In today’s briefing:
- JAPAN ACTIVISM: Activists Sell ALL Their Daidoh (3205) In One Day. Oops 😬
- HUGE Asics (7936) Offering – Big Guidance Boost at ATH So Feed the Ducks When They Are Quacking
- Kobe Bussan (3038): The Final Cliff
- ASICS (7936 JP): A US$1.4 Billion Secondary Offering
- ASICS (7936) | Obadele Thompson or Usain Bolt?
- Softbank (9984 JP): Arm Headwinds Building, but NAV Discount Is Attractive
- Allegro MicroSystems Inc.: Electric Vehicle and Hybrid Market Growth in China As A Critical Growth Lever! – Major Drivers
- PR Times Inc (3922 JP): Q1 FY02/25 flash update
- Shin Pro Maint (6086 JP): Q1 FY02/25 flash update
JAPAN ACTIVISM: Activists Sell ALL Their Daidoh (3205) In One Day. Oops 😬
- Daidoh Ltd (3205 JP) saw an activist “win” at its AGM, another activist bought, the stock popped. I wrote about it. 2hrs later, the Board set a new Div Policy.
- ¥100/Yr for 3 years in a row. That was 11% of then-current price. Big activist win for Strategic Capital which owned 25% and Murakami-san who had gone substantial 1wk earlier.
- Today post-close, Strategic Capital reported it sold everything on 5 July, the next day. WOW. That was half of Maximum Real World Float. Oops. Murakami-san sold too.
HUGE Asics (7936) Offering – Big Guidance Boost at ATH So Feed the Ducks When They Are Quacking
- Today after the close, ASICS Corp (7936 JP) announced a very large secondary offering. It points out that as a global brand, it needs global-standard corporate governance.
- As such, it says they’ve been discussing sales with crossholders. But we knew the cross-holders were going to sell. This offering is 85mm shares, ¥210bn at last. That’s big.
- The stock has doubled year-to-date. Today they raised FY guidance BIGLY (+60% OP and NP). Now a huge offering. This seems like a “feed the ducks when they’re quacking” situation.
Kobe Bussan (3038): The Final Cliff
- Kobe Bussan continues to hit new lows relative to the median Japanese retailer, as cheaper alternatives continue to rebound.
- Kobe was one of the greatest beneficiaries in Japan of the Pandemic, but it is stuck at 10% growth which is no longer unusual.
- Kobe’s wholesale model makes it difficult to benefit from food price inflation like other food retailers. Kobe Bussan could drop another 50% before reaching fair value.
ASICS (7936 JP): A US$1.4 Billion Secondary Offering
- ASICS Corp (7936 JP) has announced a secondary offering of up to 85.0 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY218 billion (US$1.4 billion).
- Asics’ goal with the secondary offering is to eliminate cross-shareholdings. Asics also announced a material upgrade to full-year forecasts to offset the impact of the offering.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 23 and 26 July (likely 23 July).
ASICS (7936) | Obadele Thompson or Usain Bolt?
- ASICS is revising up its full year forecasts, now expecting sales to reach a record ¥660 billion , up 15.7% year-over-year. There is a strong currency tail wind.
- Still “you gotta be in it to win it..” ASICS is currently crushing it, while Nike flounders
- A large secondary offering will likely hit the share price in the short term; there are two key risks…but it could be a good opportunity to buy.
Softbank (9984 JP): Arm Headwinds Building, but NAV Discount Is Attractive
- Since Elliott Management emerged as a shareholder in SoftBank group last month, the share price has rallied sharply, largely driven by the further appreciation of the Arm Holding share price
- SoftBank management is currently focused on growing its Gen AI investment portfolio and appears to have shelved share buybacks for now, which is likely to disappoint minority shareholders
- Despite the above challenges and the risk of de-rating at Arm, we remain positive on Softbank shares as they trade at a historically high 54%+ discount to the estimated NAV
Allegro MicroSystems Inc.: Electric Vehicle and Hybrid Market Growth in China As A Critical Growth Lever! – Major Drivers
- Allegro MicroSystems has recently reported their fiscal fourth quarter and full year 2024 results, providing insights into their financial health and future expectations.
- The company managed to surpass its fourth-quarter revenue and earnings per share (EPS) guidance despite facing a challenging macroeconomic environment, highlighting the dedication and efficiency of its team.
- The fiscal year 2024 demonstrated a revenue growth of 8% and an EPS growth of 5%, with notable growth in e-Mobility at 38%, signifying strong market performance and strategic execution.
PR Times Inc (3922 JP): Q1 FY02/25 flash update
- In Q1 FY02/25, revenue was JPY1.9bn (+19.6% YoY), operating profit JPY484mn (+41.0% YoY), net income JPY321mn (+38.9% YoY).
- PR TIMES users totaled 97,948 (+17.2% YoY); Jooto paying users 1,801 (-3.2% YoY); Tayori paying accounts 1,177 (+28.1% YoY).
- SG&A expenses in Q1 FY02/25 increased 5.6% YoY for Sales & Marketing, 13.4% for R&D, 7.6% for General & Administrative.
Shin Pro Maint (6086 JP): Q1 FY02/25 flash update
- Revenue increased by 13.4% YoY to JPY5.8bn, driven by new customers and expanded maintenance services for existing customers.
- Operating profit rose by 32.3% YoY to JPY342mn, with an OPM up 0.8pp YoY to 5.9%.
- Gross profit reached JPY1.3bn (+12.8% YoY), with a GPM of 22.6% (-0.1pp YoY), and SG&A expenses were JPY960mn (+7.1% YoY).
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