In today’s briefing:
- Merger Arb Mondays (29 Jan) – Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp
- Fanuc (6954) | Robot Orders Remain Weak
- NAFCO (2790) – Big ToSTNeT-3 Raises Obvious Questions
- Paris Miki (7455 JP) – Corrected Vision – Is This A Setup For an MBO?
Merger Arb Mondays (29 Jan) – Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads – Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP).
- Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), Benefit One Inc (2412 JP), Benesse Holdings (9783 JP), T&K Toka.
Fanuc (6954) | Robot Orders Remain Weak
- Q3 net sales: ¥197.8 billion, down 10.1% YoY; operating income: ¥40.9 billion, down 22.1%; operating margin: 20.7% (-320bps YoY)
- Full-Year guidance revised: Net sales up 1.8% to ¥771.5 billion; operating profit up 8.4% to ¥132.2 billion.
- Positive stock reaction post-Q2 report; FY3/25 outlook cautious, especially for the Robot Division given a -30.2% YoY decline in Q4 orders.
NAFCO (2790) – Big ToSTNeT-3 Raises Obvious Questions
- On Friday 26 January, NAFCO Co Ltd (2790 JP) announced Q3 earnings and a large Buyback Program to run from 29 January through 31 March.
- While the company is having A Very Bad Year, this buyback raises obvious questions. The size is interesting given the float and the shareholder structure.
- Those interested in SmallCap Events might take a look. There are very short-term and slightly longer-term implications.
Paris Miki (7455 JP) – Corrected Vision – Is This A Setup For an MBO?
- The situation at Paris Miki has been relatively non-salutary the last many years til 2022. The stock has underperformed peers in sales growth and has dropped sales points.
- The company has a decent relationship with one of its main suppliers, global eyewear giant Luxottica Group (LUX IM), which just added to their stake recently, aggressively.
- The company is getting slow-kicked out of TOPIX, but revival appears in the works. It kind of looks like a setup for an MBO.
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