In today’s briefing:
- Last Week in Event SPACE: Shin Kong Financial, Swire Pac, Seven & I, Korea Zinc
- Tsuruha Holdings (3391 JP): Q1 FY02/25 flash update
- Installed Building Products: Initiation Of Coverage – Market Penetration and Expansion in Multi-Family Sector & Other Major Drivers
- Focus on Cash Flow Recovery from Investments as Planned, as Well as Appropriate Cash Allocation
Last Week in Event SPACE: Shin Kong Financial, Swire Pac, Seven & I, Korea Zinc
- Stay long Shin Kong Financial Holding (2888 TT) and buy more, or get long. CTBC Financial Holding (2891 TT) may make a better run at it, and may even bump.
- It’s a hard to be bearish Swire Pacific (A) (19 HK) at 0.34x P/B. Yet the Hong Kong property market remains a challenging space. To put it mildly.
- Seven & I Holdings (3382 JP) saw breathless news articles suggesting a foreign takeover became more difficult. Not really.
Tsuruha Holdings (3391 JP): Q1 FY02/25 flash update
- Sales increased 5.2% YoY to JPY273.4bn, with operating profit growing 7.1% YoY to JPY15.1bn.
- The revised forecast for FY02/25 includes revenue of JPY850.8bn and net income of JPY22.2bn.
- FY02/25 will cover a 9.5-month period, with expected one-time expenses and unchanged annual dividend levels.
Installed Building Products: Initiation Of Coverage – Market Penetration and Expansion in Multi-Family Sector & Other Major Drivers
- Installed Building Products’ fiscal 2024 second quarter showcased a dynamic operating environment with improvements and strategic divestitures reflecting the company’s focus on core growth areas.
- Key financial results included an impressive increase in single-family sales, steady multi-family segment performance, and a slight uptick in commercial sales, albeit varying by submarket dynamics.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Focus on Cash Flow Recovery from Investments as Planned, as Well as Appropriate Cash Allocation
- Last year’s CAPEX plan was also a record high, but ROE growth was limited. We should closely monitor whether the allocation of CAPEX, shareholder returns, and retained earnings is appropriate.
- When a company finally begins using cash on hand for investments and lacks reliable track records, it should be monitored to ensure that it’s generating sufficient cash flow from CAPEX.
- The trend continues to remain that most investments are directed overseas. Note that many Japanese companies have a history of having difficulty managing their overseas operations.
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