The company’s operating results in recent quarters have been quite weak, but management has a solid outlook as the company sees improving instant ticket volumes and has been awarded two very important long-term contracts. The momentum of the underlying business has started to build, and PBL expects strong volume growth in 2026. However, this good news has not yet been reflected in the financials or valuation multiples. We think PBL today offers an attractive entry point given the positive future prospects. With that said, the recent numbers do not look impressive yet. For now, we are maintaining our rating of a B but will be open to an upgrade if near-term numbers are solid and management continues to execute.

GIL's management has demonstrated a track record of strong execution and disciplined capital allocation over the years with opportunistic acquisition and buyback. Historically, GIL runs a moderately leveraged balance sheet with aggressive, opportunistic share buyback, and this playbook has created healthy returns for shareholders considering the tough industry GIL operates in and the business growing at only low-to-mid single digit. The company recently went through a large acquisition of HanesBrands at a reasonable valuation considering the synergies and multiples paid for the transaction. The combined entity is expected to grow sales organically around 3%–5% over the long term, while EPS could compound by around 20% on average over the next three years. Given the strong business momentum and solid execution, we are upgrading our rating to “B+”.

Coming out of the pandemic, the supply chain in the commercial aircraft manufacturing market has gradually recovered and has now become more stable. As a result of this momentum, MAL has achieved record gross margins, accelerated topline growth, and valuation multiple expansion, while also raising dividends. MAL is expected to continue benefiting from healthy aircraft demand, supported by production backlogs at Boeing and Airbus representing roughly 10 years of output. Given the improving prospects and sustained business momentum, we are open to an upgrade if the company can continue to deliver strong results. For now, to remain conservative, we are maintaining our rating at “B.”