INDUSTRIALS Archives | Page 153 of 295 | Smartkarma

• Shenzhen International (152 HK) is well set to post a significant YoY and HoH growth in earnings in 2H23. Our discussion with the company confirmed this.  
• Profit from Yicheng Qiwanli is expected to be booked and there will be profit upside from REIT listing with logistics hubs at Hangzhou and Guizhou as underlying assets.
• Significant reduction in USD and HKD-denominated debt will reduce its exposure to foreign exchange losses as well as high interest rate, both will be reflected in 2H23.

• MSMEs play a big role in Indonesia’s economy. In 2019, the Indonesian government reported that there were 65.4 million MSMEs in Indonesia, constituting 60.5% of its GDP.
• But for many of these small companies across the region, digitalization is still a new concept, and this provides opportunities for big tech companies as well as startups to fill the gap.
• One such player is Indonesia-based Bababos, which targets SMEs in the manufacturing space. The startup operates a platform that matches these SMEs with suppliers of raw materials like steel, polymers, and chemicals.

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

FY23 trading has continued according to the early August update, demonstrating the benefit of two unrelated activities at Carr’s Group: the Engineering division’s strength countering the weakness seen in the Speciality Agriculture business. Both have underlying longer-term growth attractions to drive earnings, along with the recovery potential in the agriculture end-markets.

• Back on the 26 June, Chow Tai Fook (CTFE) made a pre-conditional voluntary Offer for New World (17 HK)‘s 60.88%-held NWS (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed.
• The Cheng-family-backed CTFE and connected parties held 45.24% of NWD, therefore the parent was effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
• The pre-cons are now done, with a 13 October despatch date for the Composite Document. Technically, this could be wrapped up before NWS’ final dividend ex-date. That’s worth exploring further.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Embraer’s ESG as “Adequate”, in line with its “Adequate” Environmental and Governance scores. The company has a “Strong” score for the Social pillar. Controversies are “Immaterial” and Disclosure is “Strong”.

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and its PHIP updates in our earlier notes. In this note we will undertake a peer comparison.

• Back on the 26 June, Chow Tai Fook (CTFE) made a pre-conditional voluntary Offer for New World (17 HK)‘s 60.88%-held NWS (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed.
• The Cheng-family-backed CTFE and connected parties held 45.24% of NWD, therefore the parent was effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
• The pre-cons are now done, with a 13 October despatch date for the Composite Document. Technically, this could be wrapped up before NWS’ final dividend ex-date. That’s worth exploring further.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Embraer’s ESG as “Adequate”, in line with its “Adequate” Environmental and Governance scores. The company has a “Strong” score for the Social pillar. Controversies are “Immaterial” and Disclosure is “Strong”.

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and its PHIP updates in our earlier notes. In this note we will undertake a peer comparison.

• The pre-condition for the Nws Holdings (659 HK) voluntary general offer from the Cheng family is satisfied. The total offer (HK$9.15 + 2H dividend) is HK$9.46 per share.
• The key condition is (majority vote) approval by independent NWD shareholders. NWD’s share price decline and dependency on NWS earnings/cash flow support a NO vote.
• A reasonable offer which reduces NWD’s gearing, results in a special dividend and helps reduce the holding company discount supports the YES vote. We think that the YES vote prevails.

• The YTD underperformance of Dongfang Electric (1072 HK) has put it on very attractive PER of 5.8x for FY23. More importantly, it has delivered both earnings and new order growth. 
• Financial position has improved with net cash of Rmb16.5bn and its recurring earnings soared 26.5% at 1H23. The adverse economic environment has not had an impact on its operations.
• New orders amounted to Rmb48.9bn (+33.3% YoY), a record high, and we estimate backlog at Rmb166bn. This equals 2.5x FY23F revenue and suggests forward earnings are well covered.

• The pre-condition for the Nws Holdings (659 HK) voluntary general offer from the Cheng family is satisfied. The total offer (HK$9.15 + 2H dividend) is HK$9.46 per share.
• The key condition is (majority vote) approval by independent NWD shareholders. NWD’s share price decline and dependency on NWS earnings/cash flow support a NO vote.
• A reasonable offer which reduces NWD’s gearing, results in a special dividend and helps reduce the holding company discount supports the YES vote. We think that the YES vote prevails.

• The YTD underperformance of Dongfang Electric (1072 HK) has put it on very attractive PER of 5.8x for FY23. More importantly, it has delivered both earnings and new order growth. 
• Financial position has improved with net cash of Rmb16.5bn and its recurring earnings soared 26.5% at 1H23. The adverse economic environment has not had an impact on its operations.
• New orders amounted to Rmb48.9bn (+33.3% YoY), a record high, and we estimate backlog at Rmb166bn. This equals 2.5x FY23F revenue and suggests forward earnings are well covered.

• Our base case valuation of Ecoeye IPO is 45,421 won per share, representing 31% higher than the high end of the IPO price range. 
• Given the solid upside, we have a positive view of Ecoeye IPO. The target P/E multiple of 28.8x is based on a 20% premium to the comps’ average valuation multiple.
• We believe this premium valuation multiple is appropriate given higher sales growth rate and operating margin for Ecoeye as compared to the comps.

• Our base case valuation of Ecoeye IPO is 45,421 won per share, representing 31% higher than the high end of the IPO price range. 
• Given the solid upside, we have a positive view of Ecoeye IPO. The target P/E multiple of 28.8x is based on a 20% premium to the comps’ average valuation multiple.
• We believe this premium valuation multiple is appropriate given higher sales growth rate and operating margin for Ecoeye as compared to the comps.

• Doosan Robotics (454910 KS) raised around US$318m in its Korea IPO, after pricing its 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 demand for the deal and other trading dynamics.

• Taeyoung Engineering & Construction (009410 KS) is the 25th company in our Korea Small Cap Gems series.
• Taeyoung E&C is a mid-sized construction company in Korea with a market cap of 146 billion won. Its shares are trading at P/E of 1x and P/B of 0.2x. 
• At the end of 1H 2023, the company had 6.1 trillion won in order backlog, representing a backlog/sales ratio is 2.3x.

• Apar Industries (APR IN) is the global leader in aluminum and alloy conductor manufacturing. The company is also India’s largest and world’s third largest transformer oil manufacturers. 
• After two silent years during covid, the company’s operations have taken off and there is growth reported in each of its three business segments.
• The balance sheet has also shown improvement and looks stable. But, our principle concerns remain on the operating cash flow side, which looks to be misstated.

• J&T Global Express (1936374D CH), a leading express delivery business in Southeast Asia and China, is pre-marketing a HKEx IPO to raise US$500 million, according to press reports.   
• We previously discussed the IPO in J&T Global Express IPO: The Bull Case and J&T Global Express IPO: The Bear Case. 
• The PHIP filing favours the bull case due to a return to organic growth across the main geographies, maiden profitability, stabilization in contract liabilities and declining FCF burn.

• 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 announced last week that its first EIGA gas atomiser would be dedicated to the refractory alloy powder, C103 (niobium 89%,-hafnium 10%,-titanium 1%), for hypersonic and space applications.
• The decision to focus initially on C103 is in response to US industry demand for refractory alloy powders and driven by the talent and expertise that Amaero has brought together in its senior executive team. 

• Doosan Robotics (454910 KS) raised around US$318m in its Korea IPO, after pricing its 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 demand for the deal and other trading dynamics.

• Taeyoung Engineering & Construction (009410 KS) is the 25th company in our Korea Small Cap Gems series.
• Taeyoung E&C is a mid-sized construction company in Korea with a market cap of 146 billion won. Its shares are trading at P/E of 1x and P/B of 0.2x. 
• At the end of 1H 2023, the company had 6.1 trillion won in order backlog, representing a backlog/sales ratio is 2.3x.

• Apar Industries (APR IN) is the global leader in aluminum and alloy conductor manufacturing. The company is also India’s largest and world’s third largest transformer oil manufacturers. 
• After two silent years during covid, the company’s operations have taken off and there is growth reported in each of its three business segments.
• The balance sheet has also shown improvement and looks stable. But, our principle concerns remain on the operating cash flow side, which looks to be misstated.

• J&T Global Express (1936374D CH), a leading express delivery business in Southeast Asia and China, is pre-marketing a HKEx IPO to raise US$500 million, according to press reports.   
• We previously discussed the IPO in J&T Global Express IPO: The Bull Case and J&T Global Express IPO: The Bear Case. 
• The PHIP filing favours the bull case due to a return to organic growth across the main geographies, maiden profitability, stabilization in contract liabilities and declining FCF burn.

• 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 announced last week that its first EIGA gas atomiser would be dedicated to the refractory alloy powder, C103 (niobium 89%,-hafnium 10%,-titanium 1%), for hypersonic and space applications.
• The decision to focus initially on C103 is in response to US industry demand for refractory alloy powders and driven by the talent and expertise that Amaero has brought together in its senior executive team. 

• There should be two changes for the NIFTY Index (NIFTY INDEX) in March. That could increase to three, but that would take some big price moves from now to January.
• Impact on the potential changes is pretty large at over 6 days of ADV to trade from passive trackers. The impact is over 11 days of delivery volume.
• Inclusion of Avenue Supermarts Ltd (DMART IN) in the F&O segment before January could lead to another change.

• Cainiao Smart Logistics (1437124D HK) has filed an application proof to list on the HKEX (388 HK) and could raise US$1bn at a valuation between US$15bn-20bn.
• Cainiao Smart Logistics (1437124D HK) could get Fast Entry to the HSCI and be included in Southbound Stock Connect once the price stabilisation period is complete.
• Inclusion in other indices will take longer with the highest probability of index inclusion in June. Earlier inclusion will depend on the IPO timing, size and allocation to strategic/cornerstone investors.

• Global logistics and express delivery service provider J&T Express’ HKEx IPO application has been approved and this insight focuses on new data points from the PHIP filings.
• SEA segment’s GPM has further declined during 1H2023, however, gross losses of the other two segments have declined significantly resulting in GPM for the company.
• Our analysis suggests that with falling SEA margins, J&T Global Express (1936374D CH) may not be able to generate operating profits in the medium-term.

• In this insight we focus on J&T’s improved H123 performance in China and SE Asia
• How did the company achieve these gains? And do the improvements appear sustainable?
• We conclude with an updated estimate of J&T’s Enterprise Value: US$9.1 Bn

• FuelCell Energy, Inc. delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus regarding earnings.
• The company reported total revenues of $25.5 million for the quarter.
• The two latest module exchanges at the plant owned by Korea Southern Power Company and the module exchange at the plant at Trinity College were the main factors behind the increase in service agreement revenue for the third quarter of fiscal year 2023.

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance in our earlier notes. In this note we will look at its PHIP updates.

• Cintas Corporation managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The company’s bottom line reaps the rewards of its robust volume and revenue growth.
• Besides, the Fire business generated $174.3 million in revenue, with a 14.2% organic revenue growth rate.