In today’s briefing:
- [Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History
- Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers
- How Nexon (3659) Got Its Mojo Back
- Eisai Co Ltd (4523 JP): Leqembi at a Growth Juncture as New Markets Open Up; Margins Under Pressure
- GMO Internet Placement: Extremely Overvalued at the Moment
[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month – Data on Each, Plus History
- Buybacks are a central part of Corporate Japan’s effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
- This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn’t even include the biggest buybacks extant by March-end companies.
- We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.
Merger Arb Mondays (19 May) – Seven & I, Nissin, Welcia/Tsuruha, Mayne, ESR, OneConnect, Frasers
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads: Insignia Financial (IFL AU), ENN Energy (2688 HK), Smartpay Holdings (SPY NZ), Seven & I Holdings (3382 JP), ZEEKR (ZK US), Mayne Pharma (MYX AU), Smart Share.
- Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Nissin Corp (9066 JP), Sinarmas Land (SML SP), Fujitsu General (6755 JP), Torii Pharmaceutical (4551 JP).
How Nexon (3659) Got Its Mojo Back
- Nexon underperformed the software segment by 32% in the past 12 months, and analysts expect earnings to decline over the next 5 years.
- But the company beat Q1 consensus EBIT estimates.by 54% and the stock lurched 17% the very next day.
- Nexon’s business is immune to tariffs and tends to perform well in recessions. The company’s pipeline appears to be stronger than anyone imagined.
Eisai Co Ltd (4523 JP): Leqembi at a Growth Juncture as New Markets Open Up; Margins Under Pressure
- In FY25, Eisai Co Ltd (4523 JP) reported 6% YoY growth in revenue, driven by 3Ls. Operating profit rose 2% YoY and net profit climbed 9% YoY to ¥46B.
- Eisai guided for FY26 revenue of ¥790B, flat YoY. Revenue for Leqembi is expected to grow significantly (¥76.5B, up 73% YoY). Operating profit is expected to remain flat at ¥54.5B.
- Leqembi’s potential market expansion holds promise, especially in the developed economies with the proportion of aged population gradually on the rise and with a dearth of suitable treatment options available.
GMO Internet Placement: Extremely Overvalued at the Moment
- GMO Internet Group (9449 JP) is looking to sell its 33.4% stake in its subsidiary GMO Internet (4784 JP) to meet free-float requirements.
- Shares are very overvalued at the moment and should be worth a mere fraction of its current trading value.
- We have looked at the company’s deal dynamics in our earlier notes. In this note, we discuss the firm’s outlook as well as valuation.
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