Daily Brief Japan: Outsourcing Inc, JSR Corp, A&D Company Ltd, Beenos Inc, Japan Business Systems , Pca Corp, World Holdings, Mitsubishi Kakoki Kaisha, AS ONE Corporation and more

• Outsourcing Inc (2427 JP) has been an “interesting” risk arb situation. It was launched as a Cheeky, Opportunistic, Low-Priced MBO. Some bumps after launch turned out to be BAU.
• The stock has not traded above terms since early on in the trade. I expect people are happy to get out. But there is ANOTHER ARB to do here.
• The OTHER ARB is something quite particular to high float, low activism risk arb trades. In some ways better than the traditional arb, but it has some risks.

• Just out this AM, an article in Bloomberg (J) says “people familiar with the matter” suggest the Tender Offer could be launched as early as 19 March. 
• The language regarding the nature of the China regulatory “approval” is different than recent media articles, but they are in the same vein. 
• Original and updated data, information, grids, etc are shown below. 

• Bloomberg reports that JIC will start the JSR Corp (4185 JP) tender as early as 19 March. Separately, SUNY RF filed a response to Inpria/JSR’s 6 March filing last night.
• My reading of JSR and SUNY RF’s filings suggests that the Court is unlikely to conclude that SUNY RF’s lawsuit will be harmed if JIC proceeds with the tender offer.
• JIC seems comfortable taking on the litigation risk (if required). The key risk remains timing. For a late April payment, gross/annualised spread is 0.6%/4.0%.   

• A&D Holon Holdings is a Japanese precision instrument company specializing in industrial measuring, medical equipment, and semiconductor production
• The company’s semiconductor division is driving high growth and profitability, with expected earnings growth of around 50% over the next two years
• Despite strong prospects, A&D Holon Holdings is significantly undervalued, trading at low multiples on FY Mar-2024 estimates

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Beenos Inc (3328 JP) operates cross-border e-commerce websites that allow mainly individual users to buy and sell goods both in Japan and internationally over the Internet.
• In FY09/23, BEENOS reported full-year consolidated revenue of JPY32.5bn, operating profit of JPY4.5bn, recurring profit of JPY4.1bn, and a net income attributable to owners of the parent of JPY2.2bn.
• BEENOS Inc. has announced changes in its consolidated subsidiaries (share transfer).

• In the previous 4Q follow-up report, we examined “Copilot NAVI,” a service released by JBS in November, which includes videos and summary materials as a guide for enterprise users, for Microsoft 365 Copilot, the AI tool embedded in Microsoft 365 applications, to bring efficient answers to users’ instructions and questions through a chat interface (which can be a daunting challenge).
• JBS followed up in December with interactive workshops to experience Microsoft 365 Copilot before deployment.

•  In this report, we examine JBS enterprise cloud security initiatives, which are a top priority for cloud IT systems managers.

• Pca Corp (9629 JP) develops and sells corporate accounting software and other business systems for small and medium-sized companies.
• Full-Year FY03/23 revenue was JPY13.0bn (-3.0% YoY) due to lower replacement demand for the PCA X series of products, support for which ended in December 2021.
• PCA Corporation has announced changes to its dividend policy and revisions to its dividend forecast.

• World Holdings (2429 JP), established in 1993, primarily provides technical staffing and subcontracting services.
• In FY12/23, revenue was JPY213.7bn, operating profit was JPY10.4bn, recurring profit was JPY10.3bn, and net income attributable to owners of the parent was JPY6.2bn.
• The company’s forecast for FY12/24 calls for revenue of JPY252.1bn, operating profit of JPY9.0bn, recurring profit of JPY8.6bn, and net income attributable to owners of the parent of JPY4.7bn.

• Mitsubishi Kakoki Kaisha (6331 JP) provides engineering (design, procurement, and construction) services for the buildings of industrial, city gas, and sewage treatment plants.
• In FY03/23, the company booked orders of JPY53.2bn, revenue of JPY44.6bn, operating profit of JPY2.5bn, OPM of 5.7%, and net income attributable to owners of the parent of JPY3.0bn.
• Mitsubishi Kakoki Kaisha, Ltd. announced a revision to its full-year FY03/24 earnings forecast.

• AS ONE Corporation (7476 JP) is a specialist trading company that uses a business model focused on catalog sales.
• In FY03/23, sales were JPY91.4bn (+5.1% YoY), operating profit was JPY11.4bn (+22.0% YoY), recurring profit was JPY11.6bn (+21.6% YoY), and net income was JPY8.1bn (+12.6%YoY).
• AS ONE Corporation announced the acquisition of treasury shares via after-hours trading (ToSTNeT-3) and retirement of the treasury shares.