INDUSTRIALS Archives | Page 148 of 294 | Smartkarma

Acquiring parent Alibaba’s express investments could soak up much of CaiNiao’s IPO proceeds
Such transfers would help Alibaba, but the potential benefit to CaiNiao is less clear
The transfers of these stakes could become an important aspect of CaiNiao’s IPO process

Maersk Q3: Estimates Met, Guidance Kept | But Downbeat Assessment of Market Sends Shares Down -17%

By Shifara Samsudeen, ACMA, CGMA

Container shipping giant Maersk met Q3 expectations and maintained earlier FY23 guidance
However, downbeat commentary combined with capex and job cuts sent shares -17% lower
Maersk does not expect any recovery in ’24, but we believe this pessimism already in prices

ASEAN EV Ecosystem Update: Progressing Towards a Robust EV Ecosystem

EV Adoption in ASEAN is low compared to developed markets, however, development of a robust EV ecosystem remains a primary goal for the respective nations.
Governments in the region continues to introduce new policy measures and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

ACCO: Sales Retraction Creates Headwinds

By Hamed Khorsand

ACCO reported third quarter results without the expected back to school benefit. Instead, ACCO focused on profitable sales helping to lift gross margin and report higher earnings results
Retailers continue to tightly manage their inventory levels and the trend is expected to remain in the fourth quarter.
ACCO remains a free cash flow investment story. We are not expecting growth in 2024 putting greater pressure on how much free cash flow ACCO can generate

HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report – Correction

This note corrects the version that was published on November 2. Due to errors in our model, the full-year estimate for 2024 was not calculated properly.
The correct full-year 2024 EPS estimate is $2.65.
We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.

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Nov 07

Daily Brief Industrials: Mitsubishi Heavy Industries, Cainiao Smart Logistics Network, AP Moeller – Maersk A/S, Greatech Technology, ACCO Brands, HNI Corp and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

MHI (7011) | Rockets and Renewables
CaiNiao Smart Logistics Pre-IPO Part 4 | Acquiring BABA’s Express Stakes Could Soak Up IPO Proceeds
Maersk Q3: Estimates Met, Guidance Kept | But Downbeat Assessment of Market Sends Shares Down -17%
ASEAN EV Ecosystem Update: Progressing Towards a Robust EV Ecosystem
ACCO: Sales Retraction Creates Headwinds
HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report – Correction

MHI (7011) | Rockets and Renewables

By Mark Chadwick

MHI reports impressive YoY growth in order intake, revenues, and profits across Energy Systems and Defense Equipment segments in Q2 2023.
Despite a 62% YTD stock price increase, strong order backlog and underlying drivers suggest resilience in a challenging economic climate.
The company benefits from global trends in decarbonization and increased national security spending, positioning itself as a leader in gas turbines and defense technology.

CaiNiao Smart Logistics Pre-IPO Part 4 | Acquiring BABA’s Express Stakes Could Soak Up IPO Proceeds

Acquiring parent Alibaba’s express investments could soak up much of CaiNiao’s IPO proceeds
Such transfers would help Alibaba, but the potential benefit to CaiNiao is less clear
The transfers of these stakes could become an important aspect of CaiNiao’s IPO process

Maersk Q3: Estimates Met, Guidance Kept | But Downbeat Assessment of Market Sends Shares Down -17%

By Shifara Samsudeen, ACMA, CGMA

Container shipping giant Maersk met Q3 expectations and maintained earlier FY23 guidance
However, downbeat commentary combined with capex and job cuts sent shares -17% lower
Maersk does not expect any recovery in ’24, but we believe this pessimism already in prices

ASEAN EV Ecosystem Update: Progressing Towards a Robust EV Ecosystem

EV Adoption in ASEAN is low compared to developed markets, however, development of a robust EV ecosystem remains a primary goal for the respective nations.
Governments in the region continues to introduce new policy measures and offer incentives to promote the sector, while companies continue to attract large investment to develop the EV market.
The four companies we looked at have reported earnings and we have discussed their latest results and our investment thesis.

ACCO: Sales Retraction Creates Headwinds

By Hamed Khorsand

ACCO reported third quarter results without the expected back to school benefit. Instead, ACCO focused on profitable sales helping to lift gross margin and report higher earnings results
Retailers continue to tightly manage their inventory levels and the trend is expected to remain in the fourth quarter.
ACCO remains a free cash flow investment story. We are not expecting growth in 2024 putting greater pressure on how much free cash flow ACCO can generate

HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report – Correction

This note corrects the version that was published on November 2. Due to errors in our model, the full-year estimate for 2024 was not calculated properly.
The correct full-year 2024 EPS estimate is $2.65.
We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.

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Nov 06

Daily Brief Industrials: Dongfang Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Dongfang Electric (1072 HK): We See an Opportunity

Dongfang Electric (1072 HK): We See an Opportunity

By Osbert Tang, CFA

The collapse in share price of Dongfang Electric (1072 HK) is too excessive. The concerns on margin and orders are overplayed and its latest financial result is solid.
Recurring profit surged 24.8% in 3Q23 and gross margin expanded both YoY and QoQ. For 9M23, new orders rose 19.2% to reach 98% of full-year FY22 level.
We estimate backlog at Rmb197bn, or 3x consensus FY23F revenue, and this provides excellent protection to forward earnings. Its 5.8x and 4.4x PERs are just too undervalued.

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Nov 06

Daily Brief Industrials: Dongfang Electric and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Dongfang Electric (1072 HK): We See an Opportunity

Dongfang Electric (1072 HK): We See an Opportunity

By Osbert Tang, CFA

The collapse in share price of Dongfang Electric (1072 HK) is too excessive. The concerns on margin and orders are overplayed and its latest financial result is solid.
Recurring profit surged 24.8% in 3Q23 and gross margin expanded both YoY and QoQ. For 9M23, new orders rose 19.2% to reach 98% of full-year FY22 level.
We estimate backlog at Rmb197bn, or 3x consensus FY23F revenue, and this provides excellent protection to forward earnings. Its 5.8x and 4.4x PERs are just too undervalued.

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Nov 04

Daily Brief Industrials: SK Square and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Exploring Fresh Flow Trading Prospects for SK Square: Targeting Exclusion from KOSPI 200 IT

Exploring Fresh Flow Trading Prospects for SK Square: Targeting Exclusion from KOSPI 200 IT

By Sanghyun Park

KRX did not acknowledge any business relevance between SK Square and the Semicon industry, leading to its exclusion from the KRX Semicon after the GICS change.
We should consider the strong possibility that this same approach will be applied in the upcoming December KOSPI 200 IT rebalancing.
If we observe a somewhat unusual downward trend in SK Square’s price from the 15th, this could be seen as a hint foretelling the announcement of SK Square’s exclusion.

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Nov 04

Daily Brief Industrials: SK Square and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Exploring Fresh Flow Trading Prospects for SK Square: Targeting Exclusion from KOSPI 200 IT

Exploring Fresh Flow Trading Prospects for SK Square: Targeting Exclusion from KOSPI 200 IT

By Sanghyun Park

KRX did not acknowledge any business relevance between SK Square and the Semicon industry, leading to its exclusion from the KRX Semicon after the GICS change.
We should consider the strong possibility that this same approach will be applied in the upcoming December KOSPI 200 IT rebalancing.
If we observe a somewhat unusual downward trend in SK Square’s price from the 15th, this could be seen as a hint foretelling the announcement of SK Square’s exclusion.

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Nov 03

Daily Brief Industrials: Keisei Electric Railway Co, Ventia, HNI Corp, Odyssey Marine Exploration and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric: Results Unimpressive, Yet Investor Activism Appeal Remains
Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok
HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report
Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly

Keisei Electric: Results Unimpressive, Yet Investor Activism Appeal Remains

By Oshadhi Kumarasiri

Keisei Electric Railway Co (9009 JP)‘s FQ2 earnings, released on October-31st, surpassed revenue and OP expectations, yet the company revised down its revenue and OP guidance by ¥8.8bn and ¥200m.
Despite this, the share price has surged over 10% in recent days, likely influenced by activist investor Palliser Capital’s interest and a significant 30% increase in annual dividend guidance.
However, during earnings, the company remained silent about the activist investor’s proposal to reduce its Oriental Land (4661 JP) ownership below 15%.

Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok

By Sumeet Singh

Ventia (VNT AU) (VSG)’s two largest shareholders, Apollo Global Management and CIMIC Group, aim to raise around US$174m via selling 11.7% of the company.
The two investors have pared their stake thrice this year and this will be the final cleanup sale. All the past deals have done ok.
In this note, we will talk about the deal dynamics.

HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report

We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.
Our sales estimates have moderated. Following the 3Q23 report, margins should be sustainably stronger.
HNI reported 3Q23 adjusted EPS of $0.93, $0.30 better than consensus. Sales were roughly in line.

Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly

We hosted a fireside chat with Chief Executive Officer and Chairman of the Board of Directors Mark D. Gordon.
This report contains a transcript of the fireside chat from October 12, 2023, which can be accessed on demand.
Deep roots and unique capabilities. Odyssey Marine Exploration, Inc. is a company with nearly 30 years of experience exploring and recovering deep-sea sites, amassing more than 24,000 hours of deep-sea experience, and exploring more than 74,000 square kilometers of the seafloor in the process.

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Nov 03

Daily Brief Industrials: Keisei Electric Railway Co, Ventia, HNI Corp, Odyssey Marine Exploration and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Keisei Electric: Results Unimpressive, Yet Investor Activism Appeal Remains
Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok
HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report
Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly

Keisei Electric: Results Unimpressive, Yet Investor Activism Appeal Remains

By Oshadhi Kumarasiri

Keisei Electric Railway Co (9009 JP)‘s FQ2 earnings, released on October-31st, surpassed revenue and OP expectations, yet the company revised down its revenue and OP guidance by ¥8.8bn and ¥200m.
Despite this, the share price has surged over 10% in recent days, likely influenced by activist investor Palliser Capital’s interest and a significant 30% increase in annual dividend guidance.
However, during earnings, the company remained silent about the activist investor’s proposal to reduce its Oriental Land (4661 JP) ownership below 15%.

Ventia Services Group Placement- Coming Ahead of Lockup but Is Well Flagged, past Deals Have Done Ok

By Sumeet Singh

Ventia (VNT AU) (VSG)’s two largest shareholders, Apollo Global Management and CIMIC Group, aim to raise around US$174m via selling 11.7% of the company.
The two investors have pared their stake thrice this year and this will be the final cleanup sale. All the past deals have done ok.
In this note, we will talk about the deal dynamics.

HNI Corporation – Raising Estimates Following Strong 3Q Earnings Report

We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.
Our sales estimates have moderated. Following the 3Q23 report, margins should be sustainably stronger.
HNI reported 3Q23 adjusted EPS of $0.93, $0.30 better than consensus. Sales were roughly in line.

Odyssey Marine Exploration, Inc. – Exploring and Developing Seabed Resources Responsibly

We hosted a fireside chat with Chief Executive Officer and Chairman of the Board of Directors Mark D. Gordon.
This report contains a transcript of the fireside chat from October 12, 2023, which can be accessed on demand.
Deep roots and unique capabilities. Odyssey Marine Exploration, Inc. is a company with nearly 30 years of experience exploring and recovering deep-sea sites, amassing more than 24,000 hours of deep-sea experience, and exploring more than 74,000 square kilometers of the seafloor in the process.

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Nov 02

Daily Brief Industrials: Polycab India , Hanwha Corporation, Shenzhen International, ZTO Express Cayman , Paccar Inc, Waste Management, General Electric , Ask Automotive, Illinois Tool Works, 3M Co and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

AMFI Stock Reclassification Preview (Dec 2023): HUGE Outperformance as Active and Passive Meet
Hanwha Corp: Updated NAV Analysis – Defense Assets Undervalued
Shenzhen Intl (152 HK): A Big Step Forward
The Four Listed Chinese Express Companies Suffered Significant Margin Erosion in Q323
PACCAR Inc: Does The Battery Revolution Imply A Possible Investment Opportunity? – Major Drivers
Waste Management: Recycling Tech Transforms Business! Inside their Next-Gen Sustainability Approach! – Major Drivers
General Electric Company: A Lucrative Strategy Of Future-Proof Investments Revealed! – Major Drivers
ASK Automotive Pre-IPO – Business Has Been Resilient, Although Concentration Risk Remains Elevated
Illinois Tool Works Inc.: Surge in China’s Automotive Segment – Unveiling Recent Big Winners! – Major Drivers
3M Company: How They’re Dominating the Market! – Major Drivers

AMFI Stock Reclassification Preview (Dec 2023): HUGE Outperformance as Active and Passive Meet

By Brian Freitas

We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 13 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.
Some stocks are expected to be inclusions to global indices later this month while others are potential NIFTY Index and/or Nifty Next 50 Index changes in March.
On average, the upward migrating stocks have outperformed the downward migrating stocks by close to 100% over the last 8 months. The passive flow can be used as an exit.

Hanwha Corp: Updated NAV Analysis – Defense Assets Undervalued

By Douglas Kim

We provide an updated NAV analysis of Hanwha Corporation which is a holding company of the Hanwha Group. We argue that Hanwha Corp’s shares are trading excessively below its NAV.
Hanwha Corp is down 10.5% YTD, underperforming Hanwha Aerospace (up 54.2% YTD). Hanwha Corp’s stake in Hanwha Aerospace is worth 1.9 trillion won (14% higher than Hanwha Corp’s market cap).
Our NAV analysis of Hanwha Corporation (000880 KS) suggests NAV of 2.3 trillion won or NAV per share of 30,203 won which is 33% higher than current price.

Shenzhen Intl (152 HK): A Big Step Forward

By Osbert Tang, CFA

Shenzhen International (152 HK) has reached agreement with the government on the South China Logistics Park Phase I transformation and it will receive Rmb1.058bn compensation.
The sum equals a significant 9% of SZI’s market capitalisation. The agreement also kick-started the project’s long-term contribution, which may provide an income stream lasting 3-5 years.
The deal showcased SZI’s ability to realise the underlying value of its assets. The stock should not be valued on its earnings, and its 0.3x P/B is deeply undervalued.

The Four Listed Chinese Express Companies Suffered Significant Margin Erosion in Q323

Given declining prices and slowing volume growth, we anticipated lower Q3 express margins
The four China-listed express firms saw Op Inc margin fall from 5.3% in Q2 to 3.9% in Q3
SF fared better than ‘sort & transport’ names, but its freight forwarding segment still a drag

PACCAR Inc: Does The Battery Revolution Imply A Possible Investment Opportunity? – Major Drivers

PACCAR managed to surpass the revenue and earnings expectations of Wall Street, with net income surging by 60% year-over-year to a historic $1.23 billion, accompanied by a 23% increase in revenues.
PACCAR Parts also played a pivotal role in the company’s success, with third-quarter revenues reaching $1.58 billion and Parts pretax profits increasing by 10% to $412 million.
PACCAR Financial achieved an impressive pretax income of $134 million in the financial sector in the third quarter.

Waste Management: Recycling Tech Transforms Business! Inside their Next-Gen Sustainability Approach! – Major Drivers

Waste Management delivered a mixed result in the recent quarter, with revenues below market expectations but surpassed the analyst consensus regarding earnings.
The solid waste business was the driving force behind this achievement, with organic revenue growth in collection and disposal aligning well with expectations.
The resilience of solid waste volumes, with positive trends in commercial volumes and special waste growth, stood out.

General Electric Company: A Lucrative Strategy Of Future-Proof Investments Revealed! – Major Drivers

General Electric Company delivered an all-around beat in the previous quarter.
Orders increased by double digits, with services up by 15% and equipment up by 22%, driven primarily by the commercial aerospace sector.
The aerospace segment, in particular, experienced substantial growth, with commercial engines and services leading the way.

ASK Automotive Pre-IPO – Business Has Been Resilient, Although Concentration Risk Remains Elevated

By Clarence Chu

Ask Automotive (7175293Z IN) is looking to raise around US$145m in its upcoming India IPO.
ASK Automotive (ASKA) is the largest manufacturer of brake-shoe and advanced braking (AB) systems for 2Ws in India, in terms of FY23 production volume for OEMs and the branded IAM.
As per CRISIL, it had an approximate 50% market share in said market. The IPO is expected to consist of 100% secondary shares, with promoters trimming their stakes.

Illinois Tool Works Inc.: Surge in China’s Automotive Segment – Unveiling Recent Big Winners! – Major Drivers

Illinois Tool Works delivered a mixed set of results in its most recent results, with revenues falling short of Wall Street expectations but above-par earnings.
The company had relatively stable organic growth in the quarter, with a 2% increase on an equal-day basis.
Operating margin for the third quarter reached 26.5%, marking a 200-basis point increase compared to the previous year.

3M Company: How They’re Dominating the Market! – Major Drivers