In today’s briefing:
- Dai-Ichi Life Holdings – 4 Quarters Strongly Rising Profit, ROE: 3% to 12%, A Profit Upgrade?
- Medley (4480) To Buy Out Guppy’s (5127) At ¥3,250 (9.4x Aug26 EV/FCF)
- Pause/Pullback Underway; Downgrading Europe and Mexico; Buys in Services, Tech, Comm, Healthcare
- Softbank (9984 JP): Big Fat NAV Discount, but Headwinds Outweigh Tailwinds Going Forward
- What Can Be Done to Make the Independence of the Committee Function that Investors Have Questioned?
Dai-Ichi Life Holdings – 4 Quarters Strongly Rising Profit, ROE: 3% to 12%, A Profit Upgrade?
- Dai Ichi Life Insurance (8750 JP) has seen rebounding net profit at a strong rate of growth for the past four quarters.
- ROE has moved from a dismal 3.4% to 11.8% from 2Q23 to 2Q24, where a single US bank impairment should now drop out of the numbers
- New business annual premiums are up from JPY97bn to JPY122bn from 2Q23 to 2Q24 with a high solvency ratio of 654%
Medley (4480) To Buy Out Guppy’s (5127) At ¥3,250 (9.4x Aug26 EV/FCF)
- Medley (4480 JP) operates recruitment platforms in healthcare, elsewhere. GUPPY’s Inc (5127 JP) does too. They also offer exam prep for two niches where they have super-high market share.
- GUPPY’s was listed 18mos ago, and the founder wants out. The deal is a nice premium (+86%) but it isn’t as generous a deal as it could be.
- That said, the shareholder structure looks like this deal gets done pretty easily.
Pause/Pullback Underway; Downgrading Europe and Mexico; Buys in Services, Tech, Comm, Healthcare
- We see global equities (MSCI ACWI) going through a pause/pullback amid short-term breakouts in the U.S. dollar (DXY) and global sovereign 10-year yields.
- A rising DXY and climbing yields is a near-term headwind, and we could continue to see more choppy price action in the weeks ahead.
- With that said, as long as the DXY remains below $106, the 10-year Treasury yield remains below 4.35%, and ACWI-US is above $98, we would view pullbacks as buying opportunities.
Softbank (9984 JP): Big Fat NAV Discount, but Headwinds Outweigh Tailwinds Going Forward
- SoftBank group’s headline NAV discount is over 50%, factoring in the T-Mobile shares windfall at December-end
- SoftBank Corp is looking to IPO digital payments company PayPay, which should also be a positive driver for SoftBank Group shares going forward, but only a marginal one
- Arm shares have been defying gravity, but we see downside risk going forward, as well as questions over SVF1 and SVF2 private company valuations; and the threat of JPY appreciation
What Can Be Done to Make the Independence of the Committee Function that Investors Have Questioned?
- While disclosure of committee activities in annual securities report provides clues to the independence of committee, this might create higher hurdle for moving to Company with US type 3 Committees.
- Based on the premise that disclosure of committee activities can change management’s mindset and enable committees to function, more specific details should need to be disclosed to all listed companies.
- Many companies have nominating committees that meet 1-2 times a year before the AGM. Few companies have a Succession Plan, which is of great interest to investors.
💡 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
