In today’s briefing:
- Fujitsu General (6755) – Deal Starts Early, Trades Tight – Done Deal
- Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look
- Matsui Securities (8628 JP): Full-year FY03/25 flash update
Fujitsu General (6755) – Deal Starts Early, Trades Tight – Done Deal
- The Paloma-Rheem Tender Offer for Fujitsu General (6755 JP) was expected to start in early July but is starting 10 weeks earlier. Big win for arbs.
- This was going to be a done deal. It didn’t trade rich to terms and it’s tough to see why activists would push when they haven’t pushed for years.
- The deal is now trading tight. Long arbs should probably re-allocate. Those hiding their beta here should hide their beta elsewhere.
Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look
- We identified overvalued, over-leveraged, low growth stocks on EPS growth, high PEG, low ROE, high P/BV, high leverage. Clients opined that EBITDA is more stable earnings parameter for such stocks.
- Based on clients’ feedback we now screen the stocks using EBITDA growth as the earnings growth parameter and EV as the corresponding valuation parameter.
- Our screen yields 30 stocks – 20 from Japan (largely property/REIT) and 10 from HK/China. 7 stocks are common to the EPS-PE and EBITDA-EV lists – mostly from Japanese property.
Matsui Securities (8628 JP): Full-year FY03/25 flash update
- Net operating revenue was JPY8.8bn, a decrease of 11.4% YoY and 1.6% QoQ, with operating profit at JPY3.2bn.
- Total commissions were JPY4.8bn, down 23.8% YoY but up 3.6% QoQ; brokerage commissions were JPY4.5bn.
- SG&A expenses totaled JPY5.7bn, increasing 1.1% YoY and 5.2% QoQ, with transaction-related expenses at JPY1.9bn.
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