In today’s briefing:
- [JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals
- FineToday Holdings (289A JP) IPO: The Bull Case
- FineToday Pre-IPO – The Negatives – Growth and Margins Have Wavered
- Nominating Committee Is Becoming More Active in a Few Companies, but No Sign yet of Spreading to All
- Sanyo Trading (3176 JP) – Conservative FY9/25 Guidance with Potential Avenues to Enhance Returns
[JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
- Mitsui Matsushima (1518 JP) was trading ¥2,800-3,200 earlier this year before Murakami-san bought a large stake. All the news of coal shut down and cash pile were in the price.
- After he bought, the stock popped. It fell back, went sideways in a range, and for 5 weeks has been falling in a straight line.
- There’s a reason for that. But it may not be a great reason. And the stock is in a great place.
Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals
- Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
- In our earlier note, we talked about the placement and ran the deal through our ECM framework.
- In this note, we talk about the updates and share price performance since then.
FineToday Holdings (289A JP) IPO: The Bull Case
- FineToday Holdings Co Ltd (289A JP) is a Japanese personal care business seeking to raise up to US$500 million. It will be listed on 17 December.
- FineToday has four product categories: Hair care, Skin care, Body care, and others. Hair care is the largest category, accounting for 49.0% of 9M24 revenue.
- The bull case rests on return to revenue growth, three-pronged growth strategy, top-quartile profitability and top-tier FCF generation.
FineToday Pre-IPO – The Negatives – Growth and Margins Have Wavered
- CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP) in Japan.
- FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
- In this note, we talk about the not-so-positive aspects of the deal.
Nominating Committee Is Becoming More Active in a Few Companies, but No Sign yet of Spreading to All
- Even the companies with US type 3 committees, which is expected to have higher awareness of corporate governance, there’re differences in the status of nominating committee activities among the companies.
- While doubts about whether the nominating committee is fulfilling its function have not been dispelled, there have been cases of low approval rates for proposals for the election of directors.
- Since discussions in voluntary nominating committees are only advisory, more companies are expected to move to Company with US type 3 Committees, which have statutory nominating committees.
Sanyo Trading (3176 JP) – Conservative FY9/25 Guidance with Potential Avenues to Enhance Returns
- Firm results with a reserved outlook – Q1- 4FY9/24 results were ahead of guidance and highlighted that Q4 FY9/24 trading was in line with expectations, in contrast to a strong start to the year.
- The company made positive developments in improving the sales mix in the Chemicals and Overseas Subsidiaries segments and has increased FY9/24 DPS to ¥55 from the previously guided ¥45, which was a positive surprise.
- Guidance for FY9/25 appears to be conservative in our view. Nevertheless, it telegraphs a slowdown in earnings momentum and mixed earnings visibility with an expected slowdown from life science activity at subsidiary SCRUM Inc., balanced with contributions from large projects in the wood biomass-related business.
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