In today’s briefing:
- Nikkei 225 Deletions/Additions in March(?) 2022 Due to TSE Market Structure Changes
- Nippon Paint (4612) – A BIG Secondary Which Is a Tough Sell, with Variable Index Implications
- Horiba (6856 JP): New Growth Opportunity in Hydrogen Energy
- Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct
- Square Enix – WAGMI
Nikkei 225 Deletions/Additions in March(?) 2022 Due to TSE Market Structure Changes
- The TSE will move to a new cash equity market structure on 4 April 2022. There will be three new sections: TSE Prime, TSE Standard, and TSE Growth.
- The Nikkei Index Team in July 2021 announced a change to the Nikkei 225 Average Guidebook language which said constituents had to be members of TSE Prime going forward.
- At least one Nikkei 225 name and possibly two are headed for TSE Standard when the TSE makes its announcement on 11 January 2022. Suggested treatments are discussed.
Nippon Paint (4612) – A BIG Secondary Which Is a Tough Sell, with Variable Index Implications
- When Wuthelam took control of Asia’s largest coatings business, Nippon Paint Holdings (4612 JP), in August 2020, I was bearish. It was great for the Goh family but minorities lost.
- At the time, I said “Float is low”, and “There are cross-holders who don’t need to be there. This would be a very good sell for them. “
- 17 months later, 6 financial institutions will now sell their cross-holdings. There is float impact and some immediate index impact.
Horiba (6856 JP): New Growth Opportunity in Hydrogen Energy
- Measurement and analysis to qualify hydrogen fuel cells, vehicle engines and fueling stations, electrolysis and other hydrogen production processes should be a new growth driver for Horiba.
- Semiconductor equipment demand losing momentum, but should hold up in 2022. Weak demand for auto emission measurement systems is a key risk.
- Reasonably valued at 15x EPS guidance for FY Dec-21 and 1.45x book value, with a dividend yield of 2.0%.
Nippon Paint Holdings Placement – Nothing Particularly Exciting, Needs to Correct
- A group of shareholders of Nippon Paint Holdings, plan to raise around US$1.4bn via selling nearly 6% of the stock.
- The shares haven’t done much this year and despite having corrected by around 40% since the start of 2021, they are trading just about inline with analyst average target price.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Square Enix – WAGMI
- Blockchain games are gaining popularity and traction with new players. There are now over 1.4m people playing blockchain games daily
- The economics of blockchain gaming and NFT is driving a flood of new investment into the space, with $4b committed by VCs in 2021. This year will be significantly higher
- Square Enix understands that blockchain games are here to stay despite opposition from “legacy fans.” We expect further announcements on blockchain gaming to drive the stock
Before it’s here, it’s on Smartkarma
