In today’s briefing:
- JAPAN ACTIVISM: Silchester Target Shiga Bank Dings the Div Proposal Badly
- Shift 3Q: Earnings Below Consensus but Heavy Hiring Spend Should Help in the Long Run
- Z Holdings (Neutral) – PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year
JAPAN ACTIVISM: Silchester Target Shiga Bank Dings the Div Proposal Badly
- In April, Silchester went after Shiga Bank (8366 JP)(JAPAN ACTIVISM: Silchester Goes After Shiga Bank), with an open letter decrying destruction of shareholder value, asking for a special dividend.
- They said Shiga Bank had excess cross-holdings and perennially low ROE (it does). Silchester asked for a minimal special div as a signal. Shareholders dinged their request at the AGM.
- Shiga Bank had a decent runup in the last several months – far outstripping its peers. Now it is rich. Time to take the trade off.
Shift 3Q: Earnings Below Consensus but Heavy Hiring Spend Should Help in the Long Run
- Shift reported 3QFY08/2022 results yesterday. Revenue grew 36.1% YoY to JPY17.1bn (vs consensus JPY18.3bn) while OP grew 25.7% to JPY1.3bn (vs consensus JPY1.54bn).
- Revenue from the largest segment Enterprise market grew 35.3% while enterprise segment grew 47.5% YoY during the quarter.
- According to Shift, the application of revenue recognition standard has lowered revenues and OP. The drop in OPM was due to heavy SG&A expenses as a result of hiring.
Z Holdings (Neutral) – PayPay Rebranding of ECommerce; We Remain Cautious in a Rebuilding Year
- Z Holdings will integrate its eCommerce platforms in a move that boosts the PayPay brand and may generate some (very) modest synergies
- We are publishing updated forecasts and setting a new target price at ¥550 but we remain cautious on the shares in the near term as consensus remains high
- Shares of ZHD still appear expensive at 14-16x our estimate of FY22e EBITDA and are more expensive than Alphabet at these levels (12x EBITDA)
Before it’s here, it’s on Smartkarma
