In today’s briefing:
- 7&I Results and Plans – The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging
- 7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores
- Rigaku Holdings (268A JP): Low, Slow and Steady in Global Indices
- Gaming. Square Enix (9684 JP). 3 NOTABLE POSITIVES SO FAR IN OCTOBER. BIG MONTH AHEAD
- Creek & River (4763 JP): 1H FY02/25 flash update
7&I Results and Plans – The Good, The Bad, The Ugly, The Respectable, Unfortunate, and Encouraging
- H1 sales were GOOD. H1 earnings were BAD. New forecasts are UGLY. The CVS initiatives are RESPECTABLE, but US CVS market environment UNFORTUNATE. The creation of the new Holdco ENCOURAGING.
- The Couche-Tard Bid? That’s SEPARATE. Confidential. But three weeks after receiving the new proposal, it hasn’t been publicly rejected. So that’s a thing.
- 7&i is progressing with its Standalone Plan, as it should, because ACT’s bid is more a show of faith for discussions. The York Holdings structure is INTERESTING.
7-Eleven Corporation: A Clear Strategy for Long-Term Value, Founding Family Return to Super-Stores
- Seven & I released 1H24 earnings today as well as details on planned restructuring of its business. Results included some one-off items hitting operating profit as well as lower footfall.
- The bigger news was the plan to hive off the non-CVS retail operations into a new company, York Holdings, leaving a newly named 7-Eleven Corporation running CVS globally.
- Unusually, Seven also mentioned the possibility of new strategic partners investing in York, including even the “original founding families”, suggesting one way of holding on to control.
Rigaku Holdings (268A JP): Low, Slow and Steady in Global Indices
- Rigaku Holdings (268A JP) is scheduled to be listed at the Tokyo Stock Exchange on 25 October 2024 at a valuation of ~$1.9bn.
- The company’s modest market capitalization fails fast-entry but easily surpasses the quarterly small cap thresholds of both main global indices.
- Rigaku Holdings (268A JP) is expected to be added at the May and June 2025 quarterly reviews with the potential greenshoe exercise increasing the passive fund demand upon inclusion.
Gaming. Square Enix (9684 JP). 3 NOTABLE POSITIVES SO FAR IN OCTOBER. BIG MONTH AHEAD
- Gaming Award nominations could spark sales lift into key holiday selling season
- Highly watched Industry Scores are moving higher for FF7 Rebirth. FF7 Rebirth moving higher up key US gaming charts
- Five CQ4 release titles could drive revenues higher from recent lower reset. Big valuation discount and balance sheet opportunities exist
Creek & River (4763 JP): 1H FY02/25 flash update
- Sales increased by JPY580mn (+2.3% YoY), driven by growth in Creative (Japan) and Other sectors, despite project reductions.
- Operating profit decreased by JPY407mn (-15.6% YoY), impacted by development costs and reduced profits in most segments except Creative (South Korea).
- Medical Principle’s sales and operating profit decreased YoY due to reduced COVID-19 projects and structural reforms.
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