In today’s briefing:
- Japan Post Bank (7182) – The October TOPIX FFW Adjustment
- Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- Appier (4180) | Be Happier
- Shionogi & Co (4507 JP): Non-Recurring Income Lifts Q1 Revenue; FY24 Guidance Reiterated
- Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing
- Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable
Japan Post Bank (7182) – The October TOPIX FFW Adjustment
- Japan Post Bank (7182 JP) was effectively re-IPOed in March when Japan Post Holdings (6178 JP) offered more than a BILLION shares against the 400mm shares then in float.
- It was a huge offering. A huge increase in float. Lots of immediate liquidity. A PERFECT opportunity for the TSE to do an ad hoc FFW change. But they didn’t.
- Then in June they lowered the FFW (on a technicality). That leaves a big upweight in October. In this insight we measure the opportunity.
Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
- In March 2023, Japan Post Holdings (6178 JP) sold ¥1.1trln of shares in Japan Post Bank (7182 JP), lowering its stake considerably, raising float. There will be a TOPIX upweight.
- In May, with earnings, they announced their intention to buy back ¥300bn of shares or up to 10% of shares out. Today, they announced the details. ¥300bn through March end.
- In a ¥300bn ToSTNeT-3 tomorrow, the govt will sell back ¥105.7bn. That leaves a residual worth examining. So we examine.
Appier (4180) | Be Happier
- Strong Q2 results with revenue +42% yoy versus +33% in Q1
- Gross margin expansion to 51.3% on improving AI algorithm performance
- Stock down around 20% over past couple of months, No change to bullish growth forecasts.
Shionogi & Co (4507 JP): Non-Recurring Income Lifts Q1 Revenue; FY24 Guidance Reiterated
- In Q1FY24, Shionogi & Co (4507 JP) recorded 52% YoY revenue growth to ¥109B, reflecting a one-time payment received for the transfer of co-development and co-commercialization license for ADHD drugs.
- Shionogi has reiterated FY24 guidance. The company expects FY24 revenue of ¥450B (up 6% YoY), operating profit of ¥150B (up 1% YoY), and net profit of ¥155B (down 16% YoY).
- Despite competition, Xocova captured a 60% market share of the treatment group patients in Japan. Over a six-month period since emergency approval, more than 70K patients have used Xocova.
Now Is the Time to Seek Ingenuity in Cash Allocation, Not Lament the Decline in Equity Financing
- Companies enjoy the benefits of going public, as a larger market capitalization expands their financing and makes it easier to acquire other companies, without capital raising through equity issuance.
- In a market economy, cash returned to shareholders through share buybacks etc is rationally allocated by investing it in companies that need more funds or are worthy of investment.
- Companies should successfully communicate their strategies for expanding corporate value and how to use cash to do so. More such companies will lead to the expansion of Tokyo market.
Freee: Earnings in Line With Guidance; Medium-Term Plan Seems Attainable
- Freee reported 4QFY06/23 results today. Revenue increased 39.6% YoY to ¥5.4bn (vs consensus ¥5.32bn) while operating losses increased to ¥3.0bn from ¥724m in 4QFY06/2022 (vs consensus ¥2.5bn).
- Freee KK (4478 JP) ’s full-year revenues and operating losses were in line with the company’s guidance, and increased losses were due to investments related to growth and customer acquisition.
- The company’s medium-term plan expects revenues of more than ¥50.0bn by FY06/2027E and operating profits by FY06/2025E which seems attainable to us.
💡 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
