In today’s briefing:
- Lee Jae-Myung’s Campaign Pledge – Cancellation of Treasury Shares
- Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!
- Fanuc (6954) | Growth Flickers, Visibility Dims
- Shimano (7309) | Coasting, Not Sprinting
- Fujifilm: Bio CDMO – A Success in the Making
- Lee Jae-Myung’s Policies Likely to Negatively Impact Korean Banks
- Timee: Recent Setback in Share Price Offers an Attractive Entry Point
- Talos Energy Inc: Valuation Discount/Estimate Update
- UMC (2303.TT; UMC.US): 2Q25 Guidance Beat; Tariff Affection Unknown; No GF Merger Plan Right Now.
- Asia Real Estate Tracker (23-Apr-2025): Sino’s Robert Ng, kids tagged under SG foreign interference law
Lee Jae-Myung’s Campaign Pledge – Cancellation of Treasury Shares
- Lee Jae-Myung (who is leading in most election polls) has mentioned cancellation of treasury shares as one of the key campaign pledges to improve the corporate governance in Korea.
- If the cancellation of these shares becomes mandatory, the SK Group and Lotte Group will be most affected.
- We provide a list of 21 stocks in KOSPI200 that have the highest ratios for treasury shares/total outstanding shares. These stocks could receive more attention in the next several months.
Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!
- Jafco divests overseas operations to focus on domestic capital markets
- The company continues to focus on shareholder returns in a meaningful way
- Domestic venture capital returns exceed overseas returns historically and the future looks bright
Fanuc (6954) | Growth Flickers, Visibility Dims
- Fanuc returns to revenue growth, driven by robomachine demand in Asia, but core robot sales remain weak after last year’s EV-driven surge.
- Management offered no guidance for FY3/26, citing tariff and FX uncertainty; we cut forecasts, with downside risk still looming large.
- A ¥50bn buyback provides limited support, but shares may stay stuck until global capex trends and trade policy clarify.
Shimano (7309) | Coasting, Not Sprinting
- Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.
- Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.
- Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management’s guidance ends up on the optimistic side.
Fujifilm: Bio CDMO – A Success in the Making
- Fujifilm announced today that the company has entered into a 10-year manufacturing supply agreement valued over US$3bn with Regeneron Pharma to provide US-based production to Regeneron’s biologic medicines.
- Fujifilm’s Bio CDMO business, operating through FUJIFILM Diosynth Biotechnologies, has achieved significant success and growth, driven by a combination of strategic investments/acquisitions, with a focus on expanding its capabilities.
- Bio CDMO business has achieved rapid expansion over the years, and aims to generate revenues of ¥200bn for FY03/2025 and reach ¥500bn by FY03/2028E which seems attainable to us.
Lee Jae-Myung’s Policies Likely to Negatively Impact Korean Banks
- Among the various industries, the banking sector could be negatively impacted if Lee Jae-Myung becomes the next President of Korea.
- Lee Jae-Myung has pledged providing a “basic loan” of 10 million won per citizen which is likely to negatively impact the Korean banks since it lacks rigorous credit checks.
- There is an increasing likelihood that Lee Jae-Myung could raise the pressure on local banks to share the responsibility of social policies by contributing more money to support them.
Timee: Recent Setback in Share Price Offers an Attractive Entry Point
- Timee Inc (215A JP) ’s share price has been volatile during the last few months despite the company reporting a strong set of results for 1QFY10/2025.
- Timee is the market leader in Japan while Mercari Hallo is still attempting to build its business. Our analysis shows that there is further room for Timee’s earnings to expand.
- Some of Japanese high-growth companies (incl. Monotaro, GMO Payment and Shift) have traded at exorbitant multiples during their high growth phase and we think Timee’s valuation multiples are justified.
Talos Energy Inc: Valuation Discount/Estimate Update
- Talos’ current ~$2.5 billion enterprise value (EV) reflects a 23% discount to the ~$3.2 billion PV-10 of company’s year-end 2024 proved developed reserves using flat prices of $65/bbl for oil and $3/MMBtu for natural gas.
- Total proved reserves at year-end were 194 MMBoe (74% oil/81% liquids). Estimated probable reserves at year-end 2024 were 125.3 MMBoe, having a PV-10 on the same flat pricing of ~$2.7 billion.
- On a proved plus probable basis, the discount widens to 58%. Under SEC pricing ($76.32/bbl and $2.13/MMBtu), the discount was 41% for total proved and 66% for proved plus probable.
UMC (2303.TT; UMC.US): 2Q25 Guidance Beat; Tariff Affection Unknown; No GF Merger Plan Right Now.
- 2Q25 guidance: Wafer shipments: increase 5~7%, ASP in USD: flat, GM: About 30%.
- The US tariffs affect customer outcome visibility in 2Q25 and 2H25 is limited.
- UMC is seeking a strategic plan to enhance shareholder value, and there is no ongoing merger plan at the moment, which implies no merger plan with GF.
Asia Real Estate Tracker (23-Apr-2025): Sino’s Robert Ng, kids tagged under SG foreign interference law
- Robert Ng, a significant figure at Sino, is implicated in Singapore’s foreign political interference law due to his involvement with children.
- Cuscaden Peak secures approval for the $2.1B privatization deal of Singapore’s Paragon REIT, marking a significant milestone in the real estate industry.
- PAG DCU appoints Sanjay Goel, formerly of American Tower, as their new CEO, signaling a strategic move in their leadership team.
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