In today’s briefing:
- Canon Buyback Done, Ricoh’s Done Shortly, Back To Your Regularly Scheduled Program
- Socionext Pre-IPO – Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain
- Shiseido: Drunk Elephant Seems an $845m Write-Off
- NEC (6701) | Even Higher Conviction
- It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future
Canon Buyback Done, Ricoh’s Done Shortly, Back To Your Regularly Scheduled Program
- Canon Inc (7751 JP) has announced two buyback programs this year of ¥50bn each. Ricoh Company Ltd (7752 JP) announced one in May for ¥30bn.
- The result is 2.9% bought back vs 4.4%. The accretion nod goes to Ricoh. But so does the overhang nod going forward. Effissimo+Crossholders is 40% for Ricoh. Mid20s for Canon.
- Buyback impact-related trade timing has worked for Canon. Ricoh’s buyback ends imminently. There may be a trade to do here.
Socionext Pre-IPO – Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain
- Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO.
- Socionext is a fabless semiconductor provider in Japan. Sales and profitability has been on an overall uptrend, and design wins in earlier fiscal years should materialize in the coming periods.
- However, the firm has generated a substantial portion of revenue from a related party and is reliant on a particular foundry for its front-end manufacturing.
Shiseido: Drunk Elephant Seems an $845m Write-Off
- Shiseido’s acquisition of Drunk Elephant for a valuation of $845m was perceived positively, hoping that Shiseido could use Drunk Elephant’s digital marketing expertise to restructure its North America business.
- Rather than emulating Drunk Elephant like digital marketing to the company’s other brands, Shiseido has been trying to accommodate all its brands including Drunk Elephant into a hybrid marketing strategy.
- This seems to have killed Drunk Elephant’s appeal to its customers. Thus, Shiseido Company (4911 JP) could be facing a massive $845m write-off over the next few years.
NEC (6701) | Even Higher Conviction
- NEC’s buyback announcement sends a clear message that the MTP is on track and management feel the stock is undervalued
- The recent IR DAY increased our conviction in the financial model. We were impressed with the improving pipeline of Open RAN customers
- The stock is significantly undervalued, trading below book value, with improving ROE
It Is Hoped that the Content of Shareholder Meetings Will Be Enhanced in the Future
- The inclusion of the requirement to use e-voting platforms in the Corporate Governance Code has led to increasing number of companies using e-voting platforms.
- The number of participating companies has increased from 1,540 in March to 1,737 in August. Of the companies participating in e-voting platform, 92% are listed companies in the prime market.
- It is only to be hoped that in the future, companies will focus on improving communication between shareholders and management at general shareholders’ meetings.
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