In today’s briefing:
- Fast Retailing (9983) – Summer Is the Time for Shorts
- Square Enix – Kingdom Hearts 4 and the Implications for Next Year’s Pipeline
- SanBio (4592 JP): Marketing Approval of First Product Expected This Year in Japan
- Money Forward Q1 22 Results: Mixed Quarter but Underlying KPIs Solid
- Fast Retailing: New Growth Pillar May Not Be Strong Enough to Support the Weight of Valuation
Fast Retailing (9983) – Summer Is the Time for Shorts
- Interim results were surprisingly strong considering the headwinds from China and rising costs
- 2H guidance looks optimistic. China remains a key risk and we still see risks to the gross margin
- The “R” word. Rising inflation, Rising Interest rates = Recession. Probably not good for consumers and certainly not good for high stock multiples
Square Enix – Kingdom Hearts 4 and the Implications for Next Year’s Pipeline
- Square Enix held their 20th anniversary event for Kingdom Heart over the weekend announcing a number of mobile titles as well the next mainline title Kingdom Hearts 4.
- While a release date was not offered we would expect a launch during the next fiscal year.
- Just as importantly, the announcement lends added weight to already leaked information on the company’s upcoming pipeline.
SanBio (4592 JP): Marketing Approval of First Product Expected This Year in Japan
- SanBio Co Ltd (4592 JP) is expected to receive approval for its first regenerative cell medicine SB623 for treating chronic motor deficit from traumatic brain injury in Japan this year.
- SB623, with current and future indication approvals, is targeting a large patient population of more than 50 million in major pharmaceutical markets globally. The indications have large unmet need.
- SanBio has a pipeline of five other pre-clinical drug candidates, entailing visibility beyond SB623.
Money Forward Q1 22 Results: Mixed Quarter but Underlying KPIs Solid
- Money Forward (3994 JP) posted solid Q1 financial results as revenue growth rebounded and EBITDA losses were within management’s forecast
- But revenue guidance for Q2 was weaker than expected and represents the lowest YoY growth to date which has raised questions on the effectiveness of marketing spend
- Full year guidance remains intact and the company expects that underlying growth in recurring revenue to remain robust which is positive for the long term thesis
Fast Retailing: New Growth Pillar May Not Be Strong Enough to Support the Weight of Valuation
- Even though 2QFY22 results were broadly in line with consensus, Fast Retailing (9983 JP)’s share price rose 8.8% as markets expected the worst amidst the Russian controversy and Shanghai lockdowns.
- However, this price movement seems unwarranted given the impact of Shanghai lockdowns could only be seen in the 3QFY22 financial statements.
- During earnings, FR introduced North America & Europe as new growth drivers to replace the declining Chinese market. But we are not convinced that they are up to the task.
Before it’s here, it’s on Smartkarma
