In today’s briefing:
- Seven & I (3382) | U.S. Gas Margins Offset Rising Energy Costs at Home
- Renesas (6723 JP): Steradian Acquisition Supports Alliance with Tata
- Buying Japanese Drug Store Names: Welcia (3141-JP) And Sundrug (9989-JP)
- Companies Should Communicate Their Human Resources Strategy Rather than Detailed Disclosure Rules
Seven & I (3382) | U.S. Gas Margins Offset Rising Energy Costs at Home
- 1H results, OP up +26% YoY, were good but in line with the recent Nikkei preview.
- The U.S. convenience store operation was the standout performer and the reason for the full year guidance raise
- We remain bullish on the stock. It is just too cheap relative to global peers
Renesas (6723 JP): Steradian Acquisition Supports Alliance with Tata
- Acquisition of Steradian Semiconductors complements Renesas’ partnership with Tata Group and expands its presence in India.
- Follows purchase of Reality Analytics of the U.S. and Celeno Communications of Israel. Global footprint growing, technological sophistication rising to meet ADAS, AI and IIoT requirements.
- P/E below 10x on current guidance, but vulnerable to semiconductor down-cycle. Accumulate for long-term potential.
Buying Japanese Drug Store Names: Welcia (3141-JP) And Sundrug (9989-JP)
- Japan has been a favorite country since late-March, and we have continued to see improvement ever since.
- Vermilion’s international Group CS-35 Drug Stores, Japan displays bullish price and RS downtrend reversals, giving us added confidence that outperformance is likely to continue
- The two stocks highlighted today display base breakouts over the last couple of days, making them timely buys. Buy: Welcia Holdings (3141-JP) and Sundrug (9989-JP)
Companies Should Communicate Their Human Resources Strategy Rather than Detailed Disclosure Rules
- Companies had expected detailed rules, as with various disclosure documents, but was puzzled by government’s guidelines, which were conceptual and didn’t provide guidance on what to disclose and how much.
- It is likely that the disclosure in annual securities reports, which are legal documents, will fill the space by disclosing items that are specifically identified and easy to show quantitatively.
- Companies that cannot clearly explain their policies on investment in human capital and human resource strategies in their management strategies are unlikely to attract human resources.
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