In today’s briefing:
- Cosmo Oil (5021 JP) Accelerated Block Offering – Big Discount But… 👀
- Cosmo Energy Holdings Placement – Stock Has Done Well, Deal Might Be Expected but It’s Accelerated
- Conviction Call Dowa – Add Into This Correction
- Japan Tobacco 2022 High Conviction Update: The Russia Ukraine War Impact Is a Bit Overdone
- Monogatari Corporation (3097): Solid Sales, Especially in Japanese BBQ
- Kura Sushi (2695): Solid 1Q Results. Building Competitive Advantage Through Differentiation
Cosmo Oil (5021 JP) Accelerated Block Offering – Big Discount But… 👀
- Mubadala bought 20.8% of Cosmo Energy Holdings (5021 JP) in 2007 at ¥5,068/share (split-adjusted). A few months later it dipped below that and hasn’t seen that price since.
- The sovereign wealth fund sold 5% last year at ¥2,610, and just 7 months later is bailing on the other 15.7% at a 12-17% discount.
- Result? Float will rise. Index funds will buy a bit, and active foreign institutional investors will nearly double their holdings.
Cosmo Energy Holdings Placement – Stock Has Done Well, Deal Might Be Expected but It’s Accelerated
- Mubadala aims to raise around US$287m via selling its 15.8% stake in Cosmo Energy Holdings (5021 JP).
- The stock has been doing well owing to the rise in crude prices and Mubadala has sold some stock before and hence, the deal might not be wholly unexpected.
- However, its an accelerated bookbuild in Japan, which don’t have a great track record.
Conviction Call Dowa – Add Into This Correction
- Our 2022 conviction call Dowa Holdings is up 25% since we made that call and was up as much as 44% a few days ago.
- We believe the recent correction is a simple reaction to the speed at which it had been rising.
- We see significant further upside and unlike peers we believe all-time high earnings can be sustained even with commodity price moderation.
Japan Tobacco 2022 High Conviction Update: The Russia Ukraine War Impact Is a Bit Overdone
- Japan Tobacco (2914 JP)’s share price fell 14% from the bottom end of the upward trend channel and underperformed Topix by 6% over the last 15 days.
- Even if Russia yields zero dollars, we think the impact on JT’s valuation could be around 20%.
- With demand for cigarettes expected to go up during these war times, we think the market reaction of this scale is unwarranted.
Monogatari Corporation (3097): Solid Sales, Especially in Japanese BBQ
February SSS 102.9% vs. 2021, 88.2% vs. 2019 (pre-pandemic)
Monogatari Corporation (3097, the company) disclosed monthly data for February (on a preliminary basis)
Same-store sales for the Yakiniku division were 103.6% vs. February 2021 (129.9% for January), 69.2% vs. February 2020, and 95.2% vs. February 2019
Kura Sushi (2695): Solid 1Q Results. Building Competitive Advantage Through Differentiation
OP successfully on track with company target despite large-scale promotions
Segment earnings: Japan, US, and Taiwan entering full-scale recovery phase
Large-scale collaboration with Detective Conan in March and April
Before it’s here, it’s on Smartkarma
