In today’s briefing:
- Denso (6902) Buys Large Rohm (6963 JP) Stake – Register Gets Squeezier
- Fujitec (6406 JP): EQT’s Takeunder Likely a Done Deal
- StubWorld: Stay Short On GMO Internet (4784 JP); Haw Par Now Even More Stretched
- Don Quijote: Fitness, Tourists and Social Media
- Oisix Update: New Lines of Convenience Deli Selling Well
- Strike (6196 JP): Q3 FY09/25 flash update
- Kokuyo Co Ltd (7984 JP): 1H FY12/25 report update
- Paramount Bed Holdings Co Lt (7817 JP): Q1 FY03/26 flash update
- Is Progressive Dividend Distribution the Result of Half-Baked Cash Allocation?
- Astellas Pharma (4503 JP): Strategic Brands Drive Q1 Result; Positive Momentum to Continue
Denso (6902) Buys Large Rohm (6963 JP) Stake – Register Gets Squeezier
- Today after the close, a Nikkei article said Denso Corp (6902 JP) had recently lifted its stake in ROHM Co Ltd (6963 JP) from “about 0.3%” to “just under 5%.”
- Given the recent buy of 28mm shares of Rohm into the Nikkei 225, that means ~11.5% or perhaps more has been taken out of the public’s hands.
- Some may have come from cross-holders, but it’s not clear there are that many. This renders the stock more squeeze-able going forward. Rohm reports next week.
Fujitec (6406 JP): EQT’s Takeunder Likely a Done Deal
- Fujitec Co Ltd (6406 JP) has recommended a preconditional tender offer from EQT (EQT SS) at JPY5,700, an 8.1% discount to the last close price of JPY6,205.
- The precondition relates to regulatory approvals in several countries. The tender offer is expected to commence in late January 2026.
- Although the offer is light, it is likely to succeed, as it resulted from an auction process and was supported by irrevocables from the two prominent activists on the register.
StubWorld: Stay Short On GMO Internet (4784 JP); Haw Par Now Even More Stretched
- GMO Internet Group (9449 JP) needs to sell shares in GMO Internet (4784 JP) to achieve a “float” of 35% by 31 December 2026. Recent filings show they are selling.
- Preceding my comments on the GMO group – and Haw Par Corp (HPAR SP)/ UOB (UOB SP) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Don Quijote: Fitness, Tourists and Social Media
- Don Quijote announced a slew of initiatives over the past two months targeting tourists, a move to capitalise on the burgeoning fitness boom, and new social media use.
- The initiatives reflect the continued dynamism in the business both in the discount format and as city centre tourist meccas.
- While the company has closed some overseas stores, the outlook in Asia remains very strong.
Oisix Update: New Lines of Convenience Deli Selling Well
- Oisix was originally known for its food subscription boxes but then expanded into meal kits which brought in a new type of customer looking to save time.
- But with more busy and stressed customers no longer wanting to even spend 20 minutes cooking its meal kits, Oisix has launched 5-minute deli meals.
- Oisix remains the leading independent online food retailer and the most innovative. While subscriber numbers fell recently, sales per user are up.
Strike (6196 JP): Q3 FY09/25 flash update
- Revenue increased to JPY14.4bn (+8.8% YoY) with operating profit at JPY4.1bn (-17.6% YoY) and net income JPY2.9bn (-13.8% YoY).
- Strike closed 192 M&A deals (+4.9% YoY) with revenue per deal at JPY75.2mn (+3.7% YoY).
- SG&A expenses rose 19.7% YoY to JPY4.3bn, increasing the SG&A ratio to 29.7% (+2.7pp YoY).
Kokuyo Co Ltd (7984 JP): 1H FY12/25 report update
- KOKUYO’s revenue increased by 3.5% YoY, driven by strong demand in the Furniture business for office relocations and renovations.
- Operating profit rose by 11.1% YoY due to price revisions, while recurring profit declined by 3.0% YoY from foreign exchange losses.
- The full-year forecast for FY12/25 was revised, projecting revenue of JPY357.0bn and operating profit of JPY25.0bn.
Paramount Bed Holdings Co Lt (7817 JP): Q1 FY03/26 flash update
- In Q1 FY03/26, the company reported YoY declines in revenue and profit, with revenue at JPY22.3bn (-3.8% YoY).
- The company achieved 19.7% of its full-year FY03/26 revenue target, maintaining its initial forecast despite Q1 shortfall.
- Domestic revenue was JPY20.5bn (-1.8% YoY), while overseas revenue was JPY1.7bn (-23.2% YoY).
Is Progressive Dividend Distribution the Result of Half-Baked Cash Allocation?
- Companies that previously paid lower dividends compared to their cash on hand often adopt DOE or progressive dividends. In other words, they have too much cash on hand.
- Both DOE and progressive dividends would suggest that management of free cash flow solely lies with the company, and that only cash exceeding a certain level is returned to shareholders.
- Setting a predetermined limit on the allocation of free cash flow may hinder more dynamic cash flow allocation and risk-taking, resulting in limited shareholder returns.
Astellas Pharma (4503 JP): Strategic Brands Drive Q1 Result; Positive Momentum to Continue
- Astellas Pharma (4503 JP) reported 7% revenue growth in Q1FY26. Strategic brands grew 49% and contributed 22% of revenue. Driven by cost optimization, core operating profit increased 61%.
- Astellas reiterated FY26 guidance of 1% revenue growth and 5% core operating profit increase. Q1FY26 progress enhance conviction on comfortably meet FY26 guidance.
- With no near-term new launches anticipated for Astellas, performance of the strategic brands in existing markets as well as their indication and geography expansions should be the key drivers.
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