In today’s briefing:
- J Tower (4485) – Once Ambitious, Still High Growth, Sells Itself Low/Cheapish.
- JTOWER (4485 JP): DigitalBridge’s 162% Takeover Premium Offer Is Opportunistic
- Piolax (5988 JP): Murakami Becomes a Substantial Shareholder
- Appier (4180) | The Hidden Gem in AI Marketing
- Qb Net Holdings (6571 JP): Full-year FY06/24 flash update
- Sun* (4053 JP): 1H FY12/24 flash update
- FaithNetwork Co Ltd (3489 JP): Q1 FY03/25 flash update
- Ferrotec Corp (6890 JP): Q1 FY03/25 flash update
- Hikari Tsushin (9435 JP): Q1 FY03/25 flash update and dividend forecast revision
- Impress Holdings (9479 JP): Q1 FY03/25 flash update
J Tower (4485) – Once Ambitious, Still High Growth, Sells Itself Low/Cheapish.
- JTower (4485 JP) IPOed itself Dec-2019 at ¥1,600/share. An 8-bagger in a year, fell by half, doubled, fell 70%, then doubled, fell 35%, up 50%. That’s the first 3yrs.
- Since then, the trend has been lower. The stock is down 80+% in 2 years, especially painful after an equity raise at just under ¥5,000 6 months ago.
- But the stock today closed at ¥1,430, and the Tender Offer is at ¥3,600. A 150% premium. That’s big, but it may be “too low.” An interesting case.
JTOWER (4485 JP): DigitalBridge’s 162% Takeover Premium Offer Is Opportunistic
- JTower (4485 JP) has recommended a tender offer from DigitalBridge Group (DBRG US) at JPY3,600, a 161.8% premium to the undisturbed price of JPY1,375 (13 August).
- Despite the hefty takeover premium, the offer is light (compared to historical trading ranges and the recent placement) and opportunistically timed (the share price has fallen 61% since 9 May).
- Nevertheless, barring a spurt of activism, the offer should succeed as the required 40.7% minority acceptance rate is not onerous and should be comfortably met by Japanese cross-holders.
Piolax (5988 JP): Murakami Becomes a Substantial Shareholder
- Murakami’s entities, City Index Eleventh and City Index Third, reported a 5.05% position in Piolax Inc (5988 JP). The purchases were from 11 June to 6 August over 60 days.
- Murakami’s average buy-in price over the last 60 days was JPY2,286.61 per share, a 0.7% discount to the last close price.
- Murakami’s disclosure suggests two possibilities: the start of an activist campaign or a short-term pump-and-dump play. The former is likely as Piolax is cash-rich with a P/B less than 1x.
Appier (4180) | The Hidden Gem in AI Marketing
- Appier achieved 32% YoY sales growth in Q2, driven by strong US market performance and balanced revenue from both new and existing customers.
- The company’s EBITDA margin improved to 13%, reflecting strong operating leverage despite ongoing investments in growth initiatives.
- Trading at a 2.9x EV/FY25 revenue multiple, Appier is undervalued relative to peers, with significant upside potential from sustained growth and strategic initiatives.
Qb Net Holdings (6571 JP): Full-year FY06/24 flash update
- Full-year FY06/24 revenue increased 8.8% YoY to JPY24.8bn, driven by higher domestic revenue, despite a 1.1% YoY decline in operating profit.
- FY06/25 earnings forecast projects revenue of JPY25.7bn (+3.8% YoY) and operating profit of JPY1.9bn (-10.2% YoY), prioritizing salon expansion.
- The company opened 20 new salons and closed 30, resulting in a net decrease of 10 salons to 691.
Sun* (4053 JP): 1H FY12/24 flash update
- Revenue: JPY6.5bn (+6.5% YoY), Operating profit: JPY727mn (-15.6% YoY), Recurring profit: JPY697mn (-31.7% YoY).
- Number of recurring revenue customers at end-Q2: 127 companies (+9.5% YoY), Monthly ARPU in Q2: JPY5,080,000 (-4.5% YoY).
- Revenue for Creative & Engineering service line: JPY5.7bn (+7.4% YoY), Talent Platform service line: JPY451mn (+3.2% YoY).
FaithNetwork Co Ltd (3489 JP): Q1 FY03/25 flash update
- Sales increased to JPY2.0bn (+46.2% YoY), but operating loss widened to JPY425mn, with recurring loss at JPY1.8bn.
- Real Estate Investment Support segment sales rose 50.6% YoY, but operating loss widened to JPY469mn.
- Real Estate Management segment sales grew 18.7% YoY, with operating profit up 129.4% YoY to JPY44mn.
Ferrotec Corp (6890 JP): Q1 FY03/25 flash update
- Q1 FY03/25 results: Sales JPY61.1bn (+16.9% YoY), Operating profit JPY7.0bn (-1.4% YoY), Recurring profit JPY8.2bn (+7.7% YoY), Net income JPY4.8bn (+11.6% YoY).
- Segment sales: Semiconductor Equipment-related JPY39.9bn (+33.6% YoY), Electronic Device JPY10.0bn (+8.7% YoY), Automotive-related JPY5.8bn (-21.2% YoY), Others JPY5.4bn (-7.4% YoY).
- Revised 1H FY03/25 forecast: Sales JPY120.0bn (+13.8% YoY), Operating profit JPY13.0bn (-0.3%), Recurring profit JPY14.5bn (-4.7% YoY), Net income JPY8.5bn (+1.3% YoY).
Hikari Tsushin (9435 JP): Q1 FY03/25 flash update and dividend forecast revision
- The company reported revenue of JPY146.2bn (+4.3% YoY) and operating profit of JPY27.2bn (+13.6% YoY) in Q1 FY03/25.
- Effective Q1 FY03/25, the company adopted a new segmentation with seven reportable segments, retroactively adjusted for Q1 FY03/24.
- Financial income was JPY35.1bn (+68.8% YoY), and the company decided to pay a quarterly dividend of JPY156 per share.
Impress Holdings (9479 JP): Q1 FY03/25 flash update
- Revenue: JPY3.2bn (-3.5% YoY), Operating loss: JPY185mn, Recurring loss: JPY161mn, Net loss: JPY175mn.
- Content Business: Revenue from publishing and electronic publishing declined; Internet Media services revenue increased; Solutions business revenue increased.
- Platform Business: Revenue rose due to robust sales of partner publishers’ electronic publications and books; operating profit decreased.
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