Schneider Electric: Post Call Thoughts - SE Asia DC growth a sustainable source of growth, PTC financing questions remain

Our Take: The c3% relative fade in the shares post the Q3 call is noteworthy, which we attribute to three factors. Firstly, there was no time during Q&A to cover the primary driver of the shares at present, which is the PTC deal. Investors are becoming more comfortable with the industrial logic, but keen to better understand the financing structure and timeline; it is widely expected that the c€6bn equity component of the c€22bn total will occur next week, with the remaining €16bn of debt issuance expected shortly ahead of the planned closing in cQ3'27, and it may be that the debt component is also secured earlier and partly convertible. Second, the source of the Q3 beat was unexpected — organic growth in Energy Management North America was expected to drive the beat but came in at +20.3% OSG (c.110bps below consensus), with the EM beat stemming from EM China/East Asia, which grew 32.4% organically (c1,500bps above consensus). Data Center was up 'triple digit' at a group level. Third,