In today’s briefing:
- Nidec (6594 JP): India & Nvidia Point the Way Forward
- Freebit Co Ltd (3843 JP): 1H FY04/25 flash update
- The Situation Is Different for REITs that Rely on Capital Increase, Despite the Same Low P/B Issue
Nidec (6594 JP): India & Nvidia Point the Way Forward
- Shipping the first water-based cooling systems for servers equipped with Nvidia’s new Blackwell GPUs and building two new motor factories in India.
- Moving beyond excessive dependence on China while restructuring operations to reduce costs. Sales short of 1H guidnce, but operating profit up.
- Share price down 30% since May and close to its 52-week low. Selling at 17.5x this fiscal year’s EPS guidance, the lowest P/E multiple in a decade.
Freebit Co Ltd (3843 JP): 1H FY04/25 flash update
- In 1H FY04/25, revenue, operating profit, and net income declined YoY, while recurring profit increased 2.1% YoY.
- Excluding fiscal year-end changes, 1H FY04/25 revenue and operating profit grew 8.0% and 15.5% YoY, respectively.
- Revenue and operating profit for 5G Homestyle services increased 5.8% and 25.7% YoY, excluding fiscal year-end impact.
The Situation Is Different for REITs that Rely on Capital Increase, Despite the Same Low P/B Issue
- Repurchasing investment units, increasing dividends through property sales, and increasing EPS through negative goodwill of M&A seem to be the share price raising measures necessary for capital increase for growth.
- When increasing capital amid stagnated REIT stock prices, it’s questionable whether the picture that is drawn after capital increase is reasonable in the face of rising required returns by investors.
- When the profitability of REIT investment companies is in question, it is not surprising that activist investors will focus on management issues, including cost of capital or corporate governance.
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