In today’s briefing:
- Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time
- Torii Pharmaceutical (4551 JP): Board Opposes Shareholder Proposal for Appropriation of Surplus
- Japan Tobacco (2914) | Time to Work the Balance Sheet
- Dissolving the Parent-Subsidiary Listing Is a Powerful Way to Increase Valuations?
Amvis Holdings Placement – Has Done Exceptionally Well, Now It’s Prime Time
- Amvis Holdings Inc (7071 JP) (AH)’s founder aims to raise around US$250m via a secondary follow-on offering.
- The deal will increase the free-float of the stock and will lead to the stock being transferred to the Prime segment.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Torii Pharmaceutical (4551 JP): Board Opposes Shareholder Proposal for Appropriation of Surplus
- LIM Japan Event Master Fund sent a document to Torii Pharmaceutical (4551 JP) requesting the company to distribute 100% of its surplus to shareholders and conduct a drastic share buyback.
- LIM is of view that Torii has excess cash balances, which is more than the market cap of the company. Inefficient use of capital has led to low single-digit ROE.
- Torii opposes the proposal, as the company thinks it needs adequate cash to pursue business development aka in-licensing of new drugs.
Japan Tobacco (2914) | Time to Work the Balance Sheet
- The balance sheet is in great shape and could fund a much more aggressive growth strategy (or higher shareholder returns)
- JT lags peers in the higher growth vape & oral markets. Ploom X needs investment to be a global hit. The balance sheet can easily fund both
- Why bullish? The stock is trading cheap and offering a higher yield than its five-year average
Dissolving the Parent-Subsidiary Listing Is a Powerful Way to Increase Valuations?
- While this was a major step forward, it did not adequately explain how Fujitsu would invest the cash from the sale of these non-core businesses in its core businesses.
- The investment strategy of buying listed subsidiaries with parent-subsidiary listings was shown to be reasonable. The exit risk may be lower when the parent makes the subsidiary a wholly-owned subsidiary.
- If valuations are enhanced by expectations of increased corporate value through reviews of the parent’s business portfolio, the dissolution of the parent-subsidiary listing is a powerful way to enhance valuations.
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