Daily Brief Industrials: Mitsui & Co Ltd, Toshiba Corp, Komatsu Ltd and more

In today’s briefing:

Mitsui & Co (8031) Buyback – Big Profit, Big Div, Big Buyback, Some Index Selling
Toshiba (6502) – Funding Deadline Risk Was Known 6+ Weeks Ago
Deep Dive: Komatsu (6301, KMTUY)

Mitsui & Co (8031) Buyback – Big Profit, Big Div, Big Buyback, Some Index Selling

Mitsui & Co Ltd (8031 JP) on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.
Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.
The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There’s also a fair bit of index selling the next 6mos.

There are several bits of news in the past few weeks indicating financing commitments might not meet the 7 Nov deadline. Principal among them the JIC/JIP split many weeks ago.
That suggested the 30 Sep and subsequent deadlines would be delayed. And it appears we now have the reason for it, and that is another cause of financing commitment delay.
This development suggests activists have another quiver in their arrow should privatisation not succeed. Toshiba has cheapened in the meantime.

Industrials have been quite resilient this year. Their stocks prices have run up as sector earnings fared better-than-expected, and as investors have looked for safety under the cover of ‘real economy’ stocks during a year in which tech is down big.
You may think that the train has left the station already with blue chip industrials like Caterpillar and Deere.
They’re certainly trading near all time highs! But hold on. There is one train which hasn’t left yet, and that is Komatsu.

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