Daily Brief Japan: Softbank Group, Restar Holdings Corporation, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

SoftBank Group (9984 JP) – Reasons to Be Careful
Restar Holdings (3156) – Seeking Higher Returns Through Business Reorganization
Employee Stock Compensation Plans Need to Be Designed to Increase Employee Engagement

SoftBank Group (9984 JP) – Reasons to Be Careful

The SoftBank share price rally is, in our view, based on optimism around the Arm IPO, the Yen’s relative weakness and recovering share prices of public companies in the portfolio
Nvidia’s emergence as a potential anchor investor in the Arm IPO has boosted SoftBank shares, yet there is still a big disparity between groups in terms of Arm’s potential valuation
Aside from a recovery in public tech companies’ shares, Yen weakness has supported SoftBank’s asset values; monetary policy moves now indicate the prospect of a stronger Yen versus the USD

Restar is a semiconductor and electronic components trading company with a historical affiliation to Sony (6758) as an authorized dealer, catering to a diverse and global customer base.
In May 2023, it announced an ambitious and expansive strategic initiative for business reorganization.
These initiatives include organizational changes from a holding company to an operating company, structural reforms, making ROIC (Return on Invested Capital) a critical management key performance indicator (KPI), and creating growth opportunities targeting the automotive and industrial sectors.

Employee motivation is reflected in the fact that employee salaries have barely increased in 10 years (employee engagement in Japan has been 5% for four consecutive years).
First, employee salaries must be increased. Even during deflation, the consumption tax has been raised twice in the past decade, and the national burden rate has also increased.
When introducing employee stock compensation plan, it will be necessary to make sure that the plan is not only designed to supplement employee pay, but also to increase employee engagement.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network