In today’s briefing:
- Socionext (6526 JP): The Current Playbook
- TOPIX Inclusions: Who Is Ready (Jul 2023)
- JSR (4185 JP) Takeover – Why So Wide? FUD and Flows
- Recruit Holdings: Disappointing Job Data for May; More Downside Ahead
- Heroz (4382) – Tailoring Business Growth Opportunities
- Honda Motor Co.
Socionext (6526 JP): The Current Playbook
- Since the announcement of the US$1.9 billion secondary placement, Socionext (6526 JP)’s shares are down -25.0% from the undisturbed price of JPY21,950 per share (5 July).
- So far, Socionext’s shares have mostly followed the pattern of previous large placements. Investors participating in previous large Japanese placements tend to secure positive returns.
- The offering will likely be priced on 11 July. Due to the steep share price decline, Socionext is trading at an undemanding multiple compared to global SoC peers.
TOPIX Inclusions: Who Is Ready (Jul 2023)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Anycolor (5032 JP) and Lifedrink (2585 JP) have already confirmed their moves to the Prime Market and are expected to have TOPIX Inclusion Events at the end of July 2023.
- More recently, Plus Alpha Consulting (4071 JP) announced their move to the Prime Market and are likely to have a TOPIX Inclusion Event at the end of August 2023.
JSR (4185 JP) Takeover – Why So Wide? FUD and Flows
- In the last week of June, Japanese government-affiliated Japan Investment Corp (“JIC”) announced it would take over JSR Corp (4185 JP). A “surprise” but perhaps not totally.
- It traded tight, then it traded back out. Then worse. Then worse again. There were good reasons for this. There were perhaps less good reasons too.
- FUD and Flows mean that it is likely to continue to trade wide for the near future.
Recruit Holdings: Disappointing Job Data for May; More Downside Ahead
- Recruit Holdings (6098 JP) ’s share price has been down over the last few days following release of job openings data for May 2023 by the US Department of Labour.
- The no. of job openings in the US in May 2023 decreased to 9.8m vs 11.3m in May 2022. It has also declined compared to 10.1m reported in April 2023.
- Moreover, web traffic on Recruit’s job platforms Indeed and Glassdoor have also decreased in June 2023 compared to May.
Heroz (4382) – Tailoring Business Growth Opportunities
- HEROZ is an AI technology company that provides advanced AI development expertise to both B2C and B2B sectors.
- With a strategic focus on AI SaaS, it has embarked on a ‘buy-to-build’ strategy to develop profitable recurring revenue streams and accelerate earnings growth.
- In September 2022, it consolidated VarioSecure (4494), a subsidiary offering network security services, and in August 2022 acquired Strategit, a SaaS integration development support business.
Honda Motor Co.
- Honda Motor’s results were a major disappointment as the company failed to meet the revenue expectations as well as the earnings expectations of Wall Street. but, their efforts in cost reduction and improved pricing strategies helped maintain an operating profit margin above 5%.
- Additionally, they aim to provide attractive dividends to shareholders, with a significant increase per share and a share buyback program.
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