In today’s briefing:
- SMFG Cross-Shareholding – At Least US$17bn of Cross-Shareholding to Sell, Planning to Speed It Up
- Sakura Internet Placement – Beneficiary of the AI-Wave Looking to Double Down
- Maxell (6810) Launches New MTMP, A “TSE ‘ATIMAoCoC&SP'” Notice, And A Buyback
- Lasertec (6920): Some of the Accusations Are Disgraceful, Some Not
- Companies with High Corporate Governance Practices Have High ROE, but Not Vice Versa
- Aoyama Zaisan Networks Company (8929 JP) – Wealth Consulting Emerging as the Key Profit Driver
SMFG Cross-Shareholding – At Least US$17bn of Cross-Shareholding to Sell, Planning to Speed It Up
- Following up on our earlier cross-shareholding notes, in this note we look at Sumitomo Mitsui Financial Group (8316 JP) cross-shareholding.
- SMFG had a stake over US$100m in at least 47 listed Japanese stocks, amounting to a total of around US$17bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Sakura Internet Placement – Beneficiary of the AI-Wave Looking to Double Down
- Sakura internet (3778 JP) is looking to raise US$127m from its primary follow-on. Proceeds will be used towards purchasing GPU servers, and constructing new data center facilities.
- While 11% of total shares outstanding are offered here, the deal would be easily digested by the market, representing just 0.8 days of its three month ADV.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Maxell (6810) Launches New MTMP, A “TSE ‘ATIMAoCoC&SP'” Notice, And A Buyback
- Today, Maxell Ltd (6810 JP) announced its new MTMP “MEX26 – Commit to Value (CorporateValue,ProfitGrowth)” with lots of consultant-speak and corporate homily.
- But they present a capital investment plan, and a capital return plan. These may interest investors. The buyback is the same size as 2019 and 2022. They popped and faded.
- Todays tidbits were all announced during the lunch break today, and the stock popped 6% in the PM session on the news.
Lasertec (6920): Some of the Accusations Are Disgraceful, Some Not
- Lasertec shares dropped nearly 8% following a scathing 53-page report by Scorpion Capital, accusing management of “colossal fraud.”
- The SC report is shrill, in our view, and therefore, we think we add value by contributing a second opinion.
- In our view, Lasertec is due for a correction even if SC’s report is inundated by hyperbole.
Companies with High Corporate Governance Practices Have High ROE, but Not Vice Versa
- Companies in the 0% to 8% ROE group have low stock valuations and are in trouble because they are unable to step into value-creating management.
- Companies in this group, which includes many prime market listed companies, have done what is required by Corporate Governance Code, but could not take action to increase their ROE.
- The lack of significant differences in corporate governance practices for group with ROEs above 10% is due to foreign ownership not being significantly differentiated from other groups.
Aoyama Zaisan Networks Company (8929 JP) – Wealth Consulting Emerging as the Key Profit Driver
- Registering record sales and earnings – Q1 FY12/24 results recorded the highest quarterly operating profit to date, demonstrating a brisk start to the FY.
- The core earnings driver was Wealth Consulting, chiefly in Business Succession which closed a large M&A transaction.
- The Real Estate Solutions business also saw strong sales growth (+24.2% YoY), driven by rental income and other real estate transactions, while the core ADVANTAGE CLUB (real estate fractional ownership product) saw flat sales YoY.
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