In today’s briefing:
- Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO
- Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power
- Chiba Bank – Less Yield Curve Control Issue With Near Zero JGBs
- Paramount Bed (7817 JP): All-Time Revenue and Profit in FY23; Further Upside Potential Remains
- Takuma (6031) | AVI to Turn Waste into Wealth
Yamauchi Family Office Buys More Toyo; Toyo Claims More Malfeasance, ISS Supports YFO
- Today, YFO (WK1 Limited) filed an amendment to its Large Shareholder Filing saying it had increased its stake from 27.19% to 28.51%. GK Yamauchi No10 Family Office bought 1.32%.
- Almost immediately, Toyo Construction (1890 JP) said YFO had likely conducted an illegal act according to US Securities Exchange Act of 1934, Rule 14e-5. This is likely hogwash.
- YFO is upping its stake for a zero premium tender and Toyo is fighting old battles. And the stock chugs higher.
Japan Consumer Staples Update: Inflation Looks a Blessing in Disguise for Those with Pricing Power
- Japan’s inflation hit a 41-year high at 4.3% in January, but gradually slowed down in the following months, reaching 3.3%, 3.2%, and 3.5% in February, March, and April 2023, respectively.
- Although Fuel, Electricity, and Water prices declined, other items excluding fresh vegetables, maintained inflation at a similar pace, suggesting that cost-push inflation continues to impact the overall economic environment.
- This insight examines the recent quarterly performance of Yakult, Nissin, and Seven & I, our top picks in the Japan Consumer Staples Sector Smartkarma Original.
Chiba Bank – Less Yield Curve Control Issue With Near Zero JGBs
- If there is no relief on yield curve control (YCC) anytime soon, seek banks with low JGBs
- Chiba Bank is one of few banks in Japan where JGBs are nearly a rounding error vs assets
- A pure play on an improving Japan, focused next door to Tokyo, with falling NPLs
Paramount Bed (7817 JP): All-Time Revenue and Profit in FY23; Further Upside Potential Remains
- Paramount Bed Holdings Co Lt (7817 JP) reported all-time high revenue and profit in FY23, driven by increased demand and price revision effect. The company has announced dividend of ¥59/share.
- For FY24, Paramount expects revenue growth of 6% to ¥105B, driven by expanding recurring revenue. Operating and net profits are expected to increase 4% and 6%, YoY, respectively, in FY24.
- Through business expansion and new product launches, the company is on track to achieve mid-term target of revenue of ¥120B and operating income of ¥17B in FY27.
Takuma (6031) | AVI to Turn Waste into Wealth
- Takuma presents an undervalued investment opportunity with strong financials, and a robust balance sheet. The focus on environmental solutions position it to capitalize on the demand for carbon neutrality.
- The recent involvement of AVI Japan as activist investors adds an exciting catalyst to Takuma’s investment case. We expect AVI to work with management to unlock further value.
- Takuma’s management is targeting enhanced profitability by transitioning from a more volatile EPC model to a recurring revenue-driven approach centred on O&M. Attractive valuations underpin our bullish view.
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