In today’s briefing:
- Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
- Asics (7936) | Pumping the Brakes
- Takashimaya (8233): Q3 FY02/24 Update
- Eiken Chemical (4549) | Activists, Alchemy, and the Pursuit of Profit
- StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish
- Round One (4680): Q3 FY03/24 Update
- MS&AD Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell
- Stream Media Corporation (4772): Full-Year FY12/23 Update
- GAKKEN HOLDINGS (9470): Q1 FY09/24 Update
- Tenpo Innovation (3484): Q3 FY03/24 Update
Keisei Electric (9009) Share Buyback – Interesting Dynamics & Opportunity
- In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
- I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
- Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn’t. But it bears watching closely, maybe acting.
Asics (7936) | Pumping the Brakes
- On’s quarterly results disappoint, triggering a 10% stock drop. Meanwhile, ASICS’ share price is up 43% YTD despite modest performance.
- ASICS shareholders advised to consider profit-taking as stock outpaces fundamentals, faces competition from resurging Nike and fast-growing On
- On’s ambitious growth projections threaten ASICS’ market position, with potential market share parity within three years
Takashimaya (8233): Q3 FY02/24 Update
- Takashimaya (8233 JP) was founded in 1831 and is the operator of one of the leading department store companies in Japan.
- Takashimaya began applying the Accounting Standard for Revenue Recognition from the beginning of FY02/23.
- Takashimaya Co., Ltd. announced revisions to its full-year earnings forecasts for FY02/24.
Eiken Chemical (4549) | Activists, Alchemy, and the Pursuit of Profit
- Two activist investors are now on the shareholder registry of Eiken Chemical.
- Eiken has proactively announced a share buyback to return excess cash holdings.
- Eiken has a quality underlying business which generates solid FCF yield. Expect higher shareholder returns in the future.
StubWorld: Keisei’s ToSTNeT-3 Buyback. Stay Bearish
- Keisei Electric Railway Co (9009 JP)‘s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.
- Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Round One (4680): Q3 FY03/24 Update
- Round One Corp (4680 JP) specializes in running amusement complex facilities in Japan, the US, and China.
- FY03/23 results: The company reported sales of JPY142.1bn, operating profit of JPY16.9bn, recurring profit of JPY16.7bn, and net income attributable to owners of the parent of JPY9.7bn.
- In November 2023, the company revised its full-year FY03/24 earnings forecast.
MS&AD Cross-Shareholding – At Least US$20bn of Cross-Shareholding to Sell
- The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.
- MS&AD Insurance (8725 JP) had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Stream Media Corporation (4772): Full-Year FY12/23 Update
- Stream Media Corporation (TSE Growth: 4772; hereafter, “SMC”) is an entertainment company that handles Korean pop culture content, primarily in Japan.
- In full-year FY12/23, SMC reported consolidated revenue of JPY8.9bn, an operating profit of JPY182mn, a recurring profit of JPY191mn.
- SMC forecasts full-year FY12/24 revenue of JPY9.1bn, operating profit of JPY91mn, recurring profit of JPY94mn, and a net income attributable to owners of the parent of JP61mn.
GAKKEN HOLDINGS (9470): Q1 FY09/24 Update
- Gakken Holdings (9470 JP) engages in the educational and healthcare and nursing businesses, providing services for demographics ranging from toddlers to the elderly.
- For FY09/23, revenue was JPY164.1bn, operating profit was JPY6.2bn, recurring profit was JPY6.5bn, and net income attributable to owners of the parent was JPY3.2bn.
- The company will fundamentally reshuffle its portfolio and concentrate resources on priority areas while rebuilding its education business, and optimize the management structure for each business field to restore profitability.
Tenpo Innovation (3484): Q3 FY03/24 Update
- Tenpo Innovation (3484 JP) is a real estate company specializing in restaurant properties.
- FY03/23 results: In its first year of reporting consolidated results, Tenpo Innovation reported full-year revenue of JPY13.1bn, operating profit of JPY1.2bn, recurring profit of JPY1.3bn, and net income of JPY886mn.
- Tenpo Innovation Inc. announced plans to start preparations for a transition to a holding company structure through a company split and changes to its trade name.
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