Nippon Investment Bespoke Research UK Ltd

Nippon Investment Bespoke Research UK

Equity Bottom-Up

<ul><li>Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6% YoY).</li><li>Due to multiple unknown factors surrounding the business environment such as impact from the US trade tariff policy and volatile FOREX, Daido Steel only released FY25 1H guidance.</li><li>The firm is guiding for 1H OP of ¥12,500mil (-31.5% YoY / -40.9% HoH) on sales of ¥275,000mil (-3.0% YoY / -5.7% HoH).</li></ul>

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6% YoY).Due to multiple unknown factors surrounding the business environment such as impact from the US trade tariff policy and volatile FOREX, Daido Steel only released FY25 1H guidance.The firm is guiding for 1H OP of ¥12,500mil (-31.5% YoY / -40.9% HoH) on sales of ¥275,000mil (-3.0% YoY / -5.7% HoH).

Daido Steel Co., Ltd (5471 JP): Research Update

<ul><li>Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at ¥34,070mil (-10.6% YoY) on sales of ¥433,961mil (-1.1% YoY).</li><li>The decline in OP is primarily due to tough comps – in FY23 the firm reported ¥7,200mil from real estate sales gains.</li><li>Although the 9-month OP has achieved 85% of the full-year guidance, Daido Steel did not change the full-year forecast due to some cost items such as fixed asset tax to be incurred in Q4.</li></ul>

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at ¥34,070mil (-10.6% YoY) on sales of ¥433,961mil (-1.1% YoY).The decline in OP is primarily due to tough comps – in FY23 the firm reported ¥7,200mil from real estate sales gains.Although the 9-month OP has achieved 85% of the full-year guidance, Daido Steel did not change the full-year forecast due to some cost items such as fixed asset tax to be incurred in Q4.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanyo-special-steel-co-ltd" target="_blank" data-smartkarma-citation="entities:15900:1" rel="noopener">Sanyo Special Steel (5481 JP)</a> has recommended <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a>’s tender offer at JPY2,750, a 37.4% premium to the last close.</li>
<li>The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range, below the Board's requested price, and unattractive compared to peer multiples. </li>
<li>The lack of an irrevocable and unattractive offer suggests that satisfying the minimum acceptance condition is likely challenging. This situation requires activism to force a bump.   </li>
</ul>



Sanyo Special Steel (5481 JP) has recommended Nippon Steel Corporation (5401 JP)’s tender offer at JPY2,750, a 37.4% premium to the last close.
The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range, below the Board's requested price, and unattractive compared to peer multiples. 
The lack of an irrevocable and unattractive offer suggests that satisfying the minimum acceptance condition is likely challenging. This situation requires activism to force a bump.   


Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism

<ul>
<li>FY24 GUIDANCE WAS REVISED.</li>
<li>POST FY24 GROWTH SCENARIO REMAIN UNCHANGED.</li>
</ul>


FY24 GUIDANCE WAS REVISED.
POST FY24 GROWTH SCENARIO REMAIN UNCHANGED.


Daido Steel Co., Ltd (5471 JP) Research Update

<ul>
<li>FY24業績ガイダンスは下方修正。来期以降の成長シナリオは変わらず。</li>
</ul>


FY24業績ガイダンスは下方修正。来期以降の成長シナリオは変わらず。


大同特殊鋼株式会社 (5471JP)　リサーチアップデート

Japan

DAIDO STEEL CO., LTD. manufactures and markets specialty steel products for automobiles, electronics, and construction use.  The Company also provides engineering services for industrial furnaces and waste disposal facilities, and develops various types of alloy metals.

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Daido Steel (5471 JP)

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6%...

Nippon Investment Bespoke Research UK

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at...

Nippon Investment Bespoke Research UK

Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism

The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range and unattractive compared to peer multiples. This needs...

Arun George

Daido Steel Co., Ltd (5471 JP) Research Update

FY24 GUIDANCE WAS REVISED. POST FY24 GROWTH SCENARIO REMAIN UNCHANGED.

Nippon Investment Bespoke Research UK

大同特殊鋼株式会社 (5471JP)　リサーチアップデート

FY24業績ガイダンスは下方修正。来期以降の成長シナリオは変わらず。

Nippon Investment Bespoke Research UK

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6%...

Nippon Investment Bespoke Research UK

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel’s cumulative FY24 Q1~Q3 earnings landed in line with the firm’s revised forecast, with the 9-month OP [IFRS basis] coming in at...

Nippon Investment Bespoke Research UK

Sanyo Special Steel (5481 JP): Nippon Steel (5401 JP)’s Light Tender Offer Begs for Activism

The offer is light, implying a P/B of 0.67x, below the midpoint of the IFA DCF range and unattractive compared to peer multiples. This needs...

Arun George

Daido Steel Co., Ltd (5471 JP) Research Update

FY24 GUIDANCE WAS REVISED. POST FY24 GROWTH SCENARIO REMAIN UNCHANGED.

Nippon Investment Bespoke Research UK

大同特殊鋼株式会社 (5471JP) リサーチアップデート

FY24業績ガイダンスは下方修正。来期以降の成長シナリオは変わらず。

Nippon Investment Bespoke Research UK

大同特殊鋼株式会社 (5471JP)　リサーチアップデート