Daily Brief Japan: Resona Holdings, United Arrows, Carta Holdings, Inc. and more

In today’s briefing:

Japanese Banks – Cash Balances and the BoJ’s Negative Interest Rate Policy Exit

The Japanese banks’ share prices have barely moved following the Bank of Japan’s exit from negative interest rates; is it largely discounted or does the continued accommodative stance instil caution?
Japanese banks will benefit from 100% of their deposits at the BoJ earning 0.1%, as opposed to 40% of bank deposits which was the case up to the 20th March
We believe our positive recommendations are all geared into higher domestic interest rates; we highlight Resona, Mizuho and Suruga in this report for their high cash and at bank balances

United Arrows (7606 JP) is an industry leader in operating clothing select shops in Japan, and is the eighth largest apparel company in the country in terms of sales value.
In FY03/23, United Arrows reported revenue of JPY130.1bn, operating profit of JPY6.4bn, recurring profit of JPY6.9bn, and net income attributable to owners of the parent of JPY4.3bn
In May 2023, the company announced its long-term vision ending in FY03/33 and medium-term management plan ending in FY03/26 as the first step.

FY23/12 saw a strong push towards management initiatives aimed at a V-shaped recovery in financial performance.
On the other hand, conservative guidance was provided for FY24/12, due to the uncertain market sentiment, strategic cost increases, and the need to avoid downward revisions for three consecutive terms in the mid-year.
Although the stock price fell sharply after the 4Q FY23/12 earnings announcement, it has recently been recovering somewhat, perhaps fueled by the recognition and understanding of the conservatism of the guidance and the company’s true earnings potential.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network