In today’s briefing:
- Kusuri No Aoki (3549) Big Buyback – Accretive, And May Involve Musical Shares
- Rigaku Holdings (268A JP) IPO: The Bear Case
- Rigaku IPO – Peer Comparison – Compensating for Smaller Scale with Better Growth and Margins
- Onward Holdings (8016 JP): 1H FY02/25 flash update
- Companies Using Outside Board Members for Management and for Matching Numbers Will Widen the Gap
- Zuiko Corp (6279 JP): 1H FY02/25 flash update
Kusuri No Aoki (3549) Big Buyback – Accretive, And May Involve Musical Shares
- The drugstore space in Japan is super-interesting. The stories, the mergers, the activists. And of course, the defence against activists.
- In Feb-2024, Aeon did a deal with an activist to cause a future deal between Tsuruha and Welcia. Aeon also owns a stake in Kusuri no Aoki Holdings (3549 JP).
- The Aoki brothers (CEO and VP) exercised warrants in August and re-arranged their holdings. Now the family owns 34.7%. Today, after Q1 earnings, the company announced a 5+% buyback.
Rigaku Holdings (268A JP) IPO: The Bear Case
- Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million.
- In Rigaku Holdings (268A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on weakening forward growth indicators, China revenue risk, rising cash conversion cycles, mid-tier FCF margin and large post-IPO share overhang.
Rigaku IPO – Peer Comparison – Compensating for Smaller Scale with Better Growth and Margins
- Rigaku Holdings (268A JP) is looking to raise US$762m in its Japan IPO.
- Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
- In our earlier notes, we looked at the firm’s past performance. In this note, we undertake a peer comparison.
Onward Holdings (8016 JP): 1H FY02/25 flash update
- Onward’s FY02/25 forecast: sales JPY210.0bn (+10.7% YoY), operating profit JPY12.5bn (+11.0% YoY), net income JPY8.3bn (+24.8% YoY).
- Q2 FY02/25 sales JPY43.7bn (+8.0% YoY), operating profit JPY181mn, first Q2 profit in 17 years.
- Onward made Wego Co., Ltd. a consolidated subsidiary in Q3 FY02/25, revising full-year sales forecast upward.
Companies Using Outside Board Members for Management and for Matching Numbers Will Widen the Gap
- The first problem is that companies desperately match numbers, and original goal of ensuring board diversity has been lost; the second is the increase in the number of board memberships.
- The low ratio of women in managerial positions has forced companies to rely on outside talent for female board members, which has further increased matching numbers.
- There are problems both for the company that knowingly hires board members to serve concurrently in multiple companies and for the outside board members who knowingly accept such positions.
Zuiko Corp (6279 JP): 1H FY02/25 flash update
- Revenue decreased by 15.6% YoY to JPY8.4bn, primarily due to a drop in adult diaper machinery sales.
- Gross profit margin fell to 16.6%, leading to an operating loss of JPY179mn from a previous profit.
- Net loss attributable to parent shareholders was JPY705mn, affected by tax-effect accounting and stock holding downsizing.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
