In today’s briefing:
- Toyota Industries Back To Covid Lows Vs. Toyota Motors
- Shimizu Corp Partial Offer for Nippon Road (1884 JP) May Get Interesting
- I O Data Device (6916) MBO – Not as Clean And Nice As One Would Like
- Renesas – Accelerating
- Toyota – In-Line 3Q Sets Up Strong 4Q Beat
- Sumco – Consensus Probably Too Timid on Price Hikes
- Honda – Back and Forth OP Guidance Revisions
- IIJ (Buy) – Q3 21 Results Reaction: Core Business Drives Record Quarter
- Monogatari Corporation (3097): Japanese BBQ Extremely Popular in January.
- IBJ (6071): Neutral Impression on the Results.
Toyota Industries Back To Covid Lows Vs. Toyota Motors
- Toyota Industries (6201 JP)‘s implied stub and simple ratio with 8.5%-held Toyota Motor (7203 JP) has significantly bifurcated in the last 12 months.
- Yet recent and forward earnings at the stub level indicate this dislocation is unjustified.
- Toyota Industries is a set up at this current level.
Shimizu Corp Partial Offer for Nippon Road (1884 JP) May Get Interesting
- Shimizu Corp (1803 JP) has held ~25% of Nippon Road (1884 JP) and has now announced a Partial Tender Offer to go to 50.1%. It’s a 20-year high, but…
- … it’s the wrong price. And it has been. And a quasi-activist has built a 16% stake in recent years.
- The question is whether this gets done. They only need to buy 25.25% out of the 75% they don’t own, but it’s a question.
I O Data Device (6916) MBO – Not as Clean And Nice As One Would Like
- This MBO is designed to for the 77-year-old Founder to take the company private.
- The evolution of the balance sheet the last 12-18 months has been a little strange, and may not be benign. It has certainly changed the fair value lower.
- The question, as always, is whether someone will take this up.
Renesas – Accelerating
- Renesas’ 4Q results were strong as revenue came in well above guidance as we predicted, beating even our ¥310bn estimate at ¥314.4bn.
- EBITDA of ¥119.4bn was up 15.7% QoQ and should rise further thanks to a hefty backlog.
- We said previously that 2022 EBITDA could be on the order of ¥500-550bn rather than the ¥391bn which consensus projects… for reasons which escape us.
Toyota – In-Line 3Q Sets Up Strong 4Q Beat
- Toyota’s 3Q results were in-line with revenue and OP 2% above consensus and a slight QoQ improvement.
- The FY production plan was revised down as expected though we see slight upside to the 8.25m unit plan.
- Toyota has now averaged ¥853bn in OP over the last six pandemic driven quarters.
Sumco – Consensus Probably Too Timid on Price Hikes
- Sumco’s 4Q results were on the strong side with revenue beating by 2.3% and OP beating by 2.0%.
- 1Q guidance was also bullish with revenue guidance of ¥99bn 5.3% higher than consensus while OP guidance of ¥21bn was 12.8% higher.
- Guidance is still a touch conservative in our view, particularly on the margin side.
Honda – Back and Forth OP Guidance Revisions
- When Honda reported its 2QFY22 results it revised OP guidance down and we said that unnecessary.
- Indeed, with 3Q now out they revised guidance UP, above where it was at 3Q, making the revision pattern look like ¥660bn > ¥ 780bn > ¥660bn > ¥800bn.
- That remains conservative and the company should beat though we still see limited upside until next year’s prospects start to be priced in.
IIJ (Buy) – Q3 21 Results Reaction: Core Business Drives Record Quarter
- Revenue grew 4% in Q3 despite an acceleration in mobile erosion as core fixed-line revenue growth remained robust.
- Revenue growth unlocks operating leverage as margins reached record levels helped in part by lower mobile interconnect charges from DoCoMo.
- We remain at Buy and consider IIJ a core telecom holding in Japan
Monogatari Corporation (3097): Japanese BBQ Extremely Popular in January.
- Monogatari Corporation (3097, the company) disclosed monthly data for January (on a preliminary basis).
- Same-store sales for directly-owned stores were 125.1% vs. January 2021
- Many of the company’s restaurant formats use an all-you-can-eat system with a time limit
IBJ (6071): Neutral Impression on the Results.
FY12/21 full-year results: slight increase in effective OP
4Q (Oct-Dec): Directly-owned store business drove QoQ profit growth. Significant increase in the number of new franchisees as well
FY12/22 guidance: Showing aggressive stance toward medium- to long-term growth
Before it’s here, it’s on Smartkarma
