In today’s briefing:
- KDDI (9433) – Own Share Tender Offer, Toyota To Sell (Gasp!)
- JSR Corporation (4185 JP): Tender Offer Risk/Reward
- Fanuc (6954) | Earnings Miss; Guidance Slashed
- Investors Should Continue to Demand that Comparable and Necessary Human Capital Disclosures Are Made
KDDI (9433) – Own Share Tender Offer, Toyota To Sell (Gasp!)
- Today, with Q1 earnings, which I found less than great, KDDI Corp (9433 JP) announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.
- The Tender Offer – at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) – goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.
- Toyota Motor (7203 JP) has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.
JSR Corporation (4185 JP): Tender Offer Risk/Reward
- JSR Corp (4185 JP)‘s pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement on 26 June, the gross spread has averaged 6.4%.
- The wide gross spread reflects the risk in satisfying the pre-conditions related to country approvals, particularly in China. JIC, unusually can waive all or part of the conditions precedent.
- The wild card is geopolitical developments. There are three China approval scenarios. The likely scenario is the deal approval under a normal procedure with a delay to the tender start.
Fanuc (6954) | Earnings Miss; Guidance Slashed
- Fanuc reported 1Q3/24 operating profit of ¥32.6 billion (-26.3% YoY), missing street expectations at around ¥43 billion
- Fanuc cut full year guidance for operating profit to ¥118 billion (-38% YoY), way below street estimates of ¥176 billion
- Turning bearish. We think the stock will essentially tread water given lack of catalysts over next 6-9 months and valuations
Investors Should Continue to Demand that Comparable and Necessary Human Capital Disclosures Are Made
- Few companies disclose human capital quantitatively, and most do so in text without numbers. Rarely do companies like Sysmex show how much added value their human capital investments have generated.
- To ensure that information necessary to understand how much value investment in human capital creates is disclosed, investors should scrutinize annual securities reports to identify areas for improvement in disclosure.
- Human capital and diversity disclosures are not available in a database. Allowing comparisons over time in the same company and comparative analysis with other companies will advance companies’ efforts.
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