In today’s briefing:
- TOPIX Inclusions: Who Is Ready (Aug 2022)
- Joyful Honda Conducts Japan’s First* Official ASR – And It Remains Cheap on an MBO Framework
- Toyota Motor’s Bad Q1 Is a Buying Opportunity
- Z Holdings (Neutral) – Q1 22 Results Reaction: Weak Results Highlight Tough Year Ahead
- Z Holdings (4689) | Transformation Is Clearly Underway
TOPIX Inclusions: Who Is Ready (Aug 2022)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- In this insight, I have defined six key Segment Transfer requirements which prove to be decisive in this process.
- At present, there are 51 names that satisfy all of these conditions and there are more names that are close to being that group.
Joyful Honda Conducts Japan’s First* Official ASR – And It Remains Cheap on an MBO Framework
- The “Accelerated Share Repurchase” construct for share repurchases is used with some degree of regularity in the United States. It is theoretically legal, but heretofore unused, in Japan to-date.
- Home improvement retailer Joyful Honda (3191 JP) today announced a buyback of ¥2.5bn, in line with the Share Repurchase Plan announcement made in early June. That’s the first step.
- The rest is pretty easy and straight-forward, but given its novelty, it may deserve explanation.
Toyota Motor’s Bad Q1 Is a Buying Opportunity
- Toyota announces June quarter results at 13:25 JST on Thursday, August 4th JST. We think any dip is a buying opportunity.
- Contrary to consensus, Q1’s constraints were due to supplier lockdowns in Shanghai, not the chip shortage. In fact, Toyota is seeing larger than expected chip supplies.
- Toyota’s full-year guidance is the most low-balled in the industry, which is why it’s underperformed peers. Better Q2 chip supply should lead to a sharp upward revision after 1H FY3/23.
Z Holdings (Neutral) – Q1 22 Results Reaction: Weak Results Highlight Tough Year Ahead
- In the first quarter where full YoY comps are available, ZHD missed Redex and consensus expectations as demand for eCommerce and online ads slowed
- Management has kept FY22 financial guidance intact for now but economic uncertainty and the consolidation of loss-making PayPay in October makes an already-disappointing EBITDA target more challenging
- We think FY22 EBITDA guidance is likely to be revised down heading into Q2 results
Z Holdings (4689) | Transformation Is Clearly Underway
- The sell-side continues to focus on near-term quarterly numbers, while missing the long-term transformation of the Group
- The combination of Yahoo, Line and PayPay gives Z HD the best first-party data access in the whole of Japan – a clear winner in online advertising
- Perfect timing of the PayPay consolidation as losses have peaked.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
