In today’s briefing:
- KLINE (9107) – Chances for an Additional Buyback At Q3 Earnings?
- YFO To Take the Fight To Toyo Construction’s Board
- Nidec (6594) | Down but Not Out
- Baycurrent Consulting: High Value-Added Projects and New Consulting Areas Drive New Phase of Growth
- The Real Goal of a Company that Wants to Remain in Prime Market Is to Remain in TOPIX
KLINE (9107) – Chances for an Additional Buyback At Q3 Earnings?
- KLine is the cheapest of the three Japan majors in terms of forward consensus PER. And forward EPS ratios are improving as the company buys back shares.
- The CEO mentioned in December the possibility of additional shareholder return this fiscal year based on cashflow.
- In this insight, we look at what he knew then, and what he might know now, and the chances for an additional buyback (and how it might work).
YFO To Take the Fight To Toyo Construction’s Board
- YFO offered another Press Release yesterday. This one outlines what they see as Corporate Governance failures and offers a NEW POLICY.
- The Corporate Governance failures are indeed, failures. Toyo’s Board has failed to be transparent with shareholders, and in not at least addressing the takeover proposal, has failed its duties.
- NEW POLICY? Elect new independent directors “capable of improving the long-term corporate value and maximizing the interests of the general shareholders.” Soft war starts now.
Nidec (6594) | Down but Not Out
- Nidec slashed its full year operating profit guidance by 48% to 110 billion yen
- For Q3, Nidec reported an operating profit of 28 billion yen (-37% YoY), significantly below street expectations (51 billion)
- We remain bullish, expecting cost cutting efforts to ignite a profit recovery next year
Baycurrent Consulting: High Value-Added Projects and New Consulting Areas Drive New Phase of Growth
- Baycurrent’s share price has moved up 41.3% YTD with the company reporting strong earnings for 3QFY02/2023 which beat consensus estimates by a huge margin.
- With pandemic conditions fading off, share price began to fall with top-line growth declining slightly. However, growth rates have bounced back, and margins have seen strong improvement reaching new highs.
- Though share priced has rallied significantly over the last few months, we think there is further upside driven by value-added projects and expansion into new consulting areas.
The Real Goal of a Company that Wants to Remain in Prime Market Is to Remain in TOPIX
- Since simply increasing shareholder returns won’t increase corporate value/market cap, it’s more natural to present shareholder return policy together with reasonable earnings target, even when such policy is put forth.
- In fact, the companies exemplified in the Nikkei article saw share prices rise for companies with positive earnings outlooks and increased conviction that they will meet their medium-term earnings targets.
- This is a more serious and urgent issue for transitional companies, as companies with market cap of less than 10 billion yen in October 2023 will be excluded from TOPIX.
💡 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
