In today’s briefing:
- Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?
- Tokyo Electron (8035 JP): Q1 FY03/25 flash update
- Struggles in China Hurt Uniqlo’s Bottom Line
- A New Type Of “Deemed Shareholding” Has Emerged!
- Euglena Co Ltd (2931 JP): 1H FY12/24 flash update
- Hosokawa Micron (6277 JP): Q3 FY09/24 Flash Update
- Visco Technologies Corp (6698 JP): Q1 FY03/25 flash update
- Elecom Co Ltd (6750 JP): Q1 FY03/25 flash update
- Cyberlinks (3683 JP): 1H FY12/24 flash update
- G Tekt Corp (5970 JP): Q1 FY03/25 flash update
Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?
- A Reuters article overnight says Trend Micro might be up for sale. This caused the ADRs to jump 10% overnight. The remaining co-founders are 65 and 70 this year.
- The stock has effectively gone sideways the last few years as Value Act has been activisting. Now one has to exercise one’s imagination to think about a possible sale price.
- On a DCF basis, a PE fund couldn’t reasonably do this. Multiples are too high. That means a strategic buyer would be more likely. But Who? Why? And How much?
Tokyo Electron (8035 JP): Q1 FY03/25 flash update
- FY03/25 forecast: Revenue JPY2.30tn (+25.6% YoY), Operating profit JPY627.0bn (+37.4% YoY), Recurring profit JPY630.0bn (+36.0% YoY).
- R&D investment plan: JPY1.5tn over FY03/25–FY03/29, with JPY253.0bn in FY03/25 for new development buildings and equipment.
- Shareholder returns: JPY319.8bn total, including JPY79.9bn for share buybacks and JPY239.8bn for dividends.
Struggles in China Hurt Uniqlo’s Bottom Line
- Uniqlo Co. Ltd.’s strategy of raising prices in the face of rising costs has taken a toll on the Japanese clothing retailer’s bottom line in China due to growing competition and thriftier consumers.
- The fast-fashion chain’s Greater China profit and revenue both fell in local currency terms during the March-May period, dragged down by poor performance on the Chinese mainland and in Hong Kong, according to earnings results released last month by its parent company, Fast Retailing Co. Ltd. The results did not provide specific earnings figures for the period.
- Fast Retailing attributed the poor performance to lackluster consumer appetite, unseasonal weather and an insufficient product lineup to satisfy local customer needs.
A New Type Of “Deemed Shareholding” Has Emerged!
- For first time in 30 years, the fund is back, matching the demand of companies that want to reduce cross-holdings immediately and companies that want more time to sell cross-holdings.
- If the voting rights of cross-shareholdings contributed to the fund are retained, corporate governance will remain an issue until the fund’s investment is terminated.
- In reviewing recently filed annual securities reports, we often see cases where cross-held shares in more closely related companies are contributed to retirement benefit trusts instead of being sold.
Euglena Co Ltd (2931 JP): 1H FY12/24 flash update
- Sales increased to JPY23.6bn (+3.7% YoY), operating profit reached JPY348mn, recurring profit JPY309mn, and net loss JPY267mn.
- Biofuels segment sales dropped to JPY306mn (-66.0% YoY), with a segment loss of JPY251mn, reflecting the pilot plant’s closure.
- Revised FY12/24 forecast: sales JPY48.0bn (+3.3% YoY), adjusted EBITDA JPY3.8bn (-71.0% YoY), sales forecast lowered by JPY2.0bn.
Hosokawa Micron (6277 JP): Q3 FY09/24 Flash Update
- Orders decreased 8.4% YoY to JPY46.6bn, while order backlog declined 6.2% YoY to JPY41.9bn.
- Powder Processing Equipment segment sales rose 11.1% YoY to JPY49.4bn, with segment profit up 5.5% YoY to JPY5.9bn.
- Blown Film segment orders increased 46.1% YoY to JPY17.0bn, with segment profit up 141.4% YoY to JPY1.1bn.
Visco Technologies Corp (6698 JP): Q1 FY03/25 flash update
- Q1 revenue increased by 27.4% YoY to JPY839mn, achieving an operating profit of JPY40mn and a recurring profit of JPY49mn.
- Revised FY03/25 forecast: revenue JPY3.7bn (+16.1% YoY), operating profit JPY200mn, recurring profit JPY200mn, net income JPY13mn.
- Company recorded JPY150mn in tender offer-related expenses in Q1 and will not distribute an annual dividend for FY03/25.
Elecom Co Ltd (6750 JP): Q1 FY03/25 flash update
- Sales reached JPY27.6bn (+5.4% YoY), driven by mobile batteries, AC chargers, and beauty appliances from Tescom Denki Group.
- Operating profit was JPY2.5bn (-25.2% YoY) due to a rise in SG&A expenses despite higher gross profit.
- B2C sales were JPY18.8bn (+12.6% YoY), with e-commerce sales at JPY4.9bn (+21.5% YoY), and B2B sales at JPY8.8bn (-7.3% YoY).
Cyberlinks (3683 JP): 1H FY12/24 flash update
- Revenue: JPY7.9bn (+3.4% YoY), recurring revenue: JPY3.9bn (+4.8% YoY), operating profit: JPY567mn (-0.9% YoY), net income: JPY333mn (+132.9% YoY).
- Revenue: JPY2.3bn (+4.1% YoY), recurring profit: JPY341mn (-24.4% YoY), higher salaries and labor costs impacted profits.
- Revenue: JPY2.1bn (+23.9% YoY), recurring profit: JPY161mn (+977.9% YoY), strong sales of high-priced handsets increased revenue and profit.
G Tekt Corp (5970 JP): Q1 FY03/25 flash update
- Revenue increased 10.2% YoY to JPY86.8bn, with Japan leading at 31.9%, despite a 17.8% decline in China.
- Operating profit rose 17.2% YoY to JPY3.1bn, driven by revenue growth, sales composition changes, and cost reductions.
- Recurring profit and net income attributable to owners of the parent grew 9.4% and 11.5% YoY, respectively.
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