Daily BriefsJapan

Daily Brief Japan: Jafco Co Ltd, Socionext, Nitori Holdings, Shionogi & Co and more

In today’s briefing:

  • JAFCO (8595) Yields to Murakami Greenmail – Big Asset Sale, Big Buyback
  • Socionext (6526 JP) TOPIX Inclusion – Great Performer Deserves Profit-Taking
  • Nitori Retreats from the US but Gets Muscular in Japan and Asia
  • Shionogi & Co (4507 JP): Oral COVID-19 Drug Got Approval; Files Approval for COVID-19 Vaccine

JAFCO (8595) Yields to Murakami Greenmail – Big Asset Sale, Big Buyback

By Travis Lundy

  • Jafco Co Ltd (8595 JP) has long been known as a “cheap” listed “venture fund” because of its additional large (for it) holding in Nomura Research Institute Ltd (4307 JP).
  • Well-Known Japanese activist Yoshiaki MURAKAMI and his related companies bought a stake. JAFCO responded with a “Policy” (poison pill). Murakami-san ducked and dodged then bought more. Now the exit. 
  • JAFCO will sell its Nomura Research shares in a Secondary Offering, and conduct a large buyback via tender offer. Like other Murakami exits, this one is not designed for you. 

Socionext (6526 JP) TOPIX Inclusion – Great Performer Deserves Profit-Taking

By Travis Lundy

  • Socionext (6526 JP) was offered in a range of ¥3,480-3,650, oversubscribed, IPOed at ¥3,650 and closed ¥4200 on Day 1. We can assume that was the “right price.” 
  • Since then, while peers are up 19.8% in the 6 weeks since then, Socionext is up 66%. This year’s biggest Japan IPO has been a big winner.
  • The TOPIX inclusion is on Tuesday at the close. Beware, you don’t know who is in the stock and who is not.

Nitori Retreats from the US but Gets Muscular in Japan and Asia

By Michael Causton

  • Nitori is one of few Japanese retailers to brave the US market. The US has beaten Nitori for now and it will instead focus on Japan and Asia. 
  • Nitori’s ability to leverage its efficient supply chains to lower prices will likely lead it to further dominance at home and allow it to invest in the rest of Asia.
  • The company expects pressures on costs to ease in 2023 as the Yen rises but is working on reducing the cost of goods and operations.

Shionogi & Co (4507 JP): Oral COVID-19 Drug Got Approval; Files Approval for COVID-19 Vaccine

By Tina Banerjee

  • On November 22, Shionogi & Co (4507 JP) received emergency regulatory approval for Xocova  in Japan for COVID-19. It is Japan’s first homegrown oral antiviral for SARS-CoV-2 infection.
  • On November 24, Shionogi has filed for manufacturing and sales approval of S-268019, a recombinant protein-based preventive vaccine, for use in priming and booster (third) doses, against COVID-19.
  • Although Shionogi continues to expect ¥110 billion revenue from COVID-19-related products in FY23, the company has raised overall revenue guidance to ¥410 billion from ¥400 billion.

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