In today’s briefing:
- Keisei Electric Investor Activism Update: The Vote Count Could Shake Keisei’s Board
- Aisin (7259) | Nine Months Ago
- Toenec (1946 JP) Offering – Nearly $50mm on SmallCap Utility Infra Co as Chubu EPCO Sells Down
- Quiddity JPX-Nikkei 400 Rebal 2024: Final Expectations
- Toyo Corporation (8151 JP) – Initiating Coverage
- 3Q FOLLOW-UP – Carta Holdings (3688 JP)
Keisei Electric Investor Activism Update: The Vote Count Could Shake Keisei’s Board
- Palliser’s proposal failed to meet the challenging two-thirds threshold at the AGM. Given the ownership landscape, this outcome was anticipated.
- Palliser nearing 50% approval at Keisei’s AGM could signify a triumph, potentially leading to significant pressure on management and a positive shift in share price performance.
- Keisei Electric Railway Co (9009 JP)‘s valuation, now attractively low post a 33% drop and with a potential OP guidance hike, presents minimal downside at a 26.0x EV/OP multiple.
Aisin (7259) | Nine Months Ago
- Nine months have passed since Aisin announced a transformative MTP. Investors remain sceptical that it will deliver higher returns.
- Improving margins on hybrid transmissions, new products for BEVs and better capital allocation could deliver 70% upside for investors.
- The key risk is the assumption that operating margins can rise above 8% versus the historical average of 5%.
Toenec (1946 JP) Offering – Nearly $50mm on SmallCap Utility Infra Co as Chubu EPCO Sells Down
- Today, Toenec Corp (1946 JP) – an integrated facilities company 50+% owned by Chubu Electric Power Co (9502 JP) announced Chubu EPCO would sell down 7.7% to go to 43%+.
- This is surprising. It suggests there are more selldowns to come. It’s also “big” at 88 days of ADV and about 26% of Max Real World Float (85% retail).
- This is an odd sell-down. Chubu EPCO obviously doesn’t want to buy it in. That means overhang for years.
Quiddity JPX-Nikkei 400 Rebal 2024: Final Expectations
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index provider in August every year. The reference period for the August 2024 index rebal event is now complete.
- In this insight, we take a look at our final expectations for ADDs and DELs.
Toyo Corporation (8151 JP) – Initiating Coverage
- Toyo Corporation is a trading company specializing in measurement technologies.
- With several initiatives and strong structural demand in the electric vehicles space in particular, we expect the company to achieve higher revenue and profitability.
- Higher recurring revenue and proprietary product ratios will support a margin improvement in the future.
3Q FOLLOW-UP – Carta Holdings (3688 JP)
- Operating profit for 1Q (Jan-Mar) FY2024/12 was ¥985 mn, already achieving 65.7% of progress in 1Q against the full-year target.
- Reason: a steady growth in programmatic advertising business including the collaboration business with Dentsu and the drastic cost reduction implemented in 2023 helped, while the bottoming out of reservation-based advertising business was not yet recognized in 1Q FY2024/12.
- In addition, the phasing out of the use of third-party Cookies in Google Chrome, which was included in the initial performance plan as a downside risk, has been postponed to 2025 or later.
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