In today’s briefing:
- Toshiba (6502) – Funding Unsecured! (This Is Getting To Be a Habit)
- Amvis Holdings (7071) – Large-Ish Offering, Large-Ish TOPIX Inclusion
- Fujitec (6406 JP): Oasis Scores a Victory in a Tight EGM Vote
- ECM Weekly (26th Feb 2023) – Japan Post Bank/Holding, Amvis, Pertamina, Zeekr, Honasa, Fangzhou, TVS
- Concrete Measures to Raise ROA Are Needed to Achieve Medium-Term Stock Price Outperformance
Toshiba (6502) – Funding Unsecured! (This Is Getting To Be a Habit)
- A Bloomberg article out Friday evening suggests the JIP Consortium funding plan submitted as the final package to Toshiba Corp (6502 JP) is no longer secure.
- Apparently Orix Corp (8591 JP), which with ROHM Co Ltd (6963 JP) was planning to invest equity and pref for total ¥300bn, wants to lower its investment to ¥200bn.
- Other equity tranche participants apparently want to reduce exposure as well.
Amvis Holdings (7071) – Large-Ish Offering, Large-Ish TOPIX Inclusion
- On Monday 20 February, nursing home, nursing and disability care services operator Amvis Holdings Inc (7071 JP) announced it would see a Secondary Offering of 10 million shares.
- It also announced that it would move to TSE Prime on 14 March.
- This increases Real World Float by quite a bit – about 40% – but it also leads to an end-April TOPIX Inclusion.
Fujitec (6406 JP): Oasis Scores a Victory in a Tight EGM Vote
- At the Fujitec Co Ltd (6406 JP) EGM, Oasis successfully secured approval for four out of six candidates for outside directors. The tight vote shows that shareholders desire change.
- Oasis fell short of its nominations constituting up to two-thirds of the Board. However, Oasis-aligned directors will represent 67% of outside directors which still can drive meaningful change.
- The EGM results will spur optimism that Fujitec can close the performance gap with peers, resulting in a rerating. Fujitec remains attractive on a cash-adjusted P/E basis.
ECM Weekly (26th Feb 2023) – Japan Post Bank/Holding, Amvis, Pertamina, Zeekr, Honasa, Fangzhou, TVS
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, Pertamina Geothermal Energy‘s listing kicked of what is shaping up to be a busy 2023 for ASEAN IPOs
- There were a few placements across the region but the biggest news was of Japan Post Bank (7182 JP)‘s planned selldown by Japan Post Holdings (6178 JP)
Concrete Measures to Raise ROA Are Needed to Achieve Medium-Term Stock Price Outperformance
- If TSE were to require companies with low P/Bs to disclose improvement measures, more companies are likely to take immediate action to increase shareholder returns.
- Reducing equity capital is effective in raising ROE, but simply draining cash accumulated from the past through shareholder returns will not lead to long-term stock price outperformance.
- Among the components of ROE, ROA improvement is required rather than immediate increase in financial leverage. Companies should disclose their more detailed plans to increase ROA over the medium term.
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