In today’s briefing:
- Lock & Lock – Announces Dividends Worth 25% of Market Cap
- Asia Casino Sector: We Are Raising Guidance on Nagacorp to Strong Buy and Overweight
- Taste Gourmet: Buybacks And Recovery Into Q2 2023
- J Front Retailing (3086) | Still in the Bargain Basement
- Adastria Signs Forever 21, New Growth Through Licensing?
- The Resolution of Human Rights Issues Should Not Be a Means to a Purpose
Lock & Lock – Announces Dividends Worth 25% of Market Cap
- After the market close today, Lock&Lock announced that it will pay out dividends per share of 1,653 won worth 83 billion won, representing 25% of the company’s market cap.
- The shareholders date of record that could receive the dividends is as of 30 September 2022.
- Although the high dividend payment should benefit the existing shareholders, we are not sure on the company’s ability to continue to maintain high dividend payout ratio.
Asia Casino Sector: We Are Raising Guidance on Nagacorp to Strong Buy and Overweight
- A recent dip in the shares against an accelerating revenue recovery trend signals a stronger buy signal not yet broadly recognized by the market.
- Performance to date augers well for a considerable upside by 4Q22 to 1Q23.
- Gains achieved in all customer segments: main floor mass, premium mass as well as VIP.
Taste Gourmet: Buybacks And Recovery Into Q2 2023
- Taste Gourmet Group (8371 HK) is a play on the HK recovery with a promising outlook in the long-term at 5.7x/4.3x FY23/24e PE (10.5%/14.1% dividend yield assuming 60% payout).
- The company recently initiated a buyback mandate on the 20th of September for (10% of outstanding shares) and has repurchased 2.2% of outstanding shares so far.
- We believe the company will report strong earnings for its quarterly release on November 11th and payout a good dividend which will be a further catalyst for rerating.
J Front Retailing (3086) | Still in the Bargain Basement
- J. Front is a key beneficiary of improving consumption post-pandemic and a return of inbound tourism.
- Q2 sales rose 4.8% on the year. 2H sales guidance +2% YoY looks too conservative given full resumption of inbound tourism.
- We believe the stock still represents good value at 0.9x book value.
Adastria Signs Forever 21, New Growth Through Licensing?
- Adastria’s growth has been sporadic in recent years as it adjusts to maturity and saturation in core apparel markets.It has diversification projects but these will take time to develop.
- It thinks it can find faster growth by franchising and licensing with already well-known brands, starting with Forever 21.
- It also has a new business providing apparel collections to General Merchandise Retailers, starting with Izumi.
The Resolution of Human Rights Issues Should Not Be a Means to a Purpose
- If discussion doesn’t proceed from the starting point that respect for rights should be for the coexistence of humankind, not for the maintenance of corporate activities, it will get confused.
- Although human rights were included in the 2021 revision of the Corporate Governance Code in the Principles of Sustainability, it is not thought to have been effective.
- The repeated human rights violation scandals at companies and the fact that these companies have human rights policies in place infers that this is a deeply rooted problem in society.
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