INDUSTRIALS Archives | Page 147 of 294 | Smartkarma

• Although not explicitly outlined, it appears practical to interpret that we should filter out stocks that have entered a trading suspension among those receiving a WARNING designation.
• The dynamics of KOSPI 200 flow trading have become notably tumultuous due to the abrupt short selling ban and additional liquidity halts imposed on market makers in the futures market.
• The manifestation of price impact due to passive flows may be significantly delayed. So, we should prepare for this week’s announcement day setup targeting the delayed impact of passive flows.

• The HSI INDEX last week closed down (CC=-1), down for 3 months (almost 4), quite OVERSOLD and not in sync with the general “rally” (read: rebound) in other markets.
• LONG support for this week is between Q3 and Inner Fence levels: 16800-16300 area, but the current pattern behavior is not really encouraging LONG trades.
• Wait-And-See approach recommended before investment in HSI stocks, but if the index dives for the next 2 weeks it may be the right time to buy for a Christmas rally…

• The share price has risen by more than 20% in the past month as 1H results beat guidance, FY guidance was raised and the yen weakened.
• The 2-for-1 stock split may also have attracted retail investors. But the new FY guidance implies lower 2H guidance. 
• The outlook is for higher but volatile sales and profits. Valuations are reasonable but not compelling. Wait for a pullback.

• Deere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services.
• The Production and Precision Agriculture segment provides mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters, harvesting front-end equipment, sugarcane loaders, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers.
• The Small Agriculture and Turf segment offers utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn equipment, commercial mowing equipment, golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications; other outdoor power products; and hay and forage equipment. 

• Reports emphasizing that SMIC fell short of 3Q expectations don’t make much sense. The real test starts this quarter with 7nm smart phone processors for Huawei in mass production.
• Profits are under pressure from low capacity utilization, rising depreciation and continued high investment. Cash flow is adequate. The balance sheet is sound.
• The share price dropped 6.8% on Friday after rising 44% from late August to early November. 4Q guidance points to near-zero operating and net profit. Recovery will take time.

• Last week, as Ps Mitsubishi Construction (1871 JP) reported earnings, Taisei Corp (1801 JP) announced a Partial Offer for PS Mitsubishi, buying out Ube Cement & Taiheiyo Cement stakes.
• Partial offers have recently traded well before the close, and badly after the result. As we near year-end, this one could trade a bit softer, suggesting a lower back end.
• Shareholder Structure, Pro-ration analysis, and back end calculation grids below. 

• Reports emphasizing that SMIC fell short of 3Q expectations don’t make much sense. The real test starts this quarter with 7nm smart phone processors for Huawei in mass production.
• Profits are under pressure from low capacity utilization, rising depreciation and continued high investment. Cash flow is adequate. The balance sheet is sound.
• The share price dropped 6.8% on Friday after rising 44% from late August to early November. 4Q guidance points to near-zero operating and net profit. Recovery will take time.

• Last week, as Ps Mitsubishi Construction (1871 JP) reported earnings, Taisei Corp (1801 JP) announced a Partial Offer for PS Mitsubishi, buying out Ube Cement & Taiheiyo Cement stakes.
• Partial offers have recently traded well before the close, and badly after the result. As we near year-end, this one could trade a bit softer, suggesting a lower back end.
• Shareholder Structure, Pro-ration analysis, and back end calculation grids below. 

• WT Microelectronics (3036 TT) major shareholder, WPG Holdings (3702 TT), seeks to raise up to approximately NT5.15bn (US$159m) through a secondary block deal, selling approximately 40m shares (4.5% of TSO). 
• The deal is a small one to digest at 3.6 days of three month ADV and 4.1% of current mcap.
• In this note, we will talk about the placement and run the deal through our ECM framework.

With weaker end demand than originally expected in Q323, XP Power’s trading update confirmed a lower outlook for FY23 operating profit and a consequent rise in net debt. To mitigate the risk of hitting debt covenants, the company has initiated a series of cost and cash saving measures, renegotiated its debt covenants and undertaken a fundraise. With revised debt covenants in place and reduced gearing, we believe XP is now well positioned for growth as end market conditions improve.

• 3Q23 revenue of $0.2 million was slightly below expectations, but EPS was slightly better than expected at a loss of $0.05 versus consensus of a loss of $0.06.
• CEO Matt Fisch said, “the lidar market has shifted from a ‘battle for the best technology’ to a ‘battle for the best path to commercialization.’”
• Fisch continues to be bullish and upbeat as AEye’s technology continues to win awards.

• WT Microelectronics (3036 TT) major shareholder, WPG Holdings (3702 TT), seeks to raise up to approximately NT5.15bn (US$159m) through a secondary block deal, selling approximately 40m shares (4.5% of TSO). 
• The deal is a small one to digest at 3.6 days of three month ADV and 4.1% of current mcap.
• In this note, we will talk about the placement and run the deal through our ECM framework.

With weaker end demand than originally expected in Q323, XP Power’s trading update confirmed a lower outlook for FY23 operating profit and a consequent rise in net debt. To mitigate the risk of hitting debt covenants, the company has initiated a series of cost and cash saving measures, renegotiated its debt covenants and undertaken a fundraise. With revised debt covenants in place and reduced gearing, we believe XP is now well positioned for growth as end market conditions improve.

• 3Q23 revenue of $0.2 million was slightly below expectations, but EPS was slightly better than expected at a loss of $0.05 versus consensus of a loss of $0.06.
• CEO Matt Fisch said, “the lidar market has shifted from a ‘battle for the best technology’ to a ‘battle for the best path to commercialization.’”
• Fisch continues to be bullish and upbeat as AEye’s technology continues to win awards.

• INCJ aims to raise around US$1.8bn via a secondary sell-down in Renesas Electronics (6723 JP). This will be a clean-up trade as INCJ has been paring down its stake. 
• The deal is a slightly large one to digest at 12 days of three month ADV and around 6% of current mcap.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Ps Mitsubishi Construction (1871 JP)/PSMIC announced a partial tender offer for Taisei Corp (1801 JP) at JPY1,010 per share, a 22.4% premium to the undisturbed price. 
• The partial offer is for a minimum of 20.4 million shares (42.94% ownership ratio) and a maximum of 23.8 million shares (50.20% ownership ratio). 
• Irrevocables represent a 42.94% ownership ratio, satisfying the minimum acceptance condition. The offer is attractive and represents a ten-year high. The tender offer runs from 10 November to 11 December.

• Ecoeye announced that the IPO price has been determined at 34,700 won, which is at the high end of the IPO price range. The demand ratio was 75 to 1.
• An 81.1% of the IPO shares applied thought that the company’s value is more than 34,700 won per share. The IPO offering amount is 72 billion won.
• Our base case valuation of Ecoeye IPO is 45,421 won per share (31% higher than the IPO price). Given the solid upside, we have a positive view of Ecoeye IPO. 

• INCJ aims to raise around US$1.8bn via a secondary sell-down in Renesas Electronics (6723 JP). This will be a clean-up trade as INCJ has been paring down its stake. 
• The deal is a slightly large one to digest at 12 days of three month ADV and around 6% of current mcap.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Ps Mitsubishi Construction (1871 JP)/PSMIC announced a partial tender offer for Taisei Corp (1801 JP) at JPY1,010 per share, a 22.4% premium to the undisturbed price. 
• The partial offer is for a minimum of 20.4 million shares (42.94% ownership ratio) and a maximum of 23.8 million shares (50.20% ownership ratio). 
• Irrevocables represent a 42.94% ownership ratio, satisfying the minimum acceptance condition. The offer is attractive and represents a ten-year high. The tender offer runs from 10 November to 11 December.

• Ecoeye announced that the IPO price has been determined at 34,700 won, which is at the high end of the IPO price range. The demand ratio was 75 to 1.
• An 81.1% of the IPO shares applied thought that the company’s value is more than 34,700 won per share. The IPO offering amount is 72 billion won.
• Our base case valuation of Ecoeye IPO is 45,421 won per share (31% higher than the IPO price). Given the solid upside, we have a positive view of Ecoeye IPO. 

• Recruit Holdings (6098 JP)  reported 2QFY03/2024 results today. Revenues decreased YoY due to decline in HR Tech revenues, while operating profit for the quarter increased YoY. OP missed consensus marginally.
• As we expected, the new pricing model has negatively impacted HR Tech revenues, and the segment’s earnings are forecast to decline further going into the second half.
• There is further downside to earnings and the company’s share price has moved up during the last few days, and we are set to nicely gain on the Short side.

• Jyoti CNC Automation (0907734D IN) plans to come up with ~INR 10 bn IPO
• JCAL is an established player in manufacturing of metal cutting CNC machines, mostly in 5-Axis category. It has 8% market share in India and is 12th largest global player.
• Even though JCAL has bright order book visibility, it remains unprofitable, largely because of concerns with subsidiaries.

• Recruit Holdings (6098 JP)  reported 2QFY03/2024 results today. Revenues decreased YoY due to decline in HR Tech revenues, while operating profit for the quarter increased YoY. OP missed consensus marginally.
• As we expected, the new pricing model has negatively impacted HR Tech revenues, and the segment’s earnings are forecast to decline further going into the second half.
• There is further downside to earnings and the company’s share price has moved up during the last few days, and we are set to nicely gain on the Short side.

• Jyoti CNC Automation (0907734D IN) plans to come up with ~INR 10 bn IPO
• JCAL is an established player in manufacturing of metal cutting CNC machines, mostly in 5-Axis category. It has 8% market share in India and is 12th largest global player.
• Even though JCAL has bright order book visibility, it remains unprofitable, largely because of concerns with subsidiaries.

• In this insight, we discuss near-term momentum trading opportunities among the top 50 stocks in KOSPI with highest short interest ratios.
• Given the recent temporary ban on stock short selling in Korea, there is likely to be increased volatility in the stock market. 
• We have identified 10 companies in particular that have high short interest ratios, among the worst performing stocks YTD, but with strongest share price performance in the past two days.

• 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, and provided confirmation at its Annual General Meeting last week that it anticipated that on just one eight-hour shift a day the first EIGA gas atomiser, dedicated to the refractory alloy powder, C103 (niobium 89%, hafnium 10%, -titanium 1%), should be able to generate north of A$100m a year in revenue.
• The Chairman and CEO Hank Holland also noted that as demand for C-103 ramps, Amaero will utilise excess production capacity to produce high-value, specialty alloy powders for next-generation defence systems.