In today’s briefing:
- Seven & I: Unimpressive Results & Potential Investor Exodus Amidst Superstore Transformation
- Suruga Bank – Loans Down A Lot, Deposits Up Sharply, Cost/Income Up to 74%, Credit Costs +47% QoQ
- Quick Look – Lifull (2120 JP)
- Whether or Not to Promote Diversity in the Company Depends on Management Leadership
Seven & I: Unimpressive Results & Potential Investor Exodus Amidst Superstore Transformation
- Seven & I Holdings (3382 JP)‘s FQ2 OP exceeded consensus by ¥2.0bn (1.3%), but with FH2 revenue guidance lowered by ¥95bn, the overall outlook appears discouraging.
- The company’s shares fell by 5%, underperforming Topix by 3.8%, indicating investor concern about US growth and departing from activist proposals despite a ¥2.0bn earnings outperformance.
- If overseas investors who supported ValueAct’s proposals begin to exit, Seven & I could face substantial downside risks in the near term.
Suruga Bank – Loans Down A Lot, Deposits Up Sharply, Cost/Income Up to 74%, Credit Costs +47% QoQ
- The bank is seeing high growth in cash and deposits, with loans in decline, and the composition moving more toward government and corporate loans
- ALM does not appear strong, and without any easy way to reduce operating costs, the bank is now seeing cost/income surge to 74%
- Credit metrics on surface may appear fine, but the 47% QoQ rise in provision costs, suggests to us provisions were cut too much last year, and now there is normalization
Quick Look – Lifull (2120 JP)
- Company Profile: LIFULL runs the LIFULL Home’s real estate website.
- Compared to its main rival, whose strategy is focused mainly on the quantity of listings, LIFULL’s aim is to achieve greater quality, as measured by the percentage of inquiries that lead to sales for professional real estate clients.
- While others primarily charge a fixed fee for listings, LIFULL charges a combination of fixed fees and incentive fees based on the number of inquiries received for a listing.
Whether or Not to Promote Diversity in the Company Depends on Management Leadership
- Given that embedding diversity within company is essential for the company’s growth and resilience, it’ll be up to management leadership to decide whether this should be promoted as management strategy.
- Companies with more women in the workforce tend to have higher stock prices. It can be assumed that the company is hiring talented, skilled, and necessary personnel regardless of gender.
- Analysis shows that companies with a higher percentage of female board members contribute more to value creation. Companies that promote board diversity are also keen on diversity throughout the company.
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