In today’s briefing:
- Takeda (4502 JP)– Avoid
- Companies with Low ROEs Have Corporate Governance Practices that Only Make It So
- Cyber Security Cloud Inc (4493 JP): Q1 FY12/24 flash update
- Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Broadleaf (3673 JP): Q1 FY12/24 flash update
- Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Alconix Corp (3036 JP): Full-year FY03/24 flash update
Takeda (4502 JP)– Avoid
- Given the high number of pipeline dropouts, and the potentially disappointing $6 bn psoriasis drug acquisition, we question Takeda’s recent investment track record.
- A big restructuring, high expectations from new/recently launched drug portfolio, and punchy company guidance reduces the probability of upside surprises.
- Unless you are limited from investing outside Japan and you want exposure to an innovative pharma company, we believe that there are better and cheaper options elsewhere.
Companies with Low ROEs Have Corporate Governance Practices that Only Make It So
- Companies with the ROE over 15% have higher market capitalization, foreign ownership, and Tobin’s Q, and naturally higher ROA, while the opposite tends to be true companies with low ROE.
- Groups with ROE above 15% have generally improved their corporate governance practices, but they still need to address their use of cash in order to further improve return on capital.
- It’s clear that companies with low ROE have the form of board practices but not the substance, and that they don’t have a clear policy for increasing return on capital.
Cyber Security Cloud Inc (4493 JP): Q1 FY12/24 flash update
- Revenue was JPY954mn (+32.5% YoY), with subscription-based recurring revenue at JPY837mn (+23.6% YoY), accounting for 87.8% of total revenue.
- Operating profit was JPY315mn (+94.2% YoY), with operating expenses at JPY638mn (+14.5% YoY), and OPM at 33.1% (+10.5pp YoY).
- Companywide ARR totaled JPY3.4bn (+22.7% YoY), with user count at 1,292 companies (+6.2% YoY) and churn rate at 1.05% (+0.01pp YoY).
Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Revenue increased 10.8% YoY to JPY110.7bn, driven by an 8.0% YoY rise in comparable store sales and 35 new stores.
- Operating profit rose 61.8% YoY to JPY5.9bn, with OPM at 5.3%, GPM at 40.9%, and SG&A ratio down to 35.6%.
- KFC Holdings opened 51 new stores, remodeled 183 stores, and increased delivery service stores to 942, boosting system sales by 10.5% YoY.
Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Revenue increased 10.8% YoY to JPY110.7bn, driven by an 8.0% YoY rise in comparable store sales and 35 new stores.
- Operating profit rose 61.8% YoY to JPY5.9bn, with OPM at 5.3%, GPM up to 40.9%, and SG&A ratio down to 35.6%.
- KFC Holdings opened 51 new stores, remodeled 183 stores, and increased delivery service stores to 942 in FY03/24.
Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Revenue increased 10.8% YoY to JPY110.7bn, driven by an 8.0% YoY rise in comparable store sales and a 2.9% YoY increase in store numbers.
- Operating profit rose 61.8% YoY to JPY5.9bn, with OPM at 5.3%, GPM up 0.4pp to 40.9%, and SG&A ratio down 1.3pp to 35.6%.
- The company opened 51 new stores, remodeled 183 stores, and increased delivery service stores to 942, with system sales up 10.5% YoY.
Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Revenue increased 10.8% YoY to JPY110.7bn, driven by an 8.0% YoY rise in comparable store sales and 35 new stores.
- Operating profit rose 61.8% YoY to JPY5.9bn, with OPM at 5.3%, GPM up 0.4pp to 40.9%, and SG&A ratio down 1.3pp.
- System sales grew 10.5% YoY, with customer count down 2.5% YoY and average spend per customer up 10.8% YoY.
Broadleaf (3673 JP): Q1 FY12/24 flash update
- Revenue increased by 10.6% YoY to JPY4.0bn, with cloud services revenue up 79.3% YoY due to subscription growth.
- Operating loss was JPY109mn, pre-tax loss JPY42mn, and loss attributable to owners JPY35mn, all improved from Q1 FY12/23.
- Revised 1H FY12/24 forecast: revenue JPY8.2bn, operating loss JPY500mn, pre-tax loss JPY500mn, and loss attributable to owners JPY400mn.
Kfc Holdings Japan (9873 JP): Full-year FY03/24 flash update
- Revenue increased 10.8% YoY to JPY110.7bn, driven by an 8.0% YoY rise in comparable store sales and 35 new stores.
- Operating profit rose 61.8% YoY to JPY5.9bn, with OPM at 5.3% and GPM up to 40.9%, despite rising costs.
- KFC Holdings opened 51 new stores in FY03/24, bringing the total to 1,232, and remodeled 183 stores.
Alconix Corp (3036 JP): Full-year FY03/24 flash update
- FY03/24 revenue was JPY174.9bn (-1.9% YoY), operating profit JPY5.5bn (-34.9% YoY), and net income JPY1.6bn (-70.9% YoY).
- FY03/25 forecast: revenue JPY185.0bn (+5.8% YoY), operating profit JPY7.2bn (+31.8% YoY), net income JPY4.5bn (+181.6% YoY).
- FY03/27 targets: revenue JPY220.0bn, operating profit JPY12.0bn, recurring profit JPY12.0bn, EBITDA JPY16.4bn, ROE at least 12.0%.
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