In today’s briefing:
- Japan Post Bank (7182 JP) ¥70bn ToSTNeT-3 Buyback
- Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- TOPIX Index Upweights: Final Predictions for The “The Big April Basket” 2023
- Mitsubishi Chemical (4188) | Unlocking Value – 50% Upside
- Kansai Paint Placement – Hardly an Outstanding First Offering Since Listing
- Japanese Convenience Stores: Back with a Plan but Muted Growth Ahead
Japan Post Bank (7182 JP) ¥70bn ToSTNeT-3 Buyback
- As expected, Japan Post Bank (7182 JP) has announced their ToSTNeT-3 buyback of ¥70 billion on Day 1 of the potential TN-3 Buyback period.
- Also as somewhat expected, investors and traders pushed up the stock price today after the news there would be a buyback, hoping to buy then sell, or short today’s close.
- Japan Post Holdings (6178 JP) will offer shares. Others obviously will too. How this works and what you have to watch out for discussed below.
Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows
- Today after the close, Kansai Paint (4613 JP) announced a passel of crossholders would sell 26.2mm shares in a Secondary Offer. They also announced a buyback.
- The buyback, spending up to ¥12bn to buy back up to 8.2mm shares, starts after the Offering is delivered, and extends until 15 March 2024.
- This offering reduces cross-holder “strategic holdings” by a third. This will impact FFW. Complicated index impacts will occur over time.
TOPIX Index Upweights: Final Predictions for The “The Big April Basket” 2023
- Some low liquidity stocks in the TOPIX Index carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
- These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will enjoy buying flows from passive trackers of TOPIX.
- In this insight, we take a look at Quiddity’s final predictions for the names that are likely to see their Liquidity Factors removed in April 2023.
Mitsubishi Chemical (4188) | Unlocking Value – 50% Upside
- Investors have completely ignored “The New MCG”. If management can hit EBITDA targets, we see over 50% upside for the stock
- Rapid cost cuts of Y135 billion will be a catalyst for the share price
- Transformation to leaner, more focused group with strategic growth in EVs, hydrogen, semicon and health
Kansai Paint Placement – Hardly an Outstanding First Offering Since Listing
- Kansai Paint’s shareholders aim to raise around US$291m via a secondary follow-on offering. This is a large deal to digest, at 34 days of three month ADV.
- The firm has also mentioned that it will conduct a share buyback of up to 8.2m shares worth approximately 3.5% of TSO or US$87.6m (JPY12bn). This will begin after settlement.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Japanese Convenience Stores: Back with a Plan but Muted Growth Ahead
- The convenience store sector was one of the worst hit by a downturn in sales during the early pandemic, but all three major chains have implemented changes and improvements.
- Results for the first three quarters of FY2022 show that the big companies are almost all trading above 2019 levels already.
- While top line growth at home will be increasingly hard to come by in a saturated sector, innovations will help boost same-store sales a little and profit a bit more.
💡 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
