In today’s briefing:
- Shinko Electric (6967) Update – MitCorp In The Mix?
- Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake
- Money Forward (3994) | A Deep Dive into the Corporate Business
- Douzone Bizon: Cooperating with Amazon Web Services to Enter the Global SaaS Market
- SoftBank Group (9984 JP): More Downside Risk to the NAV than Upside Potential
- Hon Hai Tech Day Takeaways: Nvidia Announces AI Factories Partnership; Competitive Advantage for EVs
Shinko Electric (6967) Update – MitCorp In The Mix?
- Yesterday about 5 minutes before the close, Shinko Electric Industries (6967 JP) went into kehai, rising 8.6%, then falling back to end + 3% on the day.
- This morning, the stock opened down 2%, rose 4%, fell 4%, then rose 4%. All in the first 45 minutes. Then it fell back 4% and ended down 2% today.
- The proximate cause of all of this was a Reuters article out 5mins before the close yesterday suggesting Mitsubishi Corp (8058 JP) is considering bidding for Shinko Electric.
Shinko Electric (6967 JP): Bidders Circle for Fujitsu’s Stake
- Reuters reported that Mitsubishi Corp (8058 JP) is considering a joint bid for Fujitsu Ltd (6702 JP)’s 50% stake in Shinko Electric Industries (6967 JP).
- Fujitsu first flagged a potential stake sale in its 1HFY22 results last October. Previously rumoured suitors include Apollo Global Management, Bain Capital, Dai Nippon Printing, JIC and KKR.
- Shinko’s shares are up 73% YTD, which is not excessive compared to Ibiden Co Ltd (4062 JP) (up 63.2% YTD). The valuation is undemanding, which facilitates a potential offer.
Money Forward (3994) | A Deep Dive into the Corporate Business
- Money Forward’s Corporate SaaS business is thriving, with +44% year-over-year growth in ARR, a 139,000-strong customer base, and a healthy CAC-to-LTV ratio of 3.7x.
- Despite strong fundamentals, the stock’s 20% decline is attributed to market fixation on quarterly earnings and concerns about rising interest rates.
- The company’s untapped potential lies in the mid-market segment, where cross-selling opportunities across 18 paid products could significantly boost ARPA, tapping into a TAM estimated at $15 billion.
Douzone Bizon: Cooperating with Amazon Web Services to Enter the Global SaaS Market
- On 16 October, Douzone Bizon (012510 KS) announced that it is entering the global software-as-a service (SaaS) market in cooperation with Amazon Web Services (AWS).
- The agreement stipulates that Douzone Bizon will develop global SaaS through AWS support and enter overseas markets.
- We believe shares of Douzone Bizon have been oversold. Valuations have become more attractive and its cooperation with AWS is also likely to improve the company’s overseas sales and profits.
SoftBank Group (9984 JP): More Downside Risk to the NAV than Upside Potential
- There is downside risk to SoftBank’s NAV, due to valuations relating to Arm and the Vision Funds including LatAm; on aggregate, these holdings account for 70% of group equity value
- We believe that Arm’s super-premium valuation is unsustainable; there is lack of transparency on the valuations relating to the unlisted Vision Fund holdings, especially in SVF2
- We estimate that SoftBank shares trade at a 44% NAV discount, tighter than the average at the end of the last eight quarters; add to this Arm’s current over valuation
Hon Hai Tech Day Takeaways: Nvidia Announces AI Factories Partnership; Competitive Advantage for EVs
- Nvidia’s CEO Jensen Huang joined Hon Hai at its annual Tech Day yesterday, announcing an expansion of their partnership into the development of AI factories that will produce new software.
- Hon Hai unveiled its new ‘Model N’ EV, a van designed for logistics use cases. Its Model C SUV will have first customer deliveries in Taiwan in January 2024E.
- The latest Nvidia partnership expansion announcement and EV developments will transform Hon Hai’s unique value proposition to automakers. We continue to expect nearly 50% upside for the shares.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
