In today’s briefing:
- ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
- Visional IPO Lock-Up – Shares Have Performed Well, a Small Lock-Up Expiry to Look At
- Lawson Considering IPO for Seijo Ishii
- Mitsubishi Electric (6503 JP): Buy on Weakness for the Long Term
- BayCurrent: Strong Results but Guidance Seems Too Conservative
- ClearBridge International Growth ADR Strategy Portfolio Manager Commentary Q1 2022
- BayCurrent (6532) A Consulting Powerhouse Growing in the Double Digits
- Japan’s Governance: About the Article on Outside Directors
- ClearBridge International Growth EAFE Strategy Portfolio Manager Commentary Q1 2022
- S Foods (2292): Record Profits in FY2/22; FY2/23 Guidance Calls for NP of 10bn Yen and Dividend Hike
ToyoKen (1890) Mystery Bidder Is Yamauchi No. 10 Family Office – And That Changes Things
- A Nikkei article this morning says the mystery bidder behind WK1/2/3 Limited is Nintendo founding family’s Yamauchi No.10 Family Office. This changes things more than just knowing their identity does.
- To start, their website is the most fun investment management company website I have come across. It’s great. https://y-n10.com/. It’s also well worth reading. It’s also worth noting their history.
- Understanding the parameters here is key to understanding possible next steps.
Visional IPO Lock-Up – Shares Have Performed Well, a Small Lock-Up Expiry to Look At
- Visional Inc (4194 JP) had raised US$609m in its Japan IPO in April 2021, where it had been priced at the top end after books were reportedly multiple times covered.
- Visional is a HR technology company based in Japan. The company operates BizReach, an online recruiting platform that helps to connect professional job seekers to direct employers and third-party recruiters.
- The Pre-IPO shareholder, YJ2 Investment, will be released from its lockup on 16th Apr 2022, 360 days post-listing.
Lawson Considering IPO for Seijo Ishii
- Lawson Inc (2651 JP) acquired the upmarket supermarket operator, Seijo Ishii, in 2014 for ¥55 billion.
- It is now considering plans for an IPO for Seijo next year following a boom in the company’s fortunes during the pandemic.
- Net profit rose 13% last year and the potential for growth remains strong given the expansion of the wealth market in Japan.
Mitsubishi Electric (6503 JP): Buy on Weakness for the Long Term
- Investing in factory automation, power semiconductors and electric vehicle motors on a long-term view while interest rates rise and the economy weakens.
- Difficult operating environment now: Factory automation turning down; automotive hit by high materials costs and the semiconductor shortage.
- Share price down 25% from its 52-week high. Selling at 14x FY Mar-22 EPS guidance after a downward revision, which compares with a 9x – 20x 5-year P/E range.
BayCurrent: Strong Results but Guidance Seems Too Conservative
- Baycurrent Consulting (6532 JP) reported 4QFY02/2022 results today. Revenue grew 30.9% YoY to JPY16.2bn while OP increased 61.3% YoY to JPY6.8bn.
- Full-Year FY02/2022 revenues grew 34.4% YoY to JPY57.6bn and OP increased 58.7% YoY to JPY21.5bn. Both revenue and OP beat guidance by 1.9% and 2.4% respectively.
- BayCurrent’s shares are down 30% since its peak in September 2021, and we think current share price offers a good entry point.
ClearBridge International Growth ADR Strategy Portfolio Manager Commentary Q1 2022
- International equities were faced with numerous risks in the first quarter, ranging from resurging COVID-19 cases in large geographies like China to inflation and potential monetary tightening globally
- Europe was most directly impacted by the conflict as crude oil and natural gas prices spiked and already-challenged supply chains were further pressured
- One of the key drivers of the rotation from growth to value stocks was action in the bond market
BayCurrent (6532) A Consulting Powerhouse Growing in the Double Digits
- Another excellent set of results which supports our bullish view on the stock
- BayCurrent is a key enabler of DX in Japan and a beneficiary of the tight labour market
- The stock is down around 30% from its all-time high. Growth investors should be picking up stock
Japan’s Governance: About the Article on Outside Directors
- I would like to consider the issues in the Nikkei article regarding outside directors, based on a survey by Ministry of Economy, Trade and Industry.
- Compensation for outside directors is on the rise, but it’s higher for larger companies and differs from that of medium-sized companies. There are also issues regarding the disclosure of compensation.
- Personal ties to management is the motivation for 22% of respondents to become outside directors. There is also gap between what the company seeks and what the outside director thinks.
ClearBridge International Growth EAFE Strategy Portfolio Manager Commentary Q1 2022
- ClearBridge is a leading global asset manager committed to active management.
- ClearBridge believes Europe has the support structures and spending capacity to avoid a recession and keep an incipient post-COVID-19 recovery intact.
- We were active in repositioning the portfolio to better manage the volatile risk/reward environment in international markets.
S Foods (2292): Record Profits in FY2/22; FY2/23 Guidance Calls for NP of 10bn Yen and Dividend Hike
- On April 14, S Foods (2292, the company) announced FY2/22 sales of 358.8bn yen (+9.6% YoY) and OP of 17.4bn yen (+38.2% YoY, OPM 4.9%)
- The company’s full-year guidance for FY2/23 is sales of 375.0bn yen (+4.5% YoY), OP of 14.8bn yen (-15.1% YoY; OPM 3.9%), and NP of 10.0bn yen (-16.3% YoY)
- The company’s strong performance in the U.S. should make it a relatively strong performer among major meatpackers.
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