In today’s briefing:
- JAPAN ACTIVISM: Silchester Goes After Shiga Bank
- JAPAN ACTIVISM: Silchester Goes After Chugoku Bank
- Square Enix – Eidos Sale Removes Downside Risks
- Japan Tobacco High Conviction Update: Russia Is Less Than Markets Feared & There’s Upside to DPS Est
JAPAN ACTIVISM: Silchester Goes After Shiga Bank
- In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
- The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
- While Bank of Kyoto (8369 JP) is the biggie, Shiga Bank (8366 JP) is another one with significant equity holdings.
JAPAN ACTIVISM: Silchester Goes After Chugoku Bank
- In early February 2022, Silchester International Investors (according to its website) sent letters to four low-ROE-earning Japanese regional banks proposing a new dividend policy.
- The management and boards of each bank rejected the policy proposal though two of the four had upped their proposed dividend or changed policy prior, and two upped it afterwards.
- While Bank of Kyoto is the biggest equity portfolio, Chugoku Bank (8382 JP) is a relatively large, provincial, regional bank, with middling equity portfolio. Different shape. Different situation.
Square Enix – Eidos Sale Removes Downside Risks
- Square Enix announced the of sale Eidos Interactive, Crystal Dynamics, Square Enix Montreal and associated IPs to Embracer for $300m.
- We had been puzzling over Square Enix’s strangely low guidance despite excellent momentum in its MMO business for some time.
- Considering the underperformance in HD Games profitability and this sale we think we can now put two and two together.
Japan Tobacco High Conviction Update: Russia Is Less Than Markets Feared & There’s Upside to DPS Est
- Japan Tobacco (2914 JP)’s 1Q22 was stronger than expected with revenue and OP surpassing consensus by 5.2% and 20.0% respectively despite the Russia Ukraine war situation.
- Although the company has maintained the semi-annual dividend at ¥75.0 per share, we predict there could be an upside to the DPS guidance during the next three quarters.
- With OP guidance of ¥534.0bn next year, we think Japan Tobacco should trade around ¥4,000-4,500 per share, indicating an upside of around 82-104%.
Before it’s here, it’s on Smartkarma
