In today’s briefing:
- Keisei Electric: Distorted Valuation Unveils Opportunity for Activist Investors
- Seino (9076) – More Seino, Seino More. Know What I Mean? Eh Eh? Seino Goes Big on Capital Policy
- NTT: Developing Industry-Specific AI Offerings as AI Becomes One of Government’s Key Focus Areas
- Nippon Shinyaku (4516 JP): FY24 Guidance Falls Short of Mid-Term Target; DMD Drug Growth Slows Down
Keisei Electric: Distorted Valuation Unveils Opportunity for Activist Investors
- Surpassing the pre-COVID average of 49%, the NAV discount currently stands at 61%, implying potential 12% market-neutral returns in the short-term through the recovery of the core transportation business.
- Activist investor influence in distributing Keisei Electric’s ¥1,980bn Oriental Land (4661 JP) stake to existing shareholders could unleash over 150% potential upside, surpassing the earlier mentioned 12% gain.
- Thus, there is high likelihood of Keisei Electric Railway Co (9009 JP)‘s continued outperformance over Oriental Land in the medium term.
Seino (9076) – More Seino, Seino More. Know What I Mean? Eh Eh? Seino Goes Big on Capital Policy
- Three years ago, Seino Holdings (9076 JP) delivered a lot of its cash back to shareholders in a big buyback. They bought back almost 15mm shares (7.5%).
- Since then, they’ve bought another 2.5%. In February, they changed their Dividend Policy to max(2.4% DOE, 30% payout ratio). Then they set a cap and floor on the dividend.
- Four months later they have a new MTMP, and a new Dividend Policy. Simple. 4.0%+ DOE. Div +70% vs last year. Oh… and there’s an 11% buyback.
NTT: Developing Industry-Specific AI Offerings as AI Becomes One of Government’s Key Focus Areas
- Nikkei reported last week that NTT (Nippon Telegraph & Telephone) (9432 JP) is developing a generative AI and plans to offer services to the company’s corporate clients by Next March.
- Over the recent years, NTT has been extensively investing on AI, robotics and other data-driven products and services to boost its top line growth as its core business is saturating.
- AI and semiconductors are two key policy areas of Japanese government for development as the country is dealing with population and other demographic changes.
Nippon Shinyaku (4516 JP): FY24 Guidance Falls Short of Mid-Term Target; DMD Drug Growth Slows Down
- Nippon Shinyaku (4516 JP)‘s FY24 revenue guidance is 3% below mid-term target, while operating and net profits guidance are 20% and 17% below the target, respectively.
- Revenue growth of Viltepso is expected to decelerate to 28% in FY24 from 85% in FY23, dragged by the U.S. sales, which contributes 74% of Viltepso revenue.
- Rival Sarepta Therapeutics (SRPT US) is expected to receive FDA approval for its next DMD gene therapy drug this month, leading to a new competition for Viltepso.
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