In today’s briefing:
- BIG ¥500bn Honda (7267) Offering Coming?
- Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Jul24)
- Fast Retailing (9983) | Red Hot Summer
- Daiseki Co Ltd (9793 JP): Q1 FY02/25 flash update
- Key to Look Carefully to See if What Is Disclosed Is Consistent with Profitability and Other Results
BIG ¥500bn Honda (7267) Offering Coming?
- Today just before the close, Reuters came out with an article saying Japan’s four major insurers and some financial institutions would offer ¥500bn of shares in a secondary offering.
- That implies about 275-280mm shares (insurers hold ~195mm). In May, Honda announced a ¥300bn buyback with earnings, with nothing done so far.
- The supply/demand dynamics here are key. There are a lot of moving parts over time. Honda is cheaper than it looks but there are moving parts there too.
Japan CorpGovReport Details: TSE “Mgmt Conscious of Capital Cost/Stock Price” Details (Jul24)
- This month (June) saw 1,673 Corporate Governance Reports filed and 5 new “Mgmt Conscious of Capital Cost/Stock Price” policies filed.
- We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
- We hope this took will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.
Fast Retailing (9983) | Red Hot Summer
- Domestic Uniqlo SSS (including e-commerce) were +14.9% in June. Positive
- Impressive +8.1% increase in customer traffic and +6.3% gain in per-customer spend
- I have a bearish view on Fast Retailing due to rich valuations (25x EV/EBIT). However, the share price may perform well in the run up to the Q3 report.
Daiseki Co Ltd (9793 JP): Q1 FY02/25 flash update
- In Q1 FY02/25, Daiseki reported sales of JPY16.7bn (-6.6% YoY), gross profit of JPY5.9bn (-1.1% YoY), and operating profit of JPY3.9bn (-0.7% YoY).
- Daiseki Co.’s sales increased 7.0% YoY, while DES’s sales fell 28.4% YoY, leading to a consolidated sales decrease.
- Consolidated operating profit for Q1 decreased by 0.7% YoY to JPY3.9bn, with OPM rising 1.4pp to 23.4%.
Key to Look Carefully to See if What Is Disclosed Is Consistent with Profitability and Other Results
- The problem with cross-shareholdings is not simply that they weigh heavily on ROE and ROA improvement, but also that they do not create tension in management.
- The degree of seriousness of the company’s efforts to reduce policy shareholdings is a measure of the improvement in return on capital. The level of seriousness must be monitored.
- The fact that there are inappropriate entries in the items required of prime market listed companies indicates that many companies are not suitable for prime market listed companies.
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