Japan: Kawasaki Kisen Kaisha, Softbank Group, Pan Pacific International Holdings, Logan Property Holdings, Tokyo Stock Exchange Tokyo Price Index Topix, AEON Mall, Mipox Corp, Mani Inc and more

• The review period runs from 18-29 April for the May SAIR, the results will be announced on 13 May (Asia-time) with the changes implemented after the close on 31 May.
• Most of the potential changes are in China with few changes spread across the other Asian markets. China loses the most number of index members, followed by Japan.
• There are over 4 weeks to the start of the review period and there will be changes over that time as stock prices move around.

• When Softbank announced its strange buyback in November we wondered aloud whether buyback maximums of ¥1trn and 250m meant Softbank foresaw a ¥4,000 share price in its future. 
• With the stock price now having jauntily sashayed down to ¥4,265 it is a question why they aren’t more aggressive with their buyback. 
• A question that may be answered by all the cash raising measures that Softbank is engaged in perhaps?

• Pan Pacific International Holdings (7532 JP) is Japan’s largest discount retailer but also a major GMS operator. 
• It is on track to achieve consolidated sales around ¥1.87 trillion by the end of the year, 85% of this in Japan despite the lack of inbound tourists.
• PPI also has a great retail proposition in Asia which is proving popular. The long-term outlook at home and overseas looks solid.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Softbank Group
• Sunac China Holdings

• This article more directly examines whether the momentum of improvement in corporate governance practices is related to stock returns.
• Significant positive correlations are shown between changes in Metrical score and changes in market capitalization, changes in foreign ownership, changes in ROA (past 3-years average) and changes in Tobin’s q.
• Not every year sees the same degrees of improvement in corporate governance as the current year. In 2021, CG Code was revised and the prime-market-listing-standards adopted some items from it.

• Japan has seen a large drop off in new mall developments in recent years. 
• This is partly due to a dwindling supply of viable locations but also because of competition from e-commerce.
• To make malls more relevant, Aeon Mall is shifting to a more localised approach with a broader range of services.

• Geared to rising demand for semiconductor and other industrial polishing services in general and rapid growth in the production of advanced power semiconductors in particular.
• Sales and operating profit could double over the next 5 years, but dilution from capital raising might hold EPS growth to 50%.
• Selling at 9.2x EPS guidance for FY Mar-22. 10x potential EPS implies 65% upside. Risks include small market cap and potentially volatile quarterly earnings.

• Mani Inc (7730 JP) shares have plunged 19% since we have published our bearish insight on the company on January 13.
• FY22 guidance implies 22% and 56%, y/y, decline in operating profit and profit attributable to owners of parent, respectively, in Q2FY22.
• We are cautious on H2FY22 recovery and financial performance of Mani due to worsening COVID-19 condition in China, which is one of its major markets.