In today’s briefing:
- Nintendo (7974) | Game Over for Switch
- Reducing Cross Shareholdings Is Necessary to Increase the Effectiveness of Engagement
- Kameda Seika (2220 JP): Q1 FY03/25 flash update
- Toyo Business Engineering (4828 JP): Q1 FY03/25 flash update
- Dream Incubator (4310 JP): Q1 FY03/25 flash update
- Stella Chemifa (4109 JP) – Showing Signs of Early Growth
Nintendo (7974) | Game Over for Switch
- Nintendo missed Q1 with Operating income coming in at Y54.5b (-71% YoY) vs our estimate Y116b and the street at Y94b
- Switch 2 hardware and software units sold are now suffering from buyer fatigue as consumers await the next-gen console
- The stock will likely fall quite sharply over the next week. Looking for good buying opportunity in anticipation of the next console cycle
Reducing Cross Shareholdings Is Necessary to Increase the Effectiveness of Engagement
- Signs of change in companies that have improved their capital profitability and valuations can be seen in their policy shareholdings/total assets.
- Companies with fewer policy shareholdings, as measured by (policy shareholdings + equity holdings)/total assets, tend to have the best values for valuation, ROE, and ROA, and vice versa.
- To measure the seriousness of reducing cross-shareholdings, as long as the company has the voting right of cross-shareholdings in retirement benefit trust, the deemed shares should be included in cross-shareholdings.
Kameda Seika (2220 JP): Q1 FY03/25 flash update
- Sales rose JPY1.8bn (8.3%) YoY, driven by higher sales in Domestic Rice Cracker, Overseas, and Food businesses.
- Operating profit increased JPY375mn (53.6%) YoY, with significant profit growth in Domestic Rice Cracker and Food businesses.
- Revised FY03/25 forecast projects sales of JPY102.0bn (+6.8% YoY) and net income of JPY3.8bn (+68.4% YoY).
Toyo Business Engineering (4828 JP): Q1 FY03/25 flash update
- Orders were JPY4.7bn (-4.5% YoY) and revenue was JPY5.0bn (+7.2% YoY), reaching a record high.
- Operating profit was JPY1.2bn (+16.7% YoY) with an OPM increase of 1.9pp to 23.2%.
- mcframe license revenue was JPY1.3bn (+22.0% YoY), breaking the record high for the Products business.
Dream Incubator (4310 JP): Q1 FY03/25 flash update
- In Q1 FY03/25, consolidated sales were JPY1.6bn (+38.5% YoY), with an operating profit of JPY48mn (JPY182mn loss in Q1 FY03/24).
- Business Production segment reported sales of JPY1.1bn (+15.0% YoY) and an operating loss of JPY70mn (JPY107mn profit in Q1 FY03/24).
- Venture Capital segment reported sales of JPY520mn (+145.3% YoY) and an operating profit of JPY378mn (JPY17mn loss in Q1 FY03/24).
Stella Chemifa (4109 JP) – Showing Signs of Early Growth
- Stella Chemifa Corporation (hereafter referred to as “the Company”) specializes in the manufacture and sale of hydrofluoric acid and fluorine- related compounds.
- Hydrofluoric acid is highly functional and used in a wide range of applications, as well as being extremely toxic and corrosive, making it extremely difficult to handle.
- In particular, ultra-high purity hydrofluoric acid is required for semiconductor manufacturing, and the Company, with its strong R&D and technological capabilities, has enjoyed great success in this area.
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