In today’s briefing:
- 7&I (3382) Update – Couche-Tard Responds
- JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
- Baudroie (4413 JP) – Fast Growth, Prime Promotion, and TOPIX Inclusion
- TOPIX Inclusions: Who Is Ready (Mar 2025)
- Japan Steel Works (5631) | Artillery Giant Reloads for Growth
- GiG Works (2375 JP): Q1 FY10/25 flash update
- Nippon Shinyaku (4516 JP): Strong 9MFY25 Numbers; FY25 Guidance Raised; Regular Launches Remain Key
- Shimojima (7482 JP) – OPM Rebounded from Q2 3.4% → Q3 8.6% on Price Hikes
7&I (3382) Update – Couche-Tard Responds
- On 10 March, Alimentation Couche-Tard (ATD CN) issued a release “UPDATE ON PROPOSAL FOR A COMBINATION WITH SEVEN & i“.
- They felt obliged to be transparent in the wake of the 7&i Letter To Shareholders released yesterday. The content/nuance of the two letters differ significantly.
- Two parties competing to get a truth which cannot be both could be problematic. We are still many months away from any kind of ACT/7-11 deal.
JX Advanced Metals (5016 JP) IPO: Big Retail Allocation Means No Fast Entry
- JX Advanced Metals (5016 JP) has priced its IPO at ¥820/share, at the top end of the IPO range but lower than the initial indication of ¥862/share.
- With the bulk of the domestic offering going to retail investors, there is no chance of Fast Entry for the stock in global indices.
- TOPIX INDEX inclusion will take place at the close on 28 April, while inclusion in major global indices is likely to take place in August and September.
Baudroie (4413 JP) – Fast Growth, Prime Promotion, and TOPIX Inclusion
- In late November of 2024, Baudroie (4413 JP) announced it would try to move to TSE Prime and that day they announced a 2.76mm share secondary offering and a buyback.
- The buyback was a bit less than a quarter of the offering. Fast forward 3mos and in early March the company announced it would move to Prime. Yesterday it did.
- That puts the company in line for a TOPIX inclusion in end-April , and likely other index effects later. In the meantime, earnings and guidance are out ~10 April.
TOPIX Inclusions: Who Is Ready (Mar 2025)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Recently, IT-solutions company Baudroie (4413 JP) announced a move to the Prime Market. This would result in a TOPIX Inclusion event for the stock at the end of April 2025.
- Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.
Japan Steel Works (5631) | Artillery Giant Reloads for Growth
- Defense Windfall: JSW dominates Japan’s artillery market, set to benefit as defense spending triples, driving a 232% surge in defense sales to 80 billion yen by 2028.
- Strategic Expansion: Exclusive forging capabilities secure JSW’s artillery monopoly, while investments in railguns and next-gen armoured vehicles fuel long-term growth.
- Energy Tailwinds: JSW’s nuclear and offshore wind expertise ensures stable revenue, with reactor restarts and turbine foundations boosting its power segment’s profitability.
GiG Works (2375 JP): Q1 FY10/25 flash update
- GiG Works reported a revenue of JPY5.9bn, an 8.6% YoY decline, with all profit categories turning to losses.
- The On-demand Economy business, accounting for 42% of Q1 revenue, saw a YoY decline in revenue and profit.
- The Sharing Economy business achieved YoY revenue and profit growth, with a 10.8% revenue increase to JPY1.2bn.
Nippon Shinyaku (4516 JP): Strong 9MFY25 Numbers; FY25 Guidance Raised; Regular Launches Remain Key
- During 9MFY25, Nippon Shinyaku (4516 JP) reported revenue growth of 8% YoY to ¥121B, while operating profit stood at ¥33B, up 8% YoY.
- Viltepso witnessed growth both in Japan and the U.S. and licensing income also increased on higher overseas sales of Uptravi.
- Guidance for FY25 have been raised with sales now expected to be ¥160B, up 8% YoY.
Shimojima (7482 JP) – OPM Rebounded from Q2 3.4% → Q3 8.6% on Price Hikes
- While 1H profits struggled under pressure on COS from the weak yen, price hikes for roughly 80% of products were implemented from September, a portion from October, so Q4 will see a full 3-month contribution.
- Note also success in controlling SG&A from Q3. Sapporo-based Ohkura Sangyo will be consolidated from Q1 FY26/3 with the acquisition completed in Jan-2025.
- In this report, we look at three TOPICS. The first is an update on CY2024 booming inbound demand, which is continuing coming into 2025.
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