In today’s briefing:
- Kito (6409) – Now Sitting Pretty
- Raccoon: Valuation Has Come Down but The Growth Momentum Remains Strong
- M3: Valuation to Further Drop as Earnings Momentum Slows Down
- Okada Manila Mess: How to Play This Chaotic Legal Drama Between Universal and Its Ousted Founder
Kito (6409) – Now Sitting Pretty
- Kito Corporation (6409 JP) is under offer by KKR unit Crosby, which announced a takeover in mid-May.
- Anti-Trust and foreign review will take a few months, and so we wait. In the meantime, the shareholder register has changed significantly. This remains an interesting option.
- And now, global market ructions offer arbitrageurs a meaningful opportunity.
Raccoon: Valuation Has Come Down but The Growth Momentum Remains Strong
- Raccoon Holdings, Inc. (3031 JP) is currently maintaining the COVID growth momentum while all others in Japanese e-commerce are face a significant drop-off in demand conditions.
- If this outperformance continues, valuation multiples that look somewhat decent today could look cheap beyond any reasonable doubts in a few years.
- In addition, if Raccoon succeeds in bringing down advertising spending to the pre-COVID level, the share price could rise above the previous peak of ¥3,300.
M3: Valuation to Further Drop as Earnings Momentum Slows Down
- M3’s shares have declined 53.2% over the last 12-months to JPY3,566 from JPY7,613 per share. Share price has lost 15% since 4QFY03/2022 earnings in April.
- The company’s Medical Platform business was a key beneficiary of pandemic which saw accelerated transformation in pharma marketing.
- However, with pandemic conditions easing off, m3’s earnings growth has begun to decelerate and we think there is further downside with weakening of core earnings.
Okada Manila Mess: How to Play This Chaotic Legal Drama Between Universal and Its Ousted Founder
- The Philippine gaming market is recovering fast from covid with the future of hs biggest casino property plagued by legal battles.
- Founder Kazuo Okada dismissed in 2017 by the Universal board over his alleged financial self dealing, is seen behind a May 31st strong arm takeover of the property.
- The Manila government thus far remains neutral but plans for a Spac IPO by Universal and a US based hedge fund is delayed, but is scheduled to debut by September.
Before it’s here, it’s on Smartkarma
