No Change in Our Fair Value Estimate After Kion Raises 2021 Guidance

We do not expect to make changes to our fair value estimate on the back of Kion Group's increased 2021 guidance. Short-cycle product demand seems to be the main driver behind the upgraded outlook, with a 17% increase in expected orders for the ITS (forklift) division. The SCS (warehouse automation equipment) guidance change was more modest. Orders were left unchanged and revenue guidance increased 6% at the midpoint, in line with the group and ITS divisions. Notably, management increased group projections for orders, revenue, and EBIT but left free cash flow expectations unchanged. We note the company is the midst of building out capacity in China and may have allocated more cash to that project. We retain our narrow moat rating.