In today’s briefing:
- Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?
- Rigaku Holdings (268A JP) IPO: Trading Debut
- Nidec (6594)| Q2 In-Line; Long-Term Outlook Intact
- Goldwin: 50% Growth in 5 Years? Possible but Some Challenges
- If Equity Compensation Are Introduced for Employees as Is, the Gender Gap in Compensation Widens
- Japan Pure Chemical (4973 JP): 1H FY03/25 flash update
Tokyo Metro (9023 JP): One Miss; A Bigger Index Inclusion Coming?
- Tokyo Metro (9023 JP) had a blockbuster listing yesterday, finishing the day 45% higher. That took the estimated div yield down from 3.33% (at the IPO price) to 2.3%.
- One expected index inclusion will not take place due to insufficient information on IPO allocations and that leads to a much lower free float than expected.
- That inclusion will now be deferred to June; BUT there could be two other (bigger) index inclusions on the cards prior to that.
Rigaku Holdings (268A JP) IPO: Trading Debut
- Rigaku Holdings (268A JP) priced its IPO at JPY1,260 per share to raise gross proceeds of US$856 million. The shares will start trading on 25 October.
- We previously discussed the IPO in Rigaku Holdings (268A JP) IPO: The Bull Case, Rigaku Holdings (268A JP) IPO: The Bear Case, Rigaku Holdings (268A JP) IPO: Valuation Insights.
- The peers have modestly derated since the prospectus was released on 20 September. The IPO price remains attractive.
Nidec (6594)| Q2 In-Line; Long-Term Outlook Intact
- Nidec’s Q2 operating income beat my estimates, driven by strong small motors and appliance segments, though automotive profits underperformed
- The automotive division is shifting focus from e-axles to broader auto parts, while improving operational efficiency through partnerships and streamlined logistics
- Despite macro risks, Nidec remains well-positioned for long-term growth in digitalization, decarbonization, and automation, with a price target of ¥4,350
Goldwin: 50% Growth in 5 Years? Possible but Some Challenges
- Goldwin has big plans for both The North Face in the Japanese and Korean markets and for its own brand globally.
- But there are worries about saturation for the former in Japan, slowing brand development, and lack of expertise in overseas markets to build its own brand.
- Goldwin has had an amazing run but can it build a global brand? If it can, it will feed into high levels of demand for Japan-tech sports brands.
If Equity Compensation Are Introduced for Employees as Is, the Gender Gap in Compensation Widens
- Unlike the transfer of personnel rights, which is resisted by management, equity compensation that can be used to retain talent is attractive to management and is likely to accelerate.
- If equity compensation plans are introduced for employees with a low ratio of female managers, the gap in compensation between men and women is expected to widen.
- The introduction of equity compensation for employees is anticipated to provide an opportunity for management “kaizen” tips to emerge from individual workplaces.
Japan Pure Chemical (4973 JP): 1H FY03/25 flash update
- Revenue reached JPY3.1bn, an 8.3% YoY increase, achieving 48.7% of the full-year forecast, with strong AI demand.
- Operating profit increased by 173.2% YoY to JPY149mn, driven by robust sales in plating chemicals for AI applications.
- Net income forecast revised to JPY1.6bn due to gains from the sale of investment securities announced in August 2024.
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