In today’s briefing:
- Asics (7936 JP): Huge Forecast Revision to Offset Limited Passive Buying
- Japan – Yet Another Big Round of Passive Selling Expected in August
- Money Forward (3994) | Metronomic Growth
- Honda Motor Placement – Past Large Deals Analysis – Could Do with a Bit More Correction
- Vega’s Lowya Expanding Omnichannel to Grow Audience
- Determine Whether Shareholder Return Is a Temporary Measure or a Shift to Value-Creating Management
- Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance
- Neos Corp (3627 JP): Q1 FY02/25 flash update
Asics (7936 JP): Huge Forecast Revision to Offset Limited Passive Buying
- 15 shareholders are looking to sell between 73.9-85m shares (US$1.2bn-US$1.38bn) of ASICS Corp (7936 JP) in a secondary offering that will likely be priced on 23 July.
- ASICS Corp (7936 JP) has also announced a huge upward revision to its sales and profit forecasts with EPS expected to increase 61% from earlier estimates.
- Passive buying will be extremely limited in the short-term with the downward pressure offset to a large extent by the sales and earnings revisions.
Japan – Yet Another Big Round of Passive Selling Expected in August
- There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in August.
- The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
- Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.
Money Forward (3994) | Metronomic Growth
- Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
- We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
- No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here.
Honda Motor Placement – Past Large Deals Analysis – Could Do with a Bit More Correction
- A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP).
- The possibility of such a selldown was flagged by Reuters prior to the deal launch.
- In our earlier note, we spoke about the deal dynamics. In this note, we talk about the updates since then.
Vega’s Lowya Expanding Omnichannel to Grow Audience
- Lowya began as an online furniture retailer and is still one of the largest in e-commerce, but limited brand awareness has held it back and sales fell last year.
- Vega Corporation, Lowya’s parent, is now expanding physical stores and offering omnichannel solutions to fix the problem.
- This makes sense in a market where stores remain preeminent and are likely to remain so.
Determine Whether Shareholder Return Is a Temporary Measure or a Shift to Value-Creating Management
- The dissolution of cross-shareholdings and changing environment in which foreign ownership has risen to 30% have changed the view of activist investors. TSE is one such example of big change.
- It’s convenient that activist investors can use “TSE requested” language that is both easily understood and undeniable by the company when communicating with the portfolio company to improve its issues.
- We must determine whether this is a temporary return to shareholders until the activist investors are removed from the shareholder list, or a shift to value-creating management.
Hisamitsu Pharmaceutical (4530 JP): Mixed Performance in Q1FY25; No Change in FY25 Guidance
- Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit growth in revenue and net profit in Q1FY25. However, operating profit decreased 5% YoY due to higher expenses.
- Topline growth was mainly driven by Salonpas, which was named the world’s no. 1 OTC topical analgesic patch band for the eighth consecutive year.
- The company reiterated FY25 guidance of 7% revenue growth and low double-digit operating and net profit growth, as an increase in operating profit is expected for the full-year as planned.
Neos Corp (3627 JP): Q1 FY02/25 flash update
- In Q1 FY02/25, TECMIRA reported revenue of JPY2.8bn (+53.7% YoY), operating loss of JPY42mn, and net loss of JPY31mn.
- Revenue growth was driven by strong sales of new Nintendo Switch software and first-time consolidation of Wellmira.
- AI & Cloud segment saw significant revenue increase due to AI chatbot services, while IoT & Devices segment grew 2.6x YoY.
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