Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanyo-trading-co-ltd" target="_blank" data-smartkarma-citation="entities:14733:1" rel="noopener">Sanyo Trading (3176 JP)</a> is a small specialised trading company (rubber, polymers, elastomers, etc). Niche, decent profitability/margins, highish ROE.</li>
<li>Banks in the MUFG and SMBC family are selling. Norinchukin is selling a bit too. </li>
<li>This is small in size but big in impact. 20% of Max RWF. 50d ADV. Unlike other recent, larger, offerings, this has no flow mitigants. But it's cheap.</li>
</ul>



Sanyo Trading (3176 JP) is a small specialised trading company (rubber, polymers, elastomers, etc). Niche, decent profitability/margins, highish ROE.
Banks in the MUFG and SMBC family are selling. Norinchukin is selling a bit too. 
This is small in size but big in impact. 20% of Max RWF. 50d ADV. Unlike other recent, larger, offerings, this has no flow mitigants. But it's cheap.


Sanyo Trading (3176 JP) - Small Secondary Offering as Banks Sell, More Later

Japan Experts, Extraordinary Performance, Astris Advisory Japan

Astris Advisory Japan

Japan Experts, Extraordinary Performance

Our Corporate Advisory service is designed to give clients access to a wider range of investors. These include Japan specialists as well as global investors. The goal is to help achieve a fair equity valuation.

Equity Bottom-Up

<ul><li>Q1 FY9/24 results were at a record high for the company for a first quarter period, with the company benefitting from stronger-than-expected demand from the auto sector, together with a forex tailwind from a weak Japanese yen benefitting the Overseas Subsidiaries segment; this business saw a major uplift in profitability YoY with positive trading conditions in the Americas and Thailand for exported Japanese goods.</li><li>Demand also remained firm in the company’s specialist areas of expertise such as bio-related and feed-related areas, and geothermal equipment.</li><li>The company has maintained FY9/24 guidance, which indicates some expectations of auto demand normalizing from pronounced levels in Q1 FY9/24.</li></ul>

Q1 FY9/24 results were at a record high for the company for a first quarter period, with the company benefitting from stronger-than-expected demand from the auto sector, together with a forex tailwind from a weak Japanese yen benefitting the Overseas Subsidiaries segment; this business saw a major uplift in profitability YoY with positive trading conditions in the Americas and Thailand for exported Japanese goods.Demand also remained firm in the company’s specialist areas of expertise such as bio-related and feed-related areas, and geothermal equipment.The company has maintained FY9/24 guidance, which indicates some expectations of auto demand normalizing from pronounced levels in Q1 FY9/24.

Sanyo Trading (3176) - Aiming for Growth and a Strong Start to FY9/24

<ul><li>Business investment and targeting growth – we view Sanyo Trading’s new long-term plan as a step in the right direction for the company to become a higher-quality business.</li><li>Whilst investment activities and macro headwinds may limit short-term growth prospects, the company has indicated ¥20bn to ¥30bn 5-year cumulative allocation in human capital, DX implementation, and M&amp;A, which should drive transformation into a more diversified and resilient business.</li><li>This commitment by management demonstrates its aim to drive higher returns by leveraging its core strengths of product differentiation, strong technical staff, and maintaining high customer success in new products and activities.</li></ul>

Business investment and targeting growth – we view Sanyo Trading’s new long-term plan as a step in the right direction for the company to become a higher-quality business.Whilst investment activities and macro headwinds may limit short-term growth prospects, the company has indicated ¥20bn to ¥30bn 5-year cumulative allocation in human capital, DX implementation, and M&amp;A, which should drive transformation into a more diversified and resilient business.This commitment by management demonstrates its aim to drive higher returns by leveraging its core strengths of product differentiation, strong technical staff, and maintaining high customer success in new products and activities.

Sanyo Trading (3176 JP) - Aiming to Elevate to a Higher-Quality Business

<ul><li>Impressive progress to date – Q1-4 FY9/2023 results were at record highs for the company, demonstrating a sustained track record of above-average profitability and disciplined capital allocation via M&amp;A.</li><li>Business diversification to life sciences has led to sales mix improvement and a more resilient business in our view.</li><li>Company guidance for FY9/2024 indicates a decrease in earnings YoY, attributed to the accumulation of strategic upfront investments for business development. </li></ul>

Impressive progress to date – Q1-4 FY9/2023 results were at record highs for the company, demonstrating a sustained track record of above-average profitability and disciplined capital allocation via M&amp;A.Business diversification to life sciences has led to sales mix improvement and a more resilient business in our view.Company guidance for FY9/2024 indicates a decrease in earnings YoY, attributed to the accumulation of strategic upfront investments for business development. 

Sanyo Trading (3176 JP) - Transitioning onto the Next Stage

<div><div><div><div><ul><li>Businessdiversificationpayingoff–Q1-3FY9/2023resultsshowed double-digit growth for sales at 15.3% YoY and OP at 26.8% YoY, despite high hurdles YoY.</li><li>The Machinery &amp; Industrial Products segment continues to be the core earnings driver, contributing approximately 60% of total operating profit, and growing segmental profits by 71.4% YoY.</li><li>A rebound in industrial material-related products due to Japanese auto production recovery and the contribution of Scrum Inc., consolidated in February 2022 boosted profits. </li></ul></div></div></div></div>

Businessdiversificationpayingoff–Q1-3FY9/2023resultsshowed double-digit growth for sales at 15.3% YoY and OP at 26.8% YoY, despite high hurdles YoY.The Machinery &amp; Industrial Products segment continues to be the core earnings driver, contributing approximately 60% of total operating profit, and growing segmental profits by 71.4% YoY.A rebound in industrial material-related products due to Japanese auto production recovery and the contribution of Scrum Inc., consolidated in February 2022 boosted profits. 

Sanyo Trading (3176) - Well-Positioned for Sustainable Growth

Japan

Sanyo Trading Co. Ltd. provides international and domestic trading services. The Company imports, exports, and sells a variety of products such as rubbers, chemical products, industrial products, machinery and materials, and scientific instruments.

Sanyo Trading (3176 JP)