In today’s briefing:
- Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- Nippon Shokubai (4114) – Business Transformation and Scope for Improving Capital Management
- SOURCENEXT (4344): Q3 FY03/24 Update
- Sun* (4053): Full-Year FY12/23 Update
- Azbil (6845): Q3 FY03/24 Update
- Organo (6368): Q3 FY03/24 Update
- LaKeel (4074): Full-Year FY12/23 Update
- Hochiki (6745): Q3 FY03/24 Update
- A Change in Manager’s Mindset that Has Begun Will Lower the Investment Risk for Activist Investors
Chilled & Frozen Logistics (9099) – Hostile Takeover Launched by AZ-Com Maruwa (9090)
- Chilled & Frozen Logistics Holdings (9099 JP) last week announced its “Action to Implement Management That is Conscious of Cost of Capital and Stock Price”.
- Today it announced AZ-Com Maruwa Holdings (9090 JP) had announced its intention to launch a Tender Offer on C&F Logistics without having contacted C&F first. A HOSTILE deal. Yum.
- The deal is proposed at a 50% premium, with the goal of getting to a minimum of 50.00%. This will be interesting.
Chilled & Frozen Logistics (9099 JP): AZ-COM Maruwa (9090 JP)’s Hostile Offer
- AZ-Com Maruwa Holdings (9090 JP) has launched a pre-conditional hostile offer for Chilled & Frozen Logistics Holdings (9099 JP) at JPY3,000 per share, a 47.0% premium to the last close.
- The pre-conditions primarily relate to regulatory approvals. The tender is expected to start in early May. The Board responded that it will evaluate the offer.
- The hostile offer was a reaction to the Board’s lack of engagement. The Board will struggle to reject an attractive offer, which is 37.5% higher than the all-time high.
Nippon Shokubai (4114) – Business Transformation and Scope for Improving Capital Management
- Driving strategic revitalization – Nippon Shokubai is a global chemical company with competitive proprietary technology, a track record of sustained free cash flow generation, and a balance sheet with room for optimization.
- It has embarked on a business transformation, strategically focused on expanding its Solutions business with higher- margin performance chemicals and identifying energy, electronics, and life science sectors as growth markets.
- Organizational changes being conducted aim to enhance human resource development and conduct quicker decision-making.
SOURCENEXT (4344): Q3 FY03/24 Update
- Sourcenext Corp (4344 JP) plans, develops, and sells PC software, smartphone apps, and IoT products.
- In POCKETALK®, besides the existing device business, the company will focus on sales of software products, including Simultaneous Interpreter for the POCKETALK® for BUSINESS series for corporate customers.
- The revision is mainly due to the extended lead time from inquiry to full-scale orders for the POCKETALK for BUSINESS Simultaneous Interpretation web browser version.
Sun* (4053): Full-Year FY12/23 Update
- Sun* (4053 JP) provides consulting, software development, recruiting, and other services to companies that seek to create value or businesses, including startups.
- In FY12/23, revenue was JPY12.5bn (+16.5% YoY), operating profit JPY1.8bn (+96.8% YoY), recurring profit JPY2.3bn (+99.1% YoY), and net income attributable to owners of the parent JPY1.6bn (+90.4% YoY).
- Sun* does not disclose a medium-term business plan with quantitative targets, but it releases qualitative targets related to KPI growth.
Azbil (6845): Q3 FY03/24 Update
- Azbil Corp (6845 JP) provides automation services for buildings, factories, and plants and also offers subsistence-related automation services in the lifestyle area.
- In FY03/23, sales were JPY278.4bn (+8.5% YoY), operating profit was JPY31.3bn (+10.7% YoY), recurring profit was JPY32.1bn (+8.9% YoY), and net income attributable to owners of the parent was JPY22.6bn.
- Azbil in May 2021 announced a new medium-term management plan to cover the four fiscal years from FY03/22 to FY03/25 and new long-term targets for FY03/31.
Organo (6368): Q3 FY03/24 Update
- As a comprehensive water treatment engineering company, Organo Corp (6368 JP) engages in the planning, design, procurement, construction, operational management, and maintenance of water treatment plants.
- In FY03/23, orders received were JPY173.5bn, revenue was JPY132.4bn, operating profit was JPY15.2bn, recurring profit was JPY16.0bn, and net income attributable to owners of the parent was JPY11.7bn.
- Organo Corporation announced revisions to its full-year forecast for FY03/24.
LaKeel (4074): Full-Year FY12/23 Update
- LaKeel (4074 JP) is a software development company that uses a new system development method called microservices.
- In FY12/23, revenue was JPY7.7bn (+11.2% YoY), operating profit JPY775mn (+0.3% YoY), recurring profit JPY807mn (+10.3% YoY), and net income attributable to owners of the parent JPY540mn.
- The company has not announced a medium-term business plan, but has medium-term targets of JPY10.0bn in revenue and an OPM of 15% to be achieved.
Hochiki (6745): Q3 FY03/24 Update
- Hochiki Corp (6745 JP) is a major manufacturer of fire alarm and fire extinguishing systems.
- In FY03/23, the company posted revenue of JPY85.5bn, operating profit of JPY5.6bn, recurring profit of JPY5.9bn, and net income attributable to owners of the parent of JPY4.4bn.
- Hochiki Corporation announced an upward revision of its full-year FY03/24 earnings forecast.
A Change in Manager’s Mindset that Has Begun Will Lower the Investment Risk for Activist Investors
- In the past, value traps were macro environment that couldn’t generate profits in deflationary economy, and micro problem of managers who didn’t listen to constructive management improvement proposals from investors.
- The introduction of Stewardship Code and Corporate Governance Code, and TSE’s request for change in awareness of companies, has reduced the risk of activist investors’ investment strategies flailing around in vain.
- Management awareness has just begun to change, and few companies generate intrinsic value, as evidenced by the fact that ROE hasn’t begun to improve. Activist investors will continue taking interest.
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