Daily Brief Japan: Softbank Group, Tokyo Stock Exchange Tokyo Price Index Topix, Hamamatsu Photonics Kk and more

In today’s briefing:

Softbank – So The Arm IPO Isn’t Looking All That Hot Then?
Shareholder Returns Offered by Companies that Do Not Meet Prime Market Listing Criteria Are…..
Hamamatsu Photonics (6965 JP): Difficult Year Ahead

Softbank – So The Arm IPO Isn’t Looking All That Hot Then?

Apparently prospects for a high valuation on a potential Arm IPO are so staggeringly, AI-rifically good that Masayoshi Son is now sounding out Samsung on a strategic partnership.
Samsung itself has not been having the greatest time of late with Micron and SK Hynix making serious inroads against its prior technological leadership in memory.
So as desperate and desperate-er ponder an alliance we can only be thoroughly convinced that this move absolutely, positively has nooooothing to do with trying to prop up share prices.

The current criteria of 10 billion-yen in tradable market capitalization is too small by definition of prime market, “market-cap suitable for institutional investors,” and should be reviewed in near future.
It’s natural that there will be difference in the stock prices of companies that can show results that are in line with their disclosed plans and those that are not.
Simply raising shareholder returns won’t, in theory, positively impact on stock price. Mere increased shareholder returns would be seen as sign that the company reached the end of its rope.

FY Sep-22 results are likely to beat management’s guidance, but this should be in the price. Recession and rising interest rates are probably not in the price.
Growth rates slowed in 3Q and are likely to decline further in 4Q. In the year ahead, we expect both sales and profits to decline.
The shares have rebounded by 21% since the 1st of July to 30x our EPS estimate for FY Sep-23. This does not look sustainable. Sell into current strength.

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

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