In today’s briefing:
- NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang
- Shimano (7309) | Profit Recovery Derailed
- Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24
- Alphawave, TSMC and Lam Research Follow-up, DISCO and Lasertec
- Why Do Only 13% of Companies Mention P/B in Mid-Term Management Plans While Half Had P/Bs Below 1x?
- News Flash – D. Western Therapeutics Institute (4576 JP)
- Oisix: Meal Kit Kaizen
NTT (9432) – LDP Consideration of Full Sale Is Not Necessarily Overhang
- Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
- The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
- As discussed in NTT (9432 JP) – Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT… presumably there are mitigants.
Shimano (7309) | Profit Recovery Derailed
- Shimano reported a 40% drop in operating profit for 2Q and revised down full year guidance
- Bike sales continue to be weak (-19% YoY) in Q2 and 2H outlook is even worse
- We expect the share price to sell-off following the guidance cut. The inventory overhang could take a while to resolve
Terumo Corp (4543 JP): Strong C&V Business Momentum Continues; Profitability to Improve in FY24
- Terumo Corp (4543 JP) recorded highest ever revenue and operating profit in FY23, driven by continued strong growth in C&V business globally, particularly the largest U.S. market.
- C&V business should continue to be the primary driver of Terumo’s growth in FY24 also. The company has guided for C&V revenue of ¥504B in FY24, up 5% YoY.
- Terumo aims to grow profit by double-digit percentage in FY24 and improve profitability through expansion of high-margin products, more assertive pricing policies, and cost reduction measures centered on manufacturing cost.
Alphawave, TSMC and Lam Research Follow-up, DISCO and Lasertec
Alphawave reported last week.
The results were not good; they were great.
I actually am excited to see Tony and the team execute like this. Bookings are growing, and while revenue has not come out yet, it seems very likely they will hit their 2023 revenue estimates.
Why Do Only 13% of Companies Mention P/B in Mid-Term Management Plans While Half Had P/Bs Below 1x?
- Considering that about half of the listed companies had P/Bs below 1x, the fact that 13% of the companies that published medium-term management plans mentioned P/Bs is too small.
- More companies should mention ROE in mid-term business plans, but the reason they don’t is because they recognize that the company isn’t generating return that exceeds its cost of capital.
- While P/B is rising due to rising stock prices, foreign ownership is increasing. In exchange, managers must realize that they need to develop measures for sustainable expansion of corporate value.
News Flash – D. Western Therapeutics Institute (4576 JP)
- DWTI announced that it has updated its development pipeline on DW-1002 licensee Dutch Ophthalmic Research Center (DORC) announcing its decision to develop MEMBRANEBLUE-DUAL® in the US for the indication of ILM and ERM membrane staining during vitreoretinal surgery.
- Since the DW-1002 single-agent formulation TissueBlueTM was launched in the US in 2020, it has been used in over 100,000 surgeries and is preferred by over 40% of U.S. retinal surgeons.
- Combination ophthalmic surgical aid MEMBRANE BLUE-DUAL® (DW-1002 Brilliant Blue G + Trypan Blue) has been used in over 500,000 surgeries in Europe since its launch in 2010.
Oisix: Meal Kit Kaizen
- Oisix Ra Daichi is by far Japan’s largest online food retailer, driven by the popularity of its fresh food and meal kit subscription services.
- Despite some backend problems last year, the company expects its system of continual improvement and expansion of new lines of meal kits to bring strong growth in the medium term.
- The development of the online food market should help boost the company’s prospects. Operating margins have worsened considerably but the company hopes to match the previous peak this year.
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