In today’s briefing:
- Colowide Placement – Needs a Very Large Correction
- COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
- Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line
- Mercari (4385) | Activist to Add Urgency
- Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder
- Ai Holdings (3076 JP): Full-year FY06/24 flash update
- Nippon Denko (5563 JP): Initial Report、1H FY12/24 flash update
Colowide Placement – Needs a Very Large Correction
- Colowide Co Ltd (7616 JP) aims to raise around US$230m in order to fund its prospective M&A transactions over the next few years
- While the company has undertaken a number of M&A transactions in the past, it hasn’t clearly stated its intended targets for this round.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
- Colowide Co Ltd (7616 JP) is an industrial fastish-food operator in Japan. They sell several dozen kinds of cuisine under several dozen brands, owned and franchised in Japan and overseas.
- The company “philosophy” is “Everything we do is for our customers and employees.” The stock is up 30% in 10yrs. It pays no dividend, but it pays a big yutairimawari.
- This means Real World Float is 100% owned by retail who want restaurant coupons. This offering will be bought by index, short covers, and another 20-30k coupon holders.
Couche-Tard Targets Seven & I: Seven & I’s Pride on the Line
- It was reported yesterday that Alimentation Couche-Tard (ATD CN) has put forward a bold proposal to acquire Seven & I Holdings (3382 JP).
- The offer price remains undisclosed, but the market may be anticipating a significant premium based on the share price movement following the news.
- However, we believe the offer price could fall short of market expectations, and it is likely that Seven & i will reject the proposal.
Mercari (4385) | Activist to Add Urgency
- Q4 results were a mixed bag with GMV growth slowing to just 6%. However, costs came in better than expected, boosting margins
- Management surprise the market with bullish FY6/25 guidance. Expects GMV growth to accelerate to +10% and sees OP at a healthy 22-25 billion yen
- Activist investor Oasis has taken a stake in the company. There is an obvious restructuring angle in addition to significant upside from fintech expansion
Iriso Electronics (6908 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entities, City Index Eleventh and Aya Nomura, reported a 5.06% position in Iriso Electronics (6908 JP). The purchases were from 25 July to 13 August.
- Murakami’s average buy-in price over the last 60 days was JPY2,378.90 per share, a 7.8% discount to the last close price.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Iriso is cash-rich with a P/B less than 1x.
Ai Holdings (3076 JP): Full-year FY06/24 flash update
- Sales increased by 7.4% YoY to JPY49.8bn, with operating profit up 4.4% YoY to JPY9.9bn.
- Recurring profit rose 88.8% YoY to JPY19.9bn, driven by a JPY9.4bn equity method investment gain from Iwatsu Electric.
- FY06/25 forecasts include sales of JPY68.0bn (+36.5% YoY) and operating profit of JPY10.5bn (+6.6% YoY).
Nippon Denko (5563 JP): Initial Report、1H FY12/24 flash update
- In Q1 FY12/24, revenue was JPY36.5bn (-9.5% YoY), operating profit JPY2.2bn (+15.9% YoY), and recurring profit JPY1.2bn (+7.6% YoY).
- The company revised its full-year forecast to revenue JPY79.8bn (+1.8% YoY) and recurring profit JPY5.0bn (+106.6% YoY).
- The dividend payout ratio changed to 40% of underlying profit, with a minimum dividend of JPY10 per share.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
