Daily Brief Japan: TSE Tokyo Price Index TOPIX, Nec Networks & System Integr, Honda Motor and more

In today’s briefing:

There Are Still Very Many Companies with High Cash on Hand Relative to Sales
(Mostly) Asia-Pac M&A: Makino, Henlius, GAPack, Nec Networks, Suntec REIT, VCredit, Pentamaster
Last Week in Event SPACE: Honda, Shanghai Henlius, Exedy, Arcadium Lithium

There Are Still Very Many Companies with High Cash on Hand Relative to Sales

Of course, it’s desirable to be able to use cash to find effective investments, but it is important to return cash on hand with an immediate impact on ROE improvement.
Looking at all listed companies, there are a great many companies that have a large amount of cash on hand relative to sales.
Denso’s measures to reduce policy shareholdings plus share buybacks will directly improve ROE, even if the background was a desire to stem the rise in foreign shareholdings.

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Four new deals this week: Makino Milling Machine Co (6135 JP)‘s hostile Offer; VCredit Holdings Ltd (2003 HK)‘s takeunder; Vesync (2148 HK)‘s Scheme, and Pentamaster International (1665 HK)‘s Scheme.
Key updates/news took place on: Shanghai Henlius Biotech (2696 HK), Greatview Aseptic Packaging (468 HK), Nec Networks & System Integr (1973 JP), and Suntec REIT (SUN SP).

Honda (7267 JP) announced a HUGE ¥1.1trln buyback. At ~¥1500/share, this would increase EPS by 17+%. Buy the shares in the low ¥1,400s. Expect this to be a range trade.
Shanghai Henlius Biotech (2696 HK)‘s Circular is now out. Hoome straight and done deal.
Murakami-San has started selling Exedy Corp (7278 JP), earlier than expected. Best to get out first, ask questions later.

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