In today’s briefing:
- Cosmo Energy (5021) – Headed to an EGM Showdown for the Poison Pill
- Japan Tobacco High Conviction Call: Could Leave 2023 Guidance in the Dust
- Appier (4180) | The Ups and Downs
- % of Female Board Members Is a Measure of a Company’s Seriousness About Improving Its Practices
Cosmo Energy (5021) – Headed to an EGM Showdown for the Poison Pill
- Japanese activist Murakami-san and Cosmo Energy Holdings (5021 JP) have been duking it out for 18 months. He now has 20%. Wants more. Management wants to exercise the poison pill.
- Cosmo’s efforts are not completely honest, but Murakami-san’s efforts are clearly designed to benefit Murakami-san over general shareholders, and Cosmo has finally explained the reasons publicly. Read the doc (Japanese).
- At 1.0x book, lower refining margins vs earlier in the year, and difficulty for Murakami-san to force the issue, one must take more care here than one did 40% ago.
Japan Tobacco High Conviction Call: Could Leave 2023 Guidance in the Dust
- Despite conservative 2023 guidance last quarter, Japan Tobacco (2914 JP) is primed to exceed expectations in the 3rd quarter of 2023.
- Despite no new domestic price hikes, Japan Tobacco’s volume recovery post-hikes is expected to help sustain the revenue and profit growth momentum.
- New price increases in the Philippines and the UK, coupled with last year’s hikes spillover, are expected to boost Japan Tobacco’s earnings; and the yen’s depreciation amplifies these gains.
Appier (4180) | The Ups and Downs
- Appier’s stock initially surged 20% following strong Q2 results but later declined 25%, influenced by small-cap stock volatility, AI-induced valuations, and e-commerce sensitivity.
- The AI company’s competitive position remains strong compared to Braze; the differing stock price performance and valuation suggests significant upside.
- Appier’s thesis remains intact and we expect the company to benefit from key trends in consumer marketing, first-party data and AI solutions.
% of Female Board Members Is a Measure of a Company’s Seriousness About Improving Its Practices
- The groups with over 30% female board members and 25%-30% have higher percentage of foreign shareholders, suggesting that overseas investor engagement drives raising the ratio and that awareness is high.
- Groups with 0% female board members include small companies and are distant from overseas investor engagement, but are unlikely to improve practices substantially, given that they have no female executives.
- The group with over 30% female board members had noticeably higher ROE and Tobin’sQ than those with 25%-30%, which suggests that the high ROE was highly valued by overseas investors.
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