In today’s briefing:
- Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?
- NaiGai Trans (9384 JP) – Small LCL Shipping Founder Gets an Exit
- Bottom Fishing: SoftBank (9984 JP) Looks Attractive After -18% Drop
- Stock Splits Meet Many Companies’ Needs to Increase the Shareholdings of Individual Investors
- Initiation – Moresco (5018 JP)
- Kissei Pharmaceutical (4547 JP): FY25 Looks Stable; Recent Licensing Deals Key To Near Term Growth
- CellSource (4880 JP): Q1 FY10/25 flash update
- Frontier Management Inc. (7038 JP) – Reported Losses in FY2024/12…
- CRE Inc/Japan (3458 JP): 1H FY07/25 flash update
Proto Corp (4298 JP) – Activists Getting More Activish, Watch for Position Changes?
- The MBO for Proto Corp (4298 JP) where the founder/chair is buying out from minorities is being done at the wrong price. His reasons are good, but not for minorities.
- One large foreign shareholder – the second largest shareholder of the firm – has offered substantial pushback in the form of a letter asking for discussions. That went nowhere.
- So now they have come out harder. The solution here is a really big bump or a broken deal if investors keep the share price above the TOB price.
NaiGai Trans (9384 JP) – Small LCL Shipping Founder Gets an Exit
- Naigai Trans Line (9384 JP) is a small logistics provider. They specialise in LCL (“Less-Than-Container-Load” shipments around Asia.
- On 7 March 2025, the company agreed to a buyout via Tender Offer by IAPF2 – a buyout vehicle of IA Partners – a 3yr old PE firm in Japan.
- This is 5.9x EBITDA. There’s minimal transparency. No guidance. The PE firm is putting down an equity check of 2x EBITDA and 4x earnings. But it’ll probably get done.
Bottom Fishing: SoftBank (9984 JP) Looks Attractive After -18% Drop
- Softbank Group (9984 JP) has lost nearly 18% of its stock value since February 7th. The stock has been falling for 4 weeks, our model indicates a very oversold condition.
- SoftBank’s has a number of strategic investments and initiatives that make it an attractive investment.
- Below, we outline key fundamental factors that align with our quantitative model’s view, suggesting the stock is oversold and could be a compelling buy at its current price.
Stock Splits Meet Many Companies’ Needs to Increase the Shareholdings of Individual Investors
- The increase in stock splits can be attributed to TSE requesting more effective measures from companies after market restructuring and to more companies whose stock prices have risen.
- Companies are obsessed with getting individual investors on their side. It seems that the interests of companies and TSE are aligned in conducting stock splits to increase individual investors’ shareholdings.
- Now that many companies want to increase the number of individual investors, it may be a good time to resolve the cost issue and consider changing the share unit system.
Initiation – Moresco (5018 JP)
- MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) is a R&D-oriented company that has developed products boasting market-leading shares in Japan, such as fire-resistant hydraulic fluid for the steel and automotive industries and liquid paraffin used as ingredients in cosmetics, with the aim of achieving domestic production of special lubricants.
- In recent years, the Company has successfully brought to market water soluble die casting lubricants and environmentally friendly hot melt adhesives.
- In addition, it has also gained a leading global share in synthetic lubricants such as high temperature greases and hard disk surface lubricants.
Kissei Pharmaceutical (4547 JP): FY25 Looks Stable; Recent Licensing Deals Key To Near Term Growth
- Kissei Pharmaceutical (4547 JP) reported 14% YoY jump in revenue during 9MFY25 driven by Beova and Tavneos amidst price revision pressures and generic competition.
- The company has reiterated FY25 guidance of revenue rising 14% YoY, with major drugs witnessing growth.
- Main trigger point happens to be the in-licensing deal and the sub-licensing agreements the company has signed with various players giving an opportunity to expand its market in near future.
CellSource (4880 JP): Q1 FY10/25 flash update
- Revenue decreased by 27.6% YoY to JPY849mn, with operating and recurring losses of JPY62mn and JPY61mn, respectively.
- Contract processing services revenue fell 16.4% YoY, with orders declining 12.4% YoY to 4,981 in Q1 FY10/25.
- Medical device sales revenue dropped 26.7% YoY, while cosmetics sales revenue decreased 65.2% YoY in Q1 FY10/25.
Frontier Management Inc. (7038 JP) – Reported Losses in FY2024/12…
- Frontier Management announced its full-year FY2024/12 results after market close on February 13, 2025.
- Net sales came in at JPY 9,265 mn, surpassing the forecast target of JPY 9,000 mn, mainly thanks to an increase in revenue from deals in the M&A Advisory Business.
- In addition to this increase in sales, cost-cutting measures in consulting-based businesses proved successful, which helped reduce operating losses from the forecasted JPY 950 mn to JPY 632 mn.
CRE Inc/Japan (3458 JP): 1H FY07/25 flash update
- In 1H FY07/25, the company reported sales of JPY22.6bn (-3.9% YoY) and business profit of JPY3.1bn (+124.0% YoY).
- The company resolved to support a Tender Offer by SMFL MIRAI Partners and plans to delist its stock.
- As of end-January 2025, floor space under management reached approximately 6.6mn sqm with high occupancy rates.
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