In today’s briefing:
- Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- Zozo-Owned Yutori IPO This Month
- Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- Heroz (4382 JP) – Growing Evidence of Positive Transformation
- Astellas Pharma (4503 JP): Some Recent Positive Developments That Will Yield Benefit in Long-Run
- Ebay’s Qoo10 More than Doubles Users to 23 Million in 5 Years
Shinko Electric (6967) Takeover: Initial Break/Gap Risk Analysis
- The JIC Deal for Shinko Electric Industries (6967 JP) has been announced and is, as expected, trading wide.
- There is FUD. There are Flows. Just like JSR (4185). Some of that FUD can be explained by “gap risk” on deal break…. or can it? We look at risks.
- There’s more positioning risk than fundamental risk at this point. And the FUD and Flows have specific timing in this case which makes thing different than JSR. Worth thinking about.
Zozo-Owned Yutori IPO This Month
- Zozo may lead in online fashion malls but its customer base, while young, is getting older.
- In 2020, it acquired a majority stake in Yutori, a fledgling fashion mall targeting the young, which will now list this month.
- Yutori has grown sales to ¥2.47 billion since launching five years ago. As well as Japan, it sees a major opportunity across Asia given Japanese street fashion popularity there.
Toyo Construction (1890 JP): Déjà Vu as YFO’s Proposal Rejected
- The Toyo Construction (1890 JP) Board has opposed YFO’s potential tender offer price of JPY1,255 per share but has kept the door open for an improved offer.
- YFO is running out of options as a YFO candidate-heavy special committee opposed its proposal, and the share price is trading through terms.
- YFO has three options: a hostile offer at an unchanged price, an improved price, or exit its position. Each option has issues suggesting a lack of short-term share price support.
Heroz (4382 JP) – Growing Evidence of Positive Transformation
- Strong execution on multiple fronts – Q1-2 FY4/2024 results were ahead of expectations, with sales growth of 205.2% YoY and operating profit growth of 572.1% YoY.
- Whilst acquisitive growth was to be expected, HEROZ has also demonstrated 1) organic growth in its AI/DX Service with underlying sales growth of 14.6% YoY,
- 2) increased the proportion of recurring revenue to 62.4% of total sales and thereby continuing to improve earnings visibility
Astellas Pharma (4503 JP): Some Recent Positive Developments That Will Yield Benefit in Long-Run
- Astellas Pharma (4503 JP) has been reporting a couple of positive developments over the last one month. These are right steps toward achieving sustainable and accelerated growth in long-term.
- Astellas received European Commission approval for Veoza for the treatment of moderate to severe vasomotor symptoms associated with menopause. This potential blockbuster drug has already been launched in the U.S.
- Astellas is acquiring Propella Therapeutics for $175 million. Propella’s clinical-stage lead candidate can be a challenger to the current standard-of-care in prostate cancer treatment.
Ebay’s Qoo10 More than Doubles Users to 23 Million in 5 Years
- Qoo10 has been quietly growing its share of the Japanese e-commerce market.
- Despite relentless competition from the big 3, Qoo10 has managed to increase members from 10 million in 2018 to 23 million through event marketing and close attention to customer demands.
- While cosmetics and fashion are the current focus, Qoo10 is also strengthening other categories like food, stationery and electronics.
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