation (2588 HK) (BOCA) is the highest-quality aircraft leasing company, with a young asset portfolio, quality clientele, cheapest credit facility, and superb risk management.      
• Outlook is attractive, strong demand and scarce supply ensures high lease rates and profits. Asset disposals have all recorded a healthy surplus, a potential earnings surprise. 
• Our TP of HKD70/share implies 0.94x FY24 (22% UPSIDE) potential 

• Cirrus Aircraft (0153126D US) is looking to raise up to US$200m in its upcoming HK IPO.
• Cirrus Aircraft designs, develops, manufactures, and sells premium aircrafts. Its two aircraft product lines, the SR2X Series and the Vision Jet, are currently certified and validated in over 60 countries.
• We had covered the company’s performance in our earlier notes. In this note, we talk about its PHIP updates.

• Amaero International Ltd (ASX:3DA) is a global specialist in advanced materials manufacturing for the defence, aerospace, and other industrial sectors.
• The company is developing a 1,000+-tonne-a-year critical metals alloy powder manufacturing facility in Tennessee, USA with its initial focus on producing refractory alloy powder, C103, a critical metal powder used in hypersonics weaponry.
• The company has raised A$10m from new and existing institutional and sophisticated shareholders at $0.16/share, representing a 15.8% discount to the last traded price prior to the raise. 

• There will be 7 additions and 7 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) at the December rebalance that will be implemented on 14 December.
• The rebalance is on expected lines, though the index committee decided not to add Youngpoong Paper (006740 KS) to the index. Not really a big surprise given the price move.
• HDC Hyundai Development Co-Engineering & Construction (294870 KS) is a surprise delete and there is not much short interest that could cover against the passive selling.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone
• Agung Podomoro Land

• LX International announced today that it will not participate in the main bidding to acquire HMM Co.
• This is likely to have a positive impact on LX International’s share price as many investors are relieved that company will not raise excessive amounts of capital to acquire HMM.
• In addition, by not acquiring HMM, LX International has enough financial resources to continue to pay high dividends. 

• BOC Aviation (2588 HK) (BOCA) is the highest-quality aircraft leasing company, with a young asset portfolio, quality clientele, cheapest credit facility, and superb risk management.      
• Outlook is attractive, strong demand and scarce supply ensures high lease rates and profits. Asset disposals have all recorded a healthy surplus, a potential earnings surprise. 
• Our TP of HKD70/share implies 0.94x FY24 (22% UPSIDE) potential 

• Cirrus Aircraft (0153126D US) is looking to raise up to US$200m in its upcoming HK IPO.
• Cirrus Aircraft designs, develops, manufactures, and sells premium aircrafts. Its two aircraft product lines, the SR2X Series and the Vision Jet, are currently certified and validated in over 60 countries.
• We had covered the company’s performance in our earlier notes. In this note, we talk about its PHIP updates.

• Amaero International Ltd (ASX:3DA) is a global specialist in advanced materials manufacturing for the defence, aerospace, and other industrial sectors.
• The company is developing a 1,000+-tonne-a-year critical metals alloy powder manufacturing facility in Tennessee, USA with its initial focus on producing refractory alloy powder, C103, a critical metal powder used in hypersonics weaponry.
• The company has raised A$10m from new and existing institutional and sophisticated shareholders at $0.16/share, representing a 15.8% discount to the last traded price prior to the raise. 

• Price momentum in October was negative, but decline moderated somewhat
• Disparate Q3 profitability trends reported by Maersk, Evergreen, and ZIM 
• As sentiment weakens (again), we also see signs of a cyclical bottom

• Sunpower reported 9M23 results which showed the company performing strongly as a 100% GI business.
• Revenues +15% and EBITDA +46% YoY. Earlier this month a competitor listed in China at a massive premium to Sunpower’s valuation.
• The uncertainty over the CB due in April 2025 will be an overhang but management believes there are multiple ways to resolve this in FY2024.

• Our base case valuation of DS Dansuk is 113,948 won per share which is 28% higher than the high end of the IPO price range (89,000 won). 
• We estimate bio energy to account for 64.7% of total sales, followed by battery recycle (21.5%), plastic recycle (6.7%), and others (7.1%) in 2023. 
• DS Dansuk is an eco-friendly company with three core businesses including bio energy, battery recycling, and plastic recycling.

Following the release of the delayed, but in-line FY23 results covering the period to February 2023, trading in Braemar shares recommenced on 21 November. Now that the internal investigation into the accounting treatment of historical transactions has concluded, Braemar is due to release its H124 results on 29 November. The company remains well-positioned to drive its future growth strategy, as previously outlined. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying profit estimate for FY24 and trimmed it for FY25, but retain our 520p/sh valuation.