In today’s briefing:
- Rakuten Bank (5838) IPO – Let’s Go! (Part 2)
- Arclands (9842) Overpays for Arclands Service Holdings (3085)
- Japan and Korea Action Levels
- Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
Rakuten Bank (5838) IPO – Let’s Go! (Part 2)
- SBI Sumishin Net Bank (7163 JP) lowered its listing price vs what were already lowered expectations from a year prior. Then Rakuten Bank (5838 JP) lowered its IPO range.
- SBI Sumishin dilly-dallied around IPO price for three days then went nuts, rising 40% as of Friday morning. Rakuten Bank’s IPO looks dirt cheap now.
- But it is worthwhile comparing it on a spectrum of OTHER Japanese banks and neobanks.
Arclands (9842) Overpays for Arclands Service Holdings (3085)
- On Friday Arcland Sakamoto (9842 JP) and restaurant franchise subsidiary Arcland Service (3085 JP), which it launched in 1993 and IPOed in 2007, announced they had agreed to merge.
- Arcland SHD runs 18 restaurant brands, of which Katsuya is most well-known, with a total of 750 or so restaurants managed globally. It has grown consistently.
- The merger ratio is at an all-time high for Arcland SHD. This should be a done deal but I might expect some complaints. I think Arclands is probably overpaying.
Japan and Korea Action Levels
- Japan and Korea are meeting rally objective action points. NKY 28,500 touted as the level to short. Korea meeting the 337/338 upper wedge range target to lock in some gains.
- Japan has formed previous tops below 29,000. Korea will need to backfill and likely retest the top of the rising wedge given the impulsive nature of the rise.
- These topping patterns show conviction to form bigger cycle peaks into late April ahead of a more negative phase in May. Factor in final SPX push to 4,200-20.
Baycurrent Consulting: Strong Earnings Beat with an Overly Conservative Guidance
- Baycurrent reported fourth quarter and full-year FY02/2023 results on Friday. 4Q revenues increased 32.1% YoY to ¥21.2bn (vs consensus ¥20.7bn) and OP increased 60.8% to ¥9.6bn (vs consensus ¥8.3bn).
- Full-Year revenue and OP increased 32% and 39% YoY respectively to ¥76.1bn and ¥29.9bn, beating own guidance by 7% and 15% respectively.
- The company’s FY02/2023E guidance is too conservative as there has been no signs of an earnings slowdown as DX consulting and high-value add projects would drive next phase of growth.
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