In today’s briefing:
- Down from HK$40 to HK$15, Opportunity to Come After Hard Q2
- Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
- Toshiba – Surprise, Surprise, More Drama
Down from HK$40 to HK$15, Opportunity to Come After Hard Q2
- JDL’s stock price has declined from HK$40 at its IPO to HK$15.
- We believe JDL will recover from the lockdown in Shanghai in 3Q22.
- We also believe the stock has an upside of 46%.
Kyokuto Kaihatsu (7226 JP) Buyback – It’s Kinda Big, But There May Be More Behind
- Kyokuto Kaihatsu Kogyo Co (7226 JP) has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.
- But it isn’t fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders.
- The company today announced a buyback – additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.
Toshiba – Surprise, Surprise, More Drama
- The days since Toshiba’s last briefing session have been eventful with METI expressing concern about foreign investor control and a split emerging in the board over director nominations.
- These developments create significant risk of activist-friendly director candidates being vetoed in our view.
- Toshiba stock has been trading in line with Hitachi’s strong performance of late despite being more expensive and thus risk has increased.
Before it’s here, it’s on Smartkarma
