In today’s briefing:
- JFE Holdings (5411) Stock+CB Offering
- JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
- Komatsu (6301) | A Winning Bet on Onshoring and Electrification
- Judicial Decisions Are Also Important to Clarify the Nature of the Diversity Issues
- 1Q Follow-Up – Takamiya (2445 JP)
JFE Holdings (5411) Stock+CB Offering
- Today JFE Holdings (5411 JP) announced it would raise ~JPY 121bn in an equity offering of 55mm treasury shares and JPY 90bn in a Convertible Bond offering.
- ¥125bn will be spent on capex for expansion, ¥75bn for capex, investments, and R&D related to decarbonisation, as well as repayment of debt to 2028.
- This is a heavier than a “normal” equity offering. And recent large-ish equity offerings seem to have more volatility in outcome (post-offer overhang, or squeeze) than previous years.
JFE Holdings Placement – Well Flagged, but Would Probably Need a Wider Correction
- JFE Holdings (5411 JP) is looking to raise around US$870m to fund its capacity expansion plans. Together with the offering, it will undertake a US$610m CB issuance.
- The deal appears to be well flagged with the firm disclosing its JV and other related CapEx plans in its earlier earnings announcement.
- Overall, the new shares would result in a 8.2% dilution and represent 12 days of three month ADV.
Komatsu (6301) | A Winning Bet on Onshoring and Electrification
- We turned bullish on Komatsu a year ago and the stock has since returned over 50%.
- Komatsu is trading at 10x EV/EBIT versus an historical average of 11x, with a target price of ¥5,100/share.
- Komatsu represents a cheaper way to play the theme of onshoring and long-term mining demand from electrification.
Judicial Decisions Are Also Important to Clarify the Nature of the Diversity Issues
- A survey result supports that the fact that women temporarily leave the workplace due to childbirth or childcare is detrimental to their careers.
- Since there’re issues that require solutions not only for companies but for society, judicial decisions will encourage companies to make female employees subject to the same conditions as male employees.
- While more companies may take this ruling as an opportunity to consider conventional HR practices, since cases of employees going to court are rare, some companies may not act immediately.
1Q Follow-Up – Takamiya (2445 JP)
- Takamiya announced its 1Q results for FY24/3 on August 4, after the close of trading.
- Key figures on a consolidated basis were sales of ¥9,896 mn (+9.7% YoY), operating profit rose 125.5% YoY, to ¥409 mn, ordinary profit rose 41.0%YoY, to ¥615 mn, and quartery net profit rose 33.0%YoY, to ¥417 mn.
- An overview by business segment is as follows
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