In today’s briefing:
- StubWorld: Barito Renewables Rolling Over – More To Come. Also Kyocera/KDDI
- KKR ¥8,800 Takeover of Fuji Soft (9749) – Details and Arb Grid
- Fuji Soft (9749 JP): KKR Pre-Conditional Tender Offer at JPY8,800
- Money Forward (3994): A Must-Buy Amid Yen Volatility
- Terumo Corp (4543 JP): Stellar Performance in Q1; Cost Control Measures Are Bearing Fruits
- en Japan Inc (4849 JP): Q1 FY03/25 flash update
- Broadleaf (3673 JP): 1H FY12/24 flash update
- Epco Co Ltd (2311 JP): 1H FY12/24 flash update
- Neturen Co Ltd (5976 JP): Q1 FY03/25 flash update
- Toyobo Co Ltd (3101 JP): Q1 FY03/25 flash update
StubWorld: Barito Renewables Rolling Over – More To Come. Also Kyocera/KDDI
- Barito Renewables Energy (BREN IJ) is down 19% in the past month. But still accounts for ~730% of parent Barito Pacific (BRPT IJ)‘s market cap. Still unsustainable.
- Preceding my comments on the Barito complex AND the Kyocera Corp (6971 JP) / KDDI Corp (9433 JP) Holdco, are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation (sub/parent) >20%.
KKR ¥8,800 Takeover of Fuji Soft (9749) – Details and Arb Grid
- KKR has announced its previously leaked takeover of Fuji Soft Inc (9749 JP). Two activists with 30+% between them have agreed to tender at ¥8,800.
- Given what the founder, crossholders, and other arbs own, this gets done easily. Congrats on the win to the activists.
- We will see more activism and more pressure on under-earning companies to go private to clean themselves up outside the public eye. Big opportunities for years.
Fuji Soft (9749 JP): KKR Pre-Conditional Tender Offer at JPY8,800
- Following media reports, Fuji Soft Inc (9749 JP) announced a pre-conditional tender offer from KKR at JPY8,800 per share, a 1.0% discount to the last close price of JPY8,890 (8 August).
- The pre-condition is approvals under competition laws of Japan, Vietnam and possibly Belgium. The offer is anticipated to commence in mid-September.
- The offer is a knockout bid and the culmination of an auction process. The board’s recommendation and the irrevocables from activist shareholders ensure this deal is done.
Money Forward (3994): A Must-Buy Amid Yen Volatility
- Amidst the volatility in the Japanese yen, companies like Money Forward, with a strong domestic revenue base and minimal exposure to forex risk, present an attractive investment opportunity.
- Despite broader market uncertainties, Money Forward continues to demonstrate impressive growth, with its corporate ARR surging by 38% YoY in the most recent quarter, signaling sustained momentum.
- The recent agreement to divest 49% of its non-core B2C segment, Money Forward ME, underscores the significant undervaluation of its core operations.
Terumo Corp (4543 JP): Stellar Performance in Q1; Cost Control Measures Are Bearing Fruits
- Terumo Corp (4543 JP) has reported record high quarterly revenue and profit in Q1FY25, thanks to strong demand across all the business segments, effects of pricing measures, and favorable Fx.
- With the steady progress in profit improvement measures, Q1FY25 gross profit margin (53.3%) reached to its highest level since Q2FY22. Operating and net profit growth outpaced that of revenue.
- Amid currency uncertainties and inflation, Terumo has maintained its full-year FY25 guidance issued in May. Growth will be driven by US and Europe owing to the sustained increase in demand.
en Japan Inc (4849 JP): Q1 FY03/25 flash update
- Sales decreased 1.5% YoY to JPY16.2bn, while operating profit increased 124.2% YoY to JPY1.7bn.
- Cost of sales decreased 9.2% YoY to JPY3.2bn, and SG&A expenses declined 7.1% YoY to JPY11.3bn.
- Overseas segment sales declined due to external factors, with a 43.8% YoY drop in operating profit to JPY135mn.
Broadleaf (3673 JP): 1H FY12/24 flash update
- Revenue for 1H FY12/24 was JPY8.4bn, with an operating loss of JPY44mn and pre-tax profit of JPY16mn.
- Cloud services revenue increased 63.4% YoY, while packaged systems revenue decreased 6.2% YoY.
- Full-year FY12/24 earnings forecast revised: pre-tax profit to JPY100mn and profit attributable to owners of the parent to JPY90mn.
Epco Co Ltd (2311 JP): 1H FY12/24 flash update
- Revenue for 1H FY12/24 was JPY2.8bn (+16.2% YoY), with operating profit at JPY173mn (+216.5% YoY).
- Renewable Energy Service business revenue was JPY688mn (+27.2% YoY), with a recurring loss of JPY25mn.
- Design Service business revenue was JPY1.1bn (+14.7% YoY), with recurring profit at JPY174mn (+33.3% YoY).
Neturen Co Ltd (5976 JP): Q1 FY03/25 flash update
- Revenue increased by JPY13mn (+0.1% YoY), with Specialty Steel and Wire Products up JPY171mn (+1.9%) and Induction Heating down JPY158mn (-3.1%).
- Operating profit rose by JPY124mn (+45.9% YoY), with Specialty Steel and Wire Products up JPY104mn and Induction Heating up JPY21mn (+7.3%).
- Full-year FY03/25 forecast progress rates: 22.5% for revenue, 19.7% for operating profit, 26.1% for recurring profit, 23.4% for net income.
Toyobo Co Ltd (3101 JP): Q1 FY03/25 flash update
- Sales increased JPY8.1bn (+8.4% YoY) due to higher sales in Films, Environment and Functional Materials, and Functional Textiles.
- Operating profit rose JPY3.2bn, with increased profit in Films, Environment and Functional Materials, Functional Textiles, and Real Estate segments.
- Biotechnology business sales and segment profit details are missing; pharmaceuticals contract manufacturing improved profitability after FDA warning letter close-out.
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