In today’s briefing:
- Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
- Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
- Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update
- Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential
Logisteed/KKR Bigly Bid for Alps Logistics (9055) Goes Live Tomorrow. Still A Shocking Multiple
- The Logisteed/KKR entity received its approvals between the last week of July and this past week, and told Alps Logistics (9055 JP) it wanted to launch its tender 22 August.
- It will do so. Approvals were reasonably quick (as expected) and the Special Committee and Board decided nothing material had changed. No reason to change their opinion.
- This is still a HUGE price. And everyone will be out by mid-October if they want. This is an easy deal. And a GIGANTIC win for minorities.
Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient
- The increase in net profit from the previous year outpaced the growth in dividends, which increased cash on hand for listed companies to a record high level.
- Since the equity ratio of manufacturing sector is over 40% and there’s little room for debt repayment, there’s room for a considerable increase in dividends in conjunction with share repurchases.
- If free cash flow isn’t used to invest in growth and return profits to shareholders, rather than to pay small dividends to shareholders, cash on hand will continue to increase.
Aoyama Zaisan Networks Company (8929 JP) – Q2 FY12/24 Results Update
- Q1-2 FY12/24 results demonstrated sustained double-digit earnings growth, driven by the Wealth Consulting business through customer acquisition and the rising number of concluded contracts.
- The Real Estate Solutions business has further raised assets under management and despite the increasing challenges in finding suitable assets, there were five transactions conducted for the ADVANTAGE CLUB business.
- Although the company has maintained FY12/24 guidance, we believe earnings momentum remains positive with the 1) increase in consultant numbers, 2) customer acquisitions, and 3) business investment in personnel as well as IT to boost productivity. We have left our earnings estimates unchanged.
Polaris Holdings (3010 JP) – Solid Execution with Strategic Growth Potential
- Establishing a track record of positive change – Q1 FY3/25 results were in line with guidance, as the company demonstrated solid execution for domestic and overseas hotel operations, supported by continued positive market demand.
- Occupancy rates remain stable at a high level, and ADR and RevPAR remained on an uptrend YoY.
- We note that the company has reported three consecutive quarters of high single-digit OPM, reflecting an improvement in the quality of earnings, and management’s strategies are delivering a sustained operational turnaround.
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