In today’s briefing:
- Weekly Deals Digest (16 Jun) – Sun Corp, Fancl, Tatsuta, Great Eastern, A8, Webtoon, Shift Up
- Last Week in Event SPACE: Keisei Electric, CMCDI, Sigma Healthcare, Sun Corp, Segantii
- Medipal Holdings (7459 JP): Mixed FY24 Result; Growth to Continue in FY25; Buyback Plan Announced
- Reducing Policy Shareholdings May Be a Sign of Seriousness to Improve Management
Weekly Deals Digest (16 Jun) – Sun Corp, Fancl, Tatsuta, Great Eastern, A8, Webtoon, Shift Up
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: MMG (1208 HK) US$1.2 billion rights issue. Shift Up (462870 KS) and Webtoon Entertainment (WBTN US) IPOs.
- Event-Driven developments: Sun Corp (6736 JP), Fancl Corp (4921 JP), Tatsuta Electric Wire & Cable (5809 JP), Great Eastern Holdings (GE SP), A8 New Media (800 HK), Bapcor.
Last Week in Event SPACE: Keisei Electric, CMCDI, Sigma Healthcare, Sun Corp, Segantii
- The Palliser/Keisei Electric Railway Co (9009 JP) is an unconvincing trade. Avoid being long Keisei vs Oriental Land (4661 JP) except in short-term impact events. Avoid the drift trade also.
- On the subject of activism, keep an eye on China Merchants China Direct Investments (133 HK)‘s 20th June AGM. If Kan’s re-election is rejected, this stock should gain more momentum.
- A Sigma Healthcare (SIG AU)/Chemist Warehouse merger carried regulatory risk. And now the ACCC has raised a raft of concerns.
Medipal Holdings (7459 JP): Mixed FY24 Result; Growth to Continue in FY25; Buyback Plan Announced
- Medipal Holdings (7459 JP) reported FY24 result, with revenue and net profit beating and operating profit missing guidance. FY24 revenue increased 6% YoY, driven by growth across all business segments.
- The company is anticipating an upturn in revenue and operating profit in FY25. However, FY25 net profit is expected to fall due to the absence of extraordinary income.
- The company has announced a share buy-back plan to purchase up to 2.5M shares for ¥5B from May 15, 2024 to August 30, 2024.
Reducing Policy Shareholdings May Be a Sign of Seriousness to Improve Management
- Although few shareholder proposals will be passed, companies that receive shareholder proposals and don’t like the attention are likely to seek compromise and come to terms with shareholders before AGM.
- Companies with low valuations have significantly lower ROE, ROA, market capitalization, and foreign ownership. In order to raise valuations, the first step should be to increase return on capital.
- Companies with higher valuations can be expected to have begun to steer their board operations in an improved direction. Policy shareholding reductions can be considered as seriousness toward management improvement.
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