In today’s briefing:
- JIC Launches a NOT-¥1trln Tender Offer for JSR (4185). Welcome? Yes. Overwhelming? Meh.
- JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350
- Tryt IPO – The Positives – Supportive Macro Backdrop and Has Weathered the Pandemic Well
- The IPO Shot in the Arm for Softbank (9984 JP), but Is It Enough?
- Medley (4480 JP): 2023 Started on Strong Note; Full-Year Guidance Reaffirmed; Mid-Term Plan Revised
- Yamaha Motors (7272) | Choppy Waters Ahead
- Takamiya Co., Ltd (2445 JP) – 23/3 Full Year Follow-Up
- Japan System Techniques (4323 JP) – FY23/3 Full Year Follow-Up
JIC Launches a NOT-¥1trln Tender Offer for JSR (4185). Welcome? Yes. Overwhelming? Meh.
- Japan Investment Corp (JIC) has launched a Tender Offer on top photoresist maker JSR Corp (4185 JP), at ¥4,350/share.
- That is a decent price, but it is not overwhelming. Furthermore, process for determining (and understanding) “fair” remains inadequate.
- Significant foreign ownership, a high price, Japanese equity excitement, etc, all make this a situation where we likely see a pop (the last bit), a fade, then a re-drift better.
JSR Corporation (4185 JP): JIC’s Pre-Conditional Tender Offer at JPY4,350
- JSR Corp (4185 JP) has recommended JIC’s pre-conditional tender offer of JPY4,350 per share, a 34.5% and 10.6% premium to the undisturbed price and last close, respectively.
- The pre-conditions relate to various country approvals. China’s approval should be challenging due to Japan’s recent curbs on Chinese exports of chipmaking equipment.
- The offer is long-dated and opens in late December. The offer price is attractive compared to peer multiples and just a touch below the all-time share price high.
Tryt IPO – The Positives – Supportive Macro Backdrop and Has Weathered the Pandemic Well
- Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- In this note, we will talk about the positive aspects of the deal.
The IPO Shot in the Arm for Softbank (9984 JP), but Is It Enough?
- We believe that Masa’s AI predictions and ambitions in the AGM presentation may well need a reality check; nonetheless, Softbank subsidiary Arm is a beneficiary of increasing AI applications
- The prospective Arm IPO is a key driver in the recent Softbank group share price rally; we look at AMD’s acquisition of Xilinx for an indication of Arm’s potential valuation
- Softbank group’s stated NAV discount narrowed by 19 pp to 31%; we explore Arm IPO valuation scenarios for NAV upside but we only see Softbank upside in a super-premium valuation
Medley (4480 JP): 2023 Started on Strong Note; Full-Year Guidance Reaffirmed; Mid-Term Plan Revised
- Medley (4480 JP) started 2023 on a strong note, with 1Q23 revenue increasing 56% YoY to ¥4.4B, mainly driven by 83% YoY revenue growth in medical platform business.
- Despite better-than-usual progress in Q1 result, Medley did not change 2023 guidance. However, the company sees a strong possibility of surpassing 2023 profit targets at the EBITDA level and below.
- Medley has revised its mid-term target and brough forward the timeline for achievement of the goals by one year. The company now aims to achieve revenue of ¥23B in 2024.
Yamaha Motors (7272) | Choppy Waters Ahead
- Yamaha Motors had blow-out 1Q results. The 20% share price rally since then suggests much of the good news is in the price
- We are concerned that deteriorating macro-economic conditions in the US due to higher interest rates could derail demand for marine engines and boats
- The stock price of US peer, Brunswick has already started to correct. Yamaha now trades at a premium valuation
Takamiya Co., Ltd (2445 JP) – 23/3 Full Year Follow-Up
- FY23/3 full-year results were announced in the last month.
- In its consolidated earnings, Operating profit rose 33.9%, ¥2,253 mn, on a 5.3% rise in sales, to ¥41,894 mn. Ordinary profit was up 22.9%, to ¥2,400 mn, and net profit rose 51.3%, to ¥1,460mn.
- Compared to the company’s forecast at the time of the 3Q results announcement, net sales fell short by about 7%, but operating profit and net profit were in line.
Japan System Techniques (4323 JP) – FY23/3 Full Year Follow-Up
- Japan System Techniques announced itsfull-year results for FY23/3 after the close of the market on Friday, May 12.
- Operating profit rose 19.3%, to ¥2,385 mn, on a 9.9% rise in sales, to ¥23,519 mn.
- Ordinary profit rose 19.4%, to ¥2,450 mn, and net profit rose 33.2%, to ¥1,772 mn.
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