In today’s briefing:
- Buy Hamee Corp
- Tokyo Electron (8035 JP): Q1 FY03/26 flash update
- Kohsoku Corp (7504 JP): Q1 FY03/26 flash update
- Chugoku Marine Paints (4617 JP): Q1 FY03/26 flash update
- Shinmaywa Industries (7224 JP): Q1 FY03/26 flash update
- Kanematsu Corp (8020 JP): Q1 FY03/26 flash update
- Amid Declining Birth Rates and Working-Age Populations, Japan Still Hesitates to Embrace Diversity
- H2O Retailing (8242 JP): Q1 FY03/26 flash update
- Financial Products Group Co (7148 JP): Q3 FY09/25 flash update
- JCR Pharma (4552 JP): Izcargo Holds Revenue As Price Revision Impacts Growject; Guidance Reiterated
Buy Hamee Corp
- Some of my favorite situations are international spin-offs because they fly under the radar. Hamee has not been written up on VIC, Seeking Alpha or Twitter (I found one writeup on Substack).
- The company is 3 months away from breaking up into two separate companies which both look attractive. It is currently classified as a Specialty Retail company but will spin off a high growth, high margin, SaaS company in November that I estimate is worth more than the entire company’s market cap today.
- The stock looks compelling on an absolute basis (5.1x NTM EBITDA) and SOTP basis. I see 31% to 117% upside over the next 6 months as the break up is completed.
Tokyo Electron (8035 JP): Q1 FY03/26 flash update
- In Q1 FY03/26, the company reported revenue of JPY549.6bn, operating profit of JPY144.7bn, and net income of JPY117.8bn.
- The revised FY03/26 forecast projects revenue of JPY2.35tn, operating profit of JPY570.0bn, and net income of JPY444.0bn.
- The company plans aggressive R&D investments, increasing from JPY250.0bn in FY03/25 to JPY295.0bn in FY03/26.
Kohsoku Corp (7504 JP): Q1 FY03/26 flash update
- Revenue increased by 14.0% YoY to JPY30.6bn, with operating profit up 16.1% YoY to JPY1.1bn.
- Core product revenue grew: food product containers by 19.8% YoY, films and laminates by 11.4% YoY.
- Gross profit reached JPY6.1bn (+15.9% YoY), with SG&A expenses totaling JPY5.0bn (+15.9% YoY).
Chugoku Marine Paints (4617 JP): Q1 FY03/26 flash update
- In Q1 FY03/26, sales increased by 12.1% YoY, driven by marine and industrial paints, despite container paint declines.
- Operating profit rose 16.5% YoY to JPY3.9bn, aided by optimized selling prices and high-value-added product sales.
- Net income fell 48.9% YoY due to absence of prior extraordinary gains, despite improved gross profit margin.
Shinmaywa Industries (7224 JP): Q1 FY03/26 flash update
- Orders increased by 2.5% YoY to JPY74.3bn, while revenue rose by 0.4% YoY to JPY57.7bn.
- The Special Purpose Truck business saw a 26.2% YoY rise in orders to JPY42.9bn, with revenue up 4.2%.
- The company revised its FY03/26 forecast, expecting orders of JPY320.0bn and revenue of JPY285.0bn, despite weaker EV demand.
Kanematsu Corp (8020 JP): Q1 FY03/26 flash update
- Companywide revenue remained flat YoY at JPY251.1bn, while operating profit decreased by 9.6% YoY to JPY10.6bn.
- ICT Solution segment revenue rose 23.7% YoY, with operating profit increasing 64.0% YoY to JPY2.3bn.
- Aerospace and motor vehicles business saw revenue decline by 16.6% YoY, with a 21.2% YoY drop in operating profit.
Amid Declining Birth Rates and Working-Age Populations, Japan Still Hesitates to Embrace Diversity
- Since the government hasn’t taken any actions, the birth rate has dropped much lower than expected, and the population is shrinking much faster than predicted.
- There are various reasons why more people are choosing not to marry. It is necessary to implement policies that meet the needs of people with diverse views.
- With the decline in working-age population, it is necessary to incorporate as many diverse people as possible into human capital to maximize the abilities of as many people as possible.
H2O Retailing (8242 JP): Q1 FY03/26 flash update
- In Q1 FY03/26, Department Store business operating profit fell 56.6% YoY due to lower gross profit and higher SG&A expenses.
- Supermarket business operating profit increased 35.7% YoY, driven by higher gross profit from sales growth and new store formats.
- Shopping Center business sales fell 8.5% YoY, impacted by subsidiary divestitures and ongoing guest room renovations at Ours Inn Hankyu.
Financial Products Group Co (7148 JP): Q3 FY09/25 flash update
- Revenues reached JPY90.6bn (+11.5% YoY), driven by record-high sales in Domestic Real Estate Fund Business.
- Operating profit was JPY19.2bn (-16.5% YoY), with a gross profit margin of 30.0% (-7.5pp YoY).
- Non-operating income increased to JPY2.6bn (+17.2% YoY), while non-operating expenses decreased to JPY1.7bn (-7.3% YoY).
JCR Pharma (4552 JP): Izcargo Holds Revenue As Price Revision Impacts Growject; Guidance Reiterated
- Jcr Pharmaceuticals (4552 JP) revenue increased 5% to ¥8.6B in Q1FY26, mainly driven by Izcargo, marred to an extent by NHI price revision impact on Growject.
- Higher SG&A expenses (up 9%) on increased commission payments and increased R&D expenses (up 5% as clinical development activities progressed) resulted in operating loss of ¥606M.
- JCR’s two pipeline drugs are under Phase III trials: pabinafusp alfa (JR-141) for Hunter syndrome and JR-142, for growth hormone deficiency. Approvals not expected before late FY27 or FY28.
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