In today’s briefing:
- The TOPIX Liquidity Factor Adjustment – Still a Trade To Do
- Activist Murakami-San Goes Substantial on Cosmo Oil (5021)
- GoTo May Not Be So Expensive, If You Own It Through Beenos
- Honda – Expanding EV Partnership With GM
- Japan’s Governance: Articles About Torii Pharmaceutical’s AGM (2)
- Ohsho Food Service (9936): Record High Sales for March. Full-Year Sales Exceed the Company’s Target
- J-Front (3086) | Recent Datapoints Point to High-End Shoppers Loosening the Purse Strings
The TOPIX Liquidity Factor Adjustment – Still a Trade To Do
- Every year in April there are two TOPIX rebalance changes – the FFW review for July-September FY-end companies, and the annual liquidity factor adjustments.
- This year, the former is replaced by the TOPIX FFW Methodology Change for the new Market Structure. This is a big change, but it will not necessarily overwhelm the latter.
- Janaghan Jeyakumar, CFA‘s piece of 5 weeks ago discussing the Liquidity Factor basket has seen generally good performance. There are two days to go.
Activist Murakami-San Goes Substantial on Cosmo Oil (5021)
- Four weeks ago, the sovereign wealth fund of the UAE sold out of a 15% position in Cosmo Energy Holdings (5021 JP) they’d held for 15yrs.
- Today we see noted Japanese activist Murakami Yoshiaki and affiliates have purchased 5+% of the company, including a large chunk the day after the block trade.
- Oftentimes he buys stakes in industries where consolidation is overdue and/or natural. Construction has been one such sector. Refiners probably need consolidation too, but it’s not clear it’s easy here.
GoTo May Not Be So Expensive, If You Own It Through Beenos
- Beenos Inc (3328 JP) is a relatively small cross-border e-commerce and internet company from Japan with a consolidated GMV of ¥64.7bn last year.
- The company also runs an incubator platform to create new businesses and invest in start-ups mainly in emerging regions such as India and South-East Asia.
- Down below, we analyse the impact on Beenos’ valuation following GOTO’s impending IPO of which Beenos owns 0.5%.
Honda – Expanding EV Partnership With GM
- Honda and GM announced today that they would further expand their partnership on EV technologies.
- A new EV series will be produced for North America by 2027 and the two companies will collaborate on advanced battery technologies.
- This is an incremental positive for Honda and GM but the array of partnerships Honda is creating points to a lack of decisiveness on its part.
Japan’s Governance: Articles About Torii Pharmaceutical’s AGM (2)
- Torii Pharmaceutical rejected a shareholder proposal at its AGM to prohibit “revolving door” appointments of people from JT to the board of directors and to disclose the cost of capital.
- The Company disclosed the propriety of opposing these shareholder proposals, but this was not understood to be a sufficient explanation.
- Will the Company eventually terminate its parent-subsidiary listing if it does not meet the prime market listing criteria for governance?
Ohsho Food Service (9936): Record High Sales for March. Full-Year Sales Exceed the Company’s Target
- Ohsho Food Service (9936, the company) disclosed monthly data for its directly-owned stores for March (on a preliminary basis)
- FY3/22 full-year sales for its directly-owned stores were 77.2bn yen on an all-store basis (104.9% vs. FY3/21), and 74.9bn yen on a same-store basis (103.1% vs. FY3/21)
- In March, the company opened one new store (one directly-owned store) and closed no store
J-Front (3086) | Recent Datapoints Point to High-End Shoppers Loosening the Purse Strings
- J-Front Retailing, a Japanese department store operator, will announce full-year results on April 11.
- We expect FY2/23 guidance to be more optimistic as Japan normalises post COVID.
- Pent up demand for luxury goods to drive recovery of department stores. J-Front is still trading below book value.
Before it’s here, it’s on Smartkarma
