In today’s briefing:
- MitCorp (8058 JP) Earnings and Buyback – Shareholder Structure Matters
- TOPIX Inclusions: Who Is Ready (May 2023)
- ZUIKO (6279 JP) Move to TSE Prime and TOPIX – Again, Shareholder Structure Matters
- Panasonic (6752) | Eyes Record Profit as Battery Business Shines
- Beenos: Holds 133% of Its Market Cap in Cash, GoTo Shares, VC Investments & Investment Securities
- Fujifilm FQ4: Strong Earnings Beat and There’s Further Upside
MitCorp (8058 JP) Earnings and Buyback – Shareholder Structure Matters
- Mitsubishi Corp (8058 JP) yesterday announced earnings, forecast for FY23, higher dividend guidance, and a buyback. The headline number is 6% of shares and ¥300bn (which is nearer 4% now).
- ¥200bn of that ¥300bn is actually FY2022 “Additional Return” tacked onto a ¥100bn buyback for this year (FY23).
- As is often the case, Shareholder Structure Matters. Because Berkshire Hathaway owns a large chunk of stock (7.4% according to interviews), that carves out a fair chunk not for sale.
TOPIX Inclusions: Who Is Ready (May 2023)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- CELSYS (3663 JP) (formerly known as “Artspark”) is a name we have been Bullish on in the last few months as it was a high-probability TOPIX Inclusion candidate.
- In the last couple of trading days, the stock has popped more than 30%. In this insight, we take a closer look at this situation.
ZUIKO (6279 JP) Move to TSE Prime and TOPIX – Again, Shareholder Structure Matters
- Diaper-Making machine maker Zuiko Corp (6279 JP) late last year introduced a shareholder benefit coupon program, and the stock has flown. Earnings improved from the trough too.
- Now that the market cap is high enough, the company has applied to, and is now approved, to join TSE Prime, which means a TOPIX inclusion at end-June 2023.
- With 30 days of 6mo ADV, and much more of longer average ADV, this looks like a win, but there are…. considerations. Shareholder structure matters. Yet again.
Panasonic (6752) | Eyes Record Profit as Battery Business Shines
- Panasonic reported a 13% increase in sales and a 4% increase in net profit for fiscal 2023, driven by strong performance in its lifestyle, automotive, and connect segments.
- Panasonic expects to beat Street consensus operating profit forecasts, reflecting the recovery of auto demand and recognition of tax credits for its battery production
- Panasonic is a key beneficiary of continued expansion of EV market. Stock cheap at 8x EV/EBIT vs historical average of 11x
Beenos: Holds 133% of Its Market Cap in Cash, GoTo Shares, VC Investments & Investment Securities
- Beenos Inc (3328 JP), despite missing earnings and offering smaller-than-expected buybacks, is potentially a deeply undervalued investment.
- Beenos holds 38% of its market-cap in cash 14% in GoTo shares 72% in VC investments and 9% in investment securities, which amounts to over 133% of its current market-cap.
- Distributing these excess assets to investors could potentially generate more than 100% upside.
Fujifilm FQ4: Strong Earnings Beat and There’s Further Upside
- Fujifilm delivered its 4Q and full-year FY03/2023 results today. Revenue and OP increased 15.0% and 63.2% YoY to ¥764.7bn (vs consensus ¥715.7bn) and ¥70.4bn (vs consensus ¥62.5bn) respectively.
- The company’s full-year revenue and OP were above its own guidance as well as consensus, and we think FUJIFILM Holdings (4901 JP) ’s guidance for FY03/2024E is too conservative.
- The market continues to value Fujifilm as an imaging company and not in line with healthcare peers suggesting there is significant upside to the current valuation multiples.
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