In today’s briefing:
- JAPAN ACTIVISM: Silchester AGM Effort Fails But Bank of Iwate (8345) Is Cheap As Chips
- Last Week in Event SPACE: Chugoku Bank, Link Admin, Rakuten, Tassal, Pipedo
- Paramount Bed (7817 JP): Record High Revenue Clocked in FY22; New Management Target Announced
- Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print
JAPAN ACTIVISM: Silchester AGM Effort Fails But Bank of Iwate (8345) Is Cheap As Chips
- Silchester aimed at four mid-sized regional banks and one tiny one. All four efforts failed, but two of the four banks are probably worth looking at.
- Bank Of Iwate (8345 JP) is the small one (tiny) worth looking at. It is 0.17x book, <7x earnings, 1.2x market cap in equity holdings, and better-than-average NIM.
- Over time, value will out. And while not multi-bagger compelling, the mechanical value arithmetic is interesting.
Last Week in Event SPACE: Chugoku Bank, Link Admin, Rakuten, Tassal, Pipedo
- Silchester’s effort to raise awareness in Chugoku Bank (8382 JP) failed. Still, if you had a basket of regional bank longs and shorts, Chugoku would be in the short basket.
- Dye & Durham reloads a higher Offer after Link Administration (LNK AU)‘s rejection. This probably still needs a (small) bump in terms to get up.
- Rakuten Inc (4755 JP)is trading at a significant discount to its SOTP. A part of its Fintech segment (Rakuten Bank) could be worth ~50% of total market cap.
Paramount Bed (7817 JP): Record High Revenue Clocked in FY22; New Management Target Announced
- Paramount Bed Holdings Co Lt (7817 JP) announced record high sales in FY22, driven by strong demand of hospital beds and achieved management target two year ahead of plan.
- While near-term challenges including high input cost and semiconductor supply shortage negatively impact FY23 performance, Paramount aims to achieve 33% revenue growth and 50bps operating margin expansion during FY22–27.
- Paramount is a strong play on COVID recovery. The shares gained 15% since I published bullish note on the company on January 17, 2022. More stream is still left.
Yaskawa Electric (6506) | Don’t Be Fooled by the “strong” Q1 Print
- Q1 OP +8%, but core OP (pre-adjustments) fell 18% YoY on significant decline in profitability
- Bulls may point to the surprising strength in orders, but the boost from China re-opening and weaker yen are not reflective of the underlying outlook
- We think Yaskawa will be hard-pressed to make full year guidance of ¥72b. Stay bearish for now
Before it’s here, it’s on Smartkarma
