Japan: Shinsei Bank, Seibu Holdings, Seven & I Holdings, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

2022 High Conviction – Shinsei Bank Update

Shinsei Bank (8303 JP) is/was my High Conviction call for 2022.
SBI went to 47.77% in the Tender and is higher as Shinsei has bought back stock. Shinsei has more to go and could get funkier to buy back more.
8 February is the EGM to approve a new board and explicit SBI control. Delisting expectations will rise after that, but practically it will take time.

Seibu Holdings created a new Medium Term Management Plan in May 2021 including what it called Big, Hairy, Audacious Goals, or BHAGs.
That goal was to move a longtime asset-heavy business to an asset-light model by selling hotel and leisure assets, securitising others, and undergoing a Whole Business Restructuring.
Seibu Construction was sold in January and now it looks like 30 out of 40-odd Japan hotel and leisure facilities are nearly a done deal with a sale to GIC.

Numerous reports indicate that Seven & I is preparing its Sogo Seibu department store subsidiary for sale.
This follows years of calls from major investors to dispose of underperforming assets at Japan’s second largest retail conglomerate.
Seven & I still has many problems to solve in its domestic business. Ito-Yokado remains the biggest problem but perhaps won’t be disposed of while the company’s 98-year old founder lives.

It is said that an increasing number of companies are cancelling their own shares to meet prime market listing criteria that requires % of tradable shares be at least 35%.
However, in reality, more than half of companies have never cancelled treasury stock. Companies that have retired three or more times perform significantly better in Key performance and Corporate Governance.
It is worthwhile to continue to focus on the retirement of treasury stock as a litmus test for assessing the progress of corporate governance initiatives and performance improvement.

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