In today’s briefing:
- S&P Global Clean Energy Index: Changes for Asia & Impact
- Japan Post Holdings – Good Play On the BOJ’s Conundrum
- TSI Holdings (3608) – That Old Gem – Lots of Visible Cash, and Lots More Invisible Cash
- Ichigo (2337): Positive Impression on Successful Sales of Hotel and Commercial Facility
- Japan’s Governance: About an Article on Quarterly Disclosure Controversy
S&P Global Clean Energy Index: Changes for Asia & Impact
- There are 12 additions to the S&P Global Clean Energy Index for Asia. The changes were announced on 8 April and will be implemented at the close on 22 April.
- Largest inflows are on Chubu Electric Power, China Yangtze Power, Adani Green Energy, Energy Absolute, LONGi Green Energy Technology, JA Solar Technology, Tianjin Zhonghuan Semiconductor and Sungrow Power Supply.
- The largest outflows are expected on Meridian Energy (MEL NZ), Contact Energy (CEN NZ) and Xinyi Energy Holdings Ltd (3868 HK).
Japan Post Holdings – Good Play On the BOJ’s Conundrum
- The BOJ looks increasingly trapped between a rapidly depreciating yen and a stated desire to hold rates low.
- We believe that the BOJ will eventually have to compromise on its 0.25% ceiling for the ten year JGB once inflation data gives them cover to do so.
- However, we believe Japan Post Holdings could potentially benefit from both macro forces and consider it one of the best risk-reward positions in Japan and perhaps globally.
TSI Holdings (3608) – That Old Gem – Lots of Visible Cash, and Lots More Invisible Cash
- TSI Holdings has long had a lot of cash and securities but a dearth of income. It’s still that way.
- Earnings were pretty good, but forecasts disappointing. The MTP is much more aggressive.
- The company has an EV/Revenue of 0.03x and EV/EBITDA of 0.5x. THEN it has a lot more interesting stuff hidden away. This could double or more in two years.
Ichigo (2337): Positive Impression on Successful Sales of Hotel and Commercial Facility
- Ichigo (2337, the company) announced full-year results for FY2/22. Net profit came in at 6.5bn (+28.8% YoY), within the company’s guidance range of 5.0-8.0bn yen
- The company’s FY2/23 guidance is for NP of 6.5-8.5bn yen (+0.4-31.3% YoY). The QUICK consensus NP forecast is 8.8bn yen and our NP forecast is 8.0bn yen
- The company announced share buybacks. The maximum number of shares to be repurchased is 1.17% of the total number of shares outstanding (excluding treasury shares)
Japan’s Governance: About an Article on Quarterly Disclosure Controversy
- Although the debate over the elimination of quarterly disclosures has resurfaced, it is likely that quarterly disclosures will continue by consolidating financial disclosure documents into a single document.
- There were concerns that TSE stock trading volume would decline if quarterly disclosure were abolished, based on the poorly reasoned argument that “quarterly disclosure encourages short termism among investors.”
- Financial Summary is required to disclose information promptly for “importance of disclosing information on investment decisions.” Quarterly Securities Report is required as a legal document for “reliability of financial statements.”
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