Category

Japan

Mar 09
0

Japan: Suruga Bank Ltd, Fast Retailing, Japan Post Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • HUGE Suruga Bank (8358 JP) Buyback
  • Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott
  • Japan Post Holdings – Gaming Out a Five Bagger
  • Japan’s Governance: Improvement in Governance of Companies that Chose Prime Market in ROA Change

HUGE Suruga Bank (8358 JP) Buyback

By Travis Lundy

  • In 2018, Suruga Bank got itself in trouble, the shares fell 80% or more in a year-plus. In 2019 they took a big hit, and the Okano family sold out.
  • Nojima Corp (7419 JP) bought the shares -85% from the peak. Now they are selling those shares, plus the ones they already owned. Down nearly 10% from where they bought. 
  • This is an instant 15+% boost to BVPS and 22+% boost to EPS. That’s great. But that may be where greatness stops.

Fast Retailing: Siding with Russia Could Be a Recipe for a Boycott

By Oshadhi Kumarasiri

  • It was reported yesterday that Uniqlo plans to continue doing business in Russia despite the Ukraine war situation.
  • Fast Retailing (9983 JP)’s decision to continue doing business in Russia has not gone too well with some of its customers.
  • If this leads to a fully blown boycott, the price impact could be significant as the company’s valuation remains towards the expensive side even after a 45% drop in valuation.

Japan Post Holdings – Gaming Out a Five Bagger

By Mio Kato

  • We have articulated why we believe Japan Post Bank and Japan Post Insurance could have 100%+ upside.
  • We further believe that Japan Post Holdings also offers very significant upside potential.
  • His comes not just from its subsidiaries’ performance but also improvements in post office profitability and shrinking of the holdco discount.

Japan’s Governance: Improvement in Governance of Companies that Chose Prime Market in ROA Change

By Aki Matsumoto

  • I would like to explore again how companies that have chosen the prime market have improved their corporate governance practices by the degree of improvement in ROA.
  • Improvements in corporate governance practices for companies that improved ROA by more than 2% were advanced in many of the criteria other than items that newly stated in listing criteria.
  • Companies that have improved their profitability may have confirmed that they have begun to move toward more effective use of cash and assets. If so, there are signs of hope.

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Mar 08
0

Japan: Softbank Group, Bank of Kyoto, Yamazaki Baking, Torikizoku and more

By | Daily Briefs, Japan

In today’s briefing:

  • TOPIX-Nikkei Skew Trade – Updates Factoring in Ukraine
  • Bank of Kyoto (8369) – A Complicated Risk Model Clarified
  • Yamazaki Baking: As Margins Double, 100% Upside Is Possible
  • Torikizoku Holdings (3193): February Sales Affected by Omicron

TOPIX-Nikkei Skew Trade – Updates Factoring in Ukraine

By Mio Kato

  • The Nikkei is now down 9.57% vs. when we first recommended our skew trade (now up 0.40%). 
  • Despite some frustrating idiosyncratic moves which have prevented the skew trade from outperforming more it has mostly held up. 
  • Looking forward, we believe it is worthwhile assessing upside and downside macro risks for the components of the trade.

Bank of Kyoto (8369) – A Complicated Risk Model Clarified

By Travis Lundy

  • Last May I proposed a model for thinking about the appropriate discount of Bank of Kyoto (8369 JP) vs its giant equity portfolio and small operations. It was a sell.
  • In December, the bank changed its shareholder return ratio, which indicated less value destruction, and tighter appropriate discount. The shares rallied and discount narrowed. 
  • Now the Shares Adjusted for Banking Ops Valuation have seen the discount to After-Tax Equity Portfolio Valuation widen sharply in the past 10 days. So here’s the hedging model.

Yamazaki Baking: As Margins Double, 100% Upside Is Possible

By Oshadhi Kumarasiri

  • Yamazaki Baking (2212 JP) raised prices in January 2022 due to rising oil prices. We are expecting another price hike very soon to reflect the 60% increase in wheat prices.
  • These price hikes may not increase Yamazaki Baking’s 2022 OP margin significantly above the guided level.
  • However, once input prices normalise following the Russia Ukraine war, we could see Yamazaki Baking’s OP margin reaching 4.0% in the medium term.

Torikizoku Holdings (3193): February Sales Affected by Omicron

By Mita Securities

  • February SSS 112.8% vs. 2021, 39.1% vs. 2019 (pre-pandemic)

  • The number of stores at the end of February was 615 (unchanged MoM). The number of directly owned stores was 384 (unchanged MoM).

  • Second Toriki Burger store to open in Shibuya on March 10

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Mar 07
0

Japan: Mcdonald’s Holdings Co Japan, SRE Holdings Corp, Chugai Pharmaceutical, Kura Sushi Inc, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • FTSE Japan: Potential Inclusions Following TSE Restructure
  • SRE Holdings (2980 JP) Offering – New Higher Growth at New Lower Multiple
  • Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive
  • Kura Sushi (2695): February Same-Store Sales Flat YoY Due to Omicron
  • Japan’s Governance: Electronic Voting Platform

FTSE Japan: Potential Inclusions Following TSE Restructure

By Brian Freitas

  • Following the TSE restructure on 4 April, FTSE will include stocks that trade on the Prime Market and Standard Market as part of the eligible universe for index inclusion.
  • We see 4 stocks meeting the requirements for inclusion in the FTSE All-World Index, and another 13 stocks meeting the requirements for inclusion in the FTSE All-Cap Index.
  • There are stocks that have over 4 days of ADV to buy from passive trackers. Given the inclusions will take place in March 2023, its wait and watch for now.

SRE Holdings (2980 JP) Offering – New Higher Growth at New Lower Multiple

By Travis Lundy

  • SRE Holdings Corp (2980 JP) last week announced an offering of new shares and a secondary share sale by Z Holdings (4689 JP) of the bulk of its holdings.
  • The Z Holdings sale coincides with a “new business alliance” between SRE and Yahoo. At first glance, it appears as if both sides have decided to rejig what they do.
  • SRE has an interesting business model which is quite growthy. It is growthier than it planned and others expected, but the stock has fallen 70% in 3mos. It’s a buy.

Chugai Pharmaceutical (4519 JP): Key Drugs Are Facing Competition; 2022 Target Seems Aggressive

By Tina Banerjee

  • Chugai Pharmaceutical (4519 JP) shares declined 2% since we published our bearish note on the company in December. We remain bearish on the name.
  • Chugai is betting big on Actemra, Hemlibra, and Ronapreve for achieving 2022 revenue target. However, these have bleak outlook due to competition and uncertainty regarding COVID-19 prevalence globally.
  • Chugai does not have any big launches expected this year. Pipeline has less visibility for compensating the revenue loss from the patent expired products.

Kura Sushi (2695): February Same-Store Sales Flat YoY Due to Omicron

By Mita Securities

  • February SSS: 99.1% vs. 2021, 95.8% vs. 2019 (pre-pandemic)

  • Revolving sushi continues to enjoy competitive advantage even in a difficult environment

  • Continuing store openings in Japan, the U.S., and Taiwan

Japan’s Governance: Electronic Voting Platform

By Aki Matsumoto

  • According to data disclosed by TSE, the number of companies participating in the electronic voting platform increased 530 companies from 1,010 in June 2021 to 1,540 as of March 4.
  • Looking at the 1,540 companies by new market-segment, 92.8% of the companies chose the prime market, which is greatly influenced by “electronic voting platform” requirement in prime market listing criteria.
  • Based on the selected market results published by TSE, 77.7% of the companies that chose prime market are participating in the electronic voting platform, while 22.3% are not yet participating.

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Mar 06
0

Japan: Nexon, Heiwa Real Estate, Softbank Group, SBI Sumishin Net Bank and more

By | Daily Briefs, Japan

In today’s briefing:

  • Last Week in Event SPACE: Russia/Indices, Prosus, Virtus, Crown, Nexon, Hitachi Metals
  • Index Rebalance & ETF Flow Recap: NKY, FTSE CH50/A50/TW50/EPRA, S&P/ASX, KRX New Deal, NIO, Russia
  • Softbank Group – Tough Week for VF as Public Portfolio Falls $6bn over Two Days
  • ECM Weekly (6th Mar 2022) – SBI Sumishin, Farm Fresh, Arrail, NIO, LIC, ZIP, IDP Education

Last Week in Event SPACE: Russia/Indices, Prosus, Virtus, Crown, Nexon, Hitachi Metals

By David Blennerhassett

  • Major global indices have relegated Russia to the “standalone” and “unclassified” market status. Talk of significant flows into major non-Russia EM markets such as China, Taiwan, Korea, etc is misguided. 
  • Even if OLX and VK Group are written down to zero, the fall in Prosus (PRX NA)‘s implied stub has overshot the mark
  • The founder and former chairman and CEO of Nexon (3659 JP) has passed away. The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.

Index Rebalance & ETF Flow Recap: NKY, FTSE CH50/A50/TW50/EPRA, S&P/ASX, KRX New Deal, NIO, Russia

By Brian Freitas

Softbank Group – Tough Week for VF as Public Portfolio Falls $6bn over Two Days

By Kirk Boodry

  • Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.
  • With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.
  • The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.

ECM Weekly (6th Mar 2022) – SBI Sumishin, Farm Fresh, Arrail, NIO, LIC, ZIP, IDP Education

By Sumeet Singh

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Mar 05
0

Japan: Hitachi Transport System, Sony Corp, Nexon, Hino Motors Ltd and more

By | Daily Briefs, Japan

In today’s briefing:

  • Hitachi Transport Is the Eventy Energizer Bunny
  • Sony – EV Partnership Is Excellent for Sony but Highlights Honda’s Struggles
  • Three Ways of Settling Nexon Inheritance Tax Payment: Each Way’s Ramifications
  • Hino – Some Uncertainty, Probably an Overreaction, But Still Not Worth Bottom Fishing

Hitachi Transport Is the Eventy Energizer Bunny

By Travis Lundy

  • Hitachi Transport System (9086 JP) has been “virtually” for sale since October 2019 but it did not pop when others did then. But SG and HTS “consciously uncoupled” in 2020.
  • Mid-Year last year saw news HTS was entertaining offers, which didn’t go anywhere but newer news suggests Round 2 of a new course of bidding is done. 
  • And the stock keeps on going up and up and up.

Sony – EV Partnership Is Excellent for Sony but Highlights Honda’s Struggles

By Mio Kato

  • Sony and Honda announced today they would form a strategic alliance in the mobility field. 
  • Honda will be responsible for manufacturing and after sales while Sony will handle imaging, sensing, telecommunication, network and entertainment technologies. 
  • This helps Sony maintain its asset light model and is also positive for Honda but we do feel that it makes Honda look a little lost in the changing world.

Three Ways of Settling Nexon Inheritance Tax Payment: Each Way’s Ramifications

By Sanghyun Park

  • There are three ways families can settle inheritance tax: 1. payment in Kind, 2. direct sale of the NXC stake, and 3. NXC sells its stake in Nexon Japan.
  • They have different ramifications from an investment point of view, and the third option is probably the one that the market desires most.
  • If the family goes for the third option, they will likely sell all of NXC’s Nexon Japan stake (47.89%), which will lead to a TOB to Nexon Japan minority shareholders.

Hino – Some Uncertainty, Probably an Overreaction, But Still Not Worth Bottom Fishing

By Mio Kato

  • Hino announced during market hours that it was being probed for falsifying exhaust data prompting a 14.8% drop in the stock price. 
  • At its press conference the company revealed that up to 116k vehicles were affected and roughly 35% of domestic production would be halted. 
  • Some uncertainty remains and valuations after the fall are reasonable rather than exceedingly cheap so we would be hesitant to bottom fish here.

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Mar 04
0

Japan: Renesas Electronics, Hokuhoku Financial Group, IHI Corp, Tokyo Stock Exchange Tokyo Price Index Topix, Ohsho Food Service and more

By | Daily Briefs, Japan

In today’s briefing:

  • Renesas – Synergies Outperform and Some Potentially Bad News for Arm
  • Hokuhoku Financial (8377 JP) – Buyback Dynamics For March… 👀
  • IHI (7013 JP): Ukraine Puts the Spotlight on Japanese Defense Contractors
  • Japan’s Governance: Has Corporate Governance of Companies that Have Chosen Prime Market Improved?
  • Ohsho Food Service (9936): Solid February Sales Despite Omicron Impact. Positive Effects of TV Show

Renesas – Synergies Outperform and Some Potentially Bad News for Arm

By Mio Kato

  • Renesas’ investor day today focused on providing more details on existing themes such as the progress of synergies from Dialog. 
  • The strong overall growth outlook and progress offering integrated solutions was also emphasised. 
  • However, what we found most interesting was some of their commentary on RISC-V developments.

Hokuhoku Financial (8377 JP) – Buyback Dynamics For March… 👀

By Travis Lundy

  • Hokuhoku made a somewhat startling buyback announcement in late December and the shares jumped.
  • Then they bought back almost nothing in January, and bought back 17.4% of traded volume in February.
  • There is a lot left over and Hokuhoku remains one of the cheapest regional banks out there.

IHI (7013 JP): Ukraine Puts the Spotlight on Japanese Defense Contractors

By Scott Foster

  • IHI likely to benefit from rising defense spending as events in Ukraine serve as a wake up call to a Japan already worried about North Korea and China.
  • Japan’s top maker of jet engines and solid-fuel rockets. Also geared to the recovery of commercial air traffic and auto production, and to carbon neutral technologies. 
  • Sales and profit recovery underway. 60% upside to 15x FY Mar-24 EPS estimate. 

Japan’s Governance: Has Corporate Governance of Companies that Have Chosen Prime Market Improved?

By Aki Matsumoto

  • This article discuss the degree of improvement in corporate governance practice initiatives over the past year, focusing on companies that have chosen a new market segment, particularly the prime market.
  • Many companies that chose prime market have made progress in addressing the listing standards, and as a result, have made improvements primarily in board practice criteria specified in those standards.
  • Retirement of treasury stock is also related to the listing criteria. For the other key actions, no significant trends were found, as it depends on the situation of each company.

Ohsho Food Service (9936): Solid February Sales Despite Omicron Impact. Positive Effects of TV Show

By Mita Securities

  • Monthly data for February: Positive impression

  • Ohsho Food Service (9936, the company) disclosed monthly data for its directly-owned stores for February (on a preliminary basis)

  • The company maintained solid sales despite Omicron impact, which gives us a positive impression.

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Mar 03
0

Japan: Hitachi Metals, Kadokawa Dwango, SBI Sumishin Net Bank, Tokyo Stock Exchange Tokyo Price Index Topix, Skylark Co Ltd and more

By | Daily Briefs, Japan

In today’s briefing:

  • Hitachi Metals (5486) – Where IS Undisturbed?
  • Kadokawa – Rather Than Waste Time Considering a Sony Buyout of Square Enix Look at This Instead
  • SBI Sumishin Net Bank Pre-IPO – Earnings Forecast and Thoughts on Valuations
  • Japan’s Governance: Prime Market Selection and Corporate Governance Initiatives
  • Skylark Holdings (3197): February Sales Significantly Affected by Omicron

Hitachi Metals (5486) – Where IS Undisturbed?

By Travis Lundy

  • Hitachi Metals (5486 JP) is currently awaiting regulatory approval for its takeover by a consortium led by Bain Capital, announced in late April 2021. 
  • The deal was originally expected to see a Tender Offer launched in November 2021, but that was delayed because the bidders lacked some necessary regulatory approvals.
  • Since then, the stock has sold off. Today it sold off a LOT. Deal break? Market ructions? Someone getting a tap on the shoulder? How far down is the gap?

Kadokawa – Rather Than Waste Time Considering a Sony Buyout of Square Enix Look at This Instead

By Mio Kato

  • Over the past few quarters Square Enix has repeatedly been the subject of M&A speculation related to both Microsoft and Sony.
  • We consider such speculation to be nonsense and have repeatedly said so. 
  • However, there is a far more intriguing M&A prospect in Kadokawa and it has not gotten much press…

SBI Sumishin Net Bank Pre-IPO – Earnings Forecast and Thoughts on Valuations

By Sumeet Singh

  • SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.
  • SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. 
  • The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we will talk about our earnings forecast and throughts in valuations.

Japan’s Governance: Prime Market Selection and Corporate Governance Initiatives

By Aki Matsumoto

  • This article analyzes the corporate governance status of 1,713 companies in the Metrical Universe that have disclosed their new market selection.
  • Companies that chose Prime Market were more advanced than those that chose the other markets in the % of independent directors and the independence of their nominating and compensation committees.
  • Key actions show that companies that chose Prime Market outperform those that chose other markets in growth policy, dividend policy, frequency of share retirement and AGM disclosure, excluding policy-shares/total assets.

Skylark Holdings (3197): February Sales Significantly Affected by Omicron

By Mita Securities

  • February SSS: Negatively affected by Omicron

  • Skylark HD (3197, the company) disclosed monthly data for February (on a preliminary basis)

  • Same-store sales were 93.1% vs. February 2021 (115.8% for January), 66.0% vs. February 2020, and 65.7% vs. February 2019

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Mar 02
0

Japan: Toshiba Corp, Orix Corp, Nexon, Trend Micro Inc, Nikkei 225, Tokyo Stock Exchange Tokyo Price Index Topix, Money Forward, Misumi Group and more

By | Daily Briefs, Japan

In today’s briefing:

  • Toshiba – Privatisation Rebuttal and Then a Change in CEO…
  • Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN
  • Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)
  • Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play
  • Japan Cybersecurity: Frequent and Sophisticated Cyber-Attacks Drive Demand
  • The Passing of Nexon Founder KJJ & Controlling Stake Sale Event 2.0
  • Nikkei Trade Levels
  • Japan’s Governance: Do Companies Improve Their Corporate Governance when Profitability Improves?
  • Money Forward (3994): Announced Upward Revision of 1Q Guidance
  • Misumi Group (9962): Approach with Caution

Toshiba – Privatisation Rebuttal and Then a Change in CEO…

By Mio Kato

  • Yesterday Bloomberg published an interview with Toshiba CEO Satoshi Tsunakawa where he effectively said a privatisation was not going to happen. 
  • Today, Toshiba announced that Tsunakawa and his deputy, Mamoru Hatazawa would be resigning effective immediately. 
  • What an interesting coincidence… one which could make shorting Toshiba quite attractive.

Nikkei 225 Change – Shinsei (8303) OUT, ORIX (8591) IN

By Travis Lundy

  • The Nikkei Index team announced changes to the Nikkei 225 Average today after the close. 
  • Shinsei Bank (8303) is OUT and ORIX (8591) is IN based on the new rule changes effective with the new market structure in place at the TSE on 4 April. 
  • There is a special sit on Shinsei, and ORIX has several days to buy. It could be interesting.

Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

By Brian Freitas

Nexon – Founder Kim Jung-Ju Passes, Raises Question if Nexon Deal Is Back In Play

By Travis Lundy

  • The founder and former chairman and CEO of Nexon (3659 JP) passed away according to both Nexon and his holding company NXC. Both announced it late afternoon 1 March.
  • NXC – the near-parent  (47+% stake) of Nexon tried to sell Nexon/NXC in H1 2019 to no avail. Since then, profits have rebounded somewhat, and investments have multiplied. 
  • The estate may wish to sell Nexon shares, or its entire stake, at some point near-term.

Japan Cybersecurity: Frequent and Sophisticated Cyber-Attacks Drive Demand

By Shifara Samsudeen, ACMA, CGMA

  • The demand for cybersecurity products and services has been expanding in Japan amidst an increase in frequent and sophisticated cyber-attacks in the country.
  • Due to shortage of in-house IT professionals with knowledge on cyber security, there has been growing demand for outsourced managed security services in Japan.
  • We have identified Trend Micro Inc (4704 JP) as our top pick in the Japanese cyber security market as there is further potential for top line and margins to expand.

The Passing of Nexon Founder KJJ & Controlling Stake Sale Event 2.0

By Sanghyun Park

  • We should pay the most attention to what choices and decisions the bereaved family will make concerning the stakes and management rights of the deceased in NXC.
  • This opens the possibility that the KJJ’s stake sale event in 2019 will happen again in the foreseeable future.
  • Under these circumstances, there is a possibility that short-term momentum trading aimed at tender offers to minority shareholders following the sale of Nexon’s major shareholder stake will surge.

Nikkei Trade Levels

By Thomas Schroeder

  • Japan’s Nikkei 27,000 inflection lows are under pressure and expected to give way in Q2. We outline a near term give back, recovery rise into the higher degree sell zone.
  • RSI displays a more bullish tactical lean (bull divergence and constructive wedge) into near term weakness.
  • Nikkei 28,300 is the macro sell zone. Near term pivot support at 26,200.

Japan’s Governance: Do Companies Improve Their Corporate Governance when Profitability Improves?

By Aki Matsumoto

  • This article examines changes in corporate governance practices of 1,713 as well as changes in market caps, viewing the improvement in profitability as a change in ROA.
  • While ROA improvements haven’t motivated board practices to improve, they’ve tended to pay more attention to use of cash in key actions, but are somewhat biased toward shareholder-returns than investments.
  • Lower valuations were the main reason for the largest declines in market capitalization for the companies with the largest improvements in ROA over the last 13 months.

Money Forward (3994): Announced Upward Revision of 1Q Guidance

By Mita Securities

  • Upward revision of sales and profit guidance. A mix of good and bad news

  • The company raised its sales guidance by 350m yen and raised its EBITDA and OP guidance by 800m yen.

  • The upward revision of sales guidance is due to 1) higher recurring and non-recurring revenue in the Business domain and 2) higher non-recurring revenue in the Finance domain

Misumi Group (9962): Approach with Caution

By Scott Foster

  • The shares have dropped back nearly 30% and their valuation is now reasonable. Guidance looks reasonable, but recent sales and profit trends show weakness.
  • Factory Automation, Die Components and the VONA e-commerce business have all recovered.
  • A new era of higher profitability may be at hand, but in view of market and economic uncertainty, approach with caution.

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Mar 01
0

Japan: Money Forward, Hohsui Corp, Morinaga Milk Industry Co, SBI Sumishin Net Bank and more

By | Daily Briefs, Japan

In today’s briefing:

  • TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)
  • Chuo Gyorui to Take Out Hohsui – Done Deal Easy Peasy.
  • Morinaga (2201) Mostly Exits Morinaga Milk (2264) – Big Buyback
  • SBI Sumishin Net Bank Pre-IPO – Peer Comparison – One of the Largest but Also One of the Slowest

TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)

By Janaghan Jeyakumar, CFA

  • The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation. 
  • For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation. 
  • Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. This situation opens up interesting opportunities for a basket trade. 

Chuo Gyorui to Take Out Hohsui – Done Deal Easy Peasy.

By Travis Lundy

  • This is an agreement between one fish merchant Chuo Gyorui (8030 JP) and another fish merchant Nissui (1332 JP) to take over a third fish merchant, Hohsui Corp (1352 JP). 
  • And the takeover PER and forecast PCFR are low. But there really is nothing fishy here. Hohsui has a lot of debt.
  • This is a done deal and there is nothing anyone can do about it.

Morinaga (2201) Mostly Exits Morinaga Milk (2264) – Big Buyback

By Travis Lundy

  • Morinaga & Co is selling down a near-10% stake in Morinaga Milk in a ToSTNeT-3 buyback on 1 March. 
  • Morinaga Milk will see an EPS and ROE uplift. Eventually, there are a lot more cross-holdings to buy back.
  • Near-, medium-, and longer-term there are different flow patterns worth understanding if you have a position or are looking for one. If you want to sell lots, you can tomorrow.

SBI Sumishin Net Bank Pre-IPO – Peer Comparison – One of the Largest but Also One of the Slowest

By Sumeet Singh

  • SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.
  • SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. 
  • The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we compare the company with some of its peers.

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Feb 28
0

Japan: Nippo Corp, SBI Sumishin Net Bank, Koshidaka Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Japan

In today’s briefing:

  • JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022
  • SBI Sumishin Net Bank IPO: Bricks ‘n’ Clicks
  • Koshidaka Holdings (2157): Announced Capital and Business Alliance with Advantage Advisors
  • Japan’s Governance: Do Profitable Companies Improve Corporate Governance?

JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Feb 2022

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
  • A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.
  • Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-February 2022.

SBI Sumishin Net Bank IPO: Bricks ‘n’ Clicks

By Arun George

Koshidaka Holdings (2157): Announced Capital and Business Alliance with Advantage Advisors

By Mita Securities

  • Targeting long-term growth by leveraging external funds and talents

  • Selecting a financing scheme that is unlikely to weigh on the stock price

  • Koshidaka HD’s capital raising scheme has a high minimum exercise/conversion price and a high base price (800 yen)

Japan’s Governance: Do Profitable Companies Improve Corporate Governance?

By Aki Matsumoto

  • This article focuses on the question: Do profitable companies improve corporate governance?
  • The more profitable companies tend to use the cash generated in a more thoughtful manner, while we can’t say that they are more engaged in board practices.
  • The high percentage of foreign shareholders in companies with high ROA may be related to the fact that these companies have become more careful about how they use cash flow.

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