In today’s briefing:
- Rohm (6963): Costs Up, FX Gains Up More, Small Buyback, Cheap (And N225 Inclusion In the Distance)
- Panasonic (6752) | Following the Yellow Brick Road to Battery Profits
- M3: Covid Related Trials and Yen Depreciation Support Earnings Beat
- Reason Behind the Difference in Management Between Family Companies and Others Is the Shareholding
Rohm (6963): Costs Up, FX Gains Up More, Small Buyback, Cheap (And N225 Inclusion In the Distance)
- ROHM Co Ltd (6963 JP) announced salutary H1 results on Nov 1. The numbers were good, the innards suggested cost pressures. The revised forecasts suggested conservativeness, or risk of weakness.
- The company also announced a stock buyback. It’s only about 2% of shares out, which is 5-10% of Real World Float, but the stock has a low-beta risk character.
- And it is quite cheap on a capital construct basis. EV/EBITDA to Mar23 on conservative guidance is 4.6x. Adj EV/EBITDA Mar23e deducing securities and net receivables? 3.7x.
Panasonic (6752) | Following the Yellow Brick Road to Battery Profits
- The US Inflation Reduction Act will have a massively positive impact on Panasonic’s battery earnings for a decade
- Panasonic has just broken ground on a new battery plant in Kansas – the yellow brick road to further profitability
- We see a further 25% upside to the share price from the IRA impact on current battery capacity and even more on Kansas
M3: Covid Related Trials and Yen Depreciation Support Earnings Beat
- M3 Inc (2413 JP) reported 2QFY03/2023 results yesterday. Revenue grew 10.6% YoY to JPY56.7bn (vs consensus JPY54.7bn) while OP increased 31.5% YoY to JPY17.9bn (vs consensus JPY17.0bn).
- The company’s earnings were mainly driven by Covid-19 related trials and a weaker Yen which mainly helped the overseas business post strong results.
- M3’s growth prospects remain stagnant and the company’s valuation multiple is still expensive as earnings expectation has started to decline.
Reason Behind the Difference in Management Between Family Companies and Others Is the Shareholding
- Correlation analysis of the major shareholder factor with ROE, ROA, and Tobin’s Q shows that founding family companies tend to have relatively high profitability (ROA) and high stock price valuations.
- On board practices, companies with more than 50% ownership are generally less concerned about improving their practices, because they don’t have to worry as much about voices of minority shareholders.
- With regard to key actions, companies with shareholders holding more than 50% interest are presumed to be proactive in growth investments.
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