In today’s briefing:
- Denso – Thoughts On The Cross-Holdings Sell-Down
- Itoen Pref (25935 JP) – Big Discount, Big Buyback, No Big Governance Change
- Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership
- 2024 High Conviction – CyberAgent: Worst Seems to Be Over
- (Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax
- Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US
- Toyota Motor Corporation: Market Dynamics in China & the Impact on Toyota’s Electric Vehicle Strategy! – Major Drivers
Denso – Thoughts On The Cross-Holdings Sell-Down
- The trend of governance reform in Japan continues with Toyota, Toyota Industries and Aisin selling shares of Denso.
- Denso is buffering some of the flow impact by repurchasing roughly half of the shares to be sold.
- While the size of these moves is relatively large we believe their impact could be disproportionately large for the market as a whole.
Itoen Pref (25935 JP) – Big Discount, Big Buyback, No Big Governance Change
- This is always a tough subject, but every now and then I throw myself on the mercy of the ho-humming crowd and write about the Ito En Prefs (25935 JP).
- No strong catalyst. Limited capacity for strongly better governance. Even less apparent corporate interest in good governance.
- But we have a mini-catalyst, and it has been a while, and I think there IS a good way to think about this stock, so here’s another crack at it.
Sapporo Holdings: Activist Investor 3D Investment Partners Assumes Majority Ownership
- Last week, activist investor 3D Investment Partners raised its stake in Sapporo Holdings (2501 JP) by an additional 13%, cementing its position as the majority shareholder in the business.
- This suggests the activist investor is optimistic about successfully advancing their proposals.
- If investment properties are sold or spun off, and Alcoholic Beverages and Food & Soft Drinks undergo the suggested turnaround, we anticipate an additional 80-100% upside in the near term.
2024 High Conviction – CyberAgent: Worst Seems to Be Over
- CyberAgent Inc (4751 JP) (CA) is a Japan-based media and entertainment company offering media, internet advertising, smart games and investment development businesses in Japan.
- The gaming business of the company has collapsed with the slowdown of hit title UMA MUSUME while titles released after UMA MUSUME have failed to perform satisfactorily.
- Profitability of Internet advertising and media are expected recover and seems that worst is over for the games business as several titles are slated for release in the near future.
(Mostly) Asia M&A, Nov 2023: Taisho Pharma, CIMC Vehicle, CMIC, Japan Best Rescue, Shidax
- For the month of November 2023, 16 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$13bn.
- The average premium for the new deals announced (or first discussed) in November was 41%. The average YTD is 38% (97 deals).
- This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.
Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US
- Kobayashi Pharmaceutical Co (4967 JP) witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.
- Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).
- By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.
Toyota Motor Corporation: Market Dynamics in China & the Impact on Toyota’s Electric Vehicle Strategy! – Major Drivers
- Toyota Motor Corporation delivered a positive result and managed an all-around beat in the last quarter.
- Consolidated vehicle sales reached 114.1% of the previous fiscal year, totaling 4,744,000 units.
- Toyota and Lexus brand vehicle sales amounted to 5,172,000 units, representing 109.1% of the same period last fiscal year.
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