In today’s briefing:
- 7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
- USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
- Shimano (7309) | Gears Grinding
- Daiseki Co Ltd (9793 JP): Full-year FY02/25 flash update
- Trial Purchase of Seiyu Creates New Japanese Retail Power
- Ohba (9765 Jp) – Announced FY2025/5 Dividend Forecast Increase and Expanded Shareholder Benefits
- Amvis Holdings Inc (7071 JP): Deteriorating Margin to Limit Near-Term Upside Potential
7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
- Today, Seven & I Holdings (3382 JP) reported full-year earnings. The FY2025 guidance looks OK. Not overly exciting. Optically, it falls short, but 7&i guidance includes York only for H1.
- The basic outlines of strategy in the Presentation are unchanged from the 6 March strategy report. The company seems convinced an IPO of SEI is a good thing. I’m underwhelmed.
- The company also announced that it would bring forward ¥600bn of its planned 6-year ¥2trln buyback program, and execute it this year. That’s good.
USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
- The original issues were discussed in depth in The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors (now unpaywalled). Hearings took place 24-26 March 2025.
- The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April.
- We don’t yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.
Shimano (7309) | Gears Grinding
- US tariffs could sharply cut Shimano’s H2 operating profit by up to 57%, despite limited direct exposure, due to opaque supply chains via China and Taiwan.
- Valuation would look stretched at 25x EV/EBIT versus historical 20x, if earnings fall short of current guidance.
- Shimano’s ¥530bn net cash pile offers room to boost shareholder returns through buybacks or dividends.
Daiseki Co Ltd (9793 JP): Full-year FY02/25 flash update
- Daiseki’s FY02/25 sales declined 2.8% YoY to JPY67.3bn, exceeding the forecast of JPY66.0bn.
- Operating profit fell 3.3% YoY to JPY14.3bn, impacted by TOB-related expenses and heavy snowfall.
- FY02/26 forecast: Sales JPY70.0bn (+4.0% YoY), operating profit JPY15.7bn (+9.7% YoY), OPM 22.4% (+1.1pp YoY).
Trial Purchase of Seiyu Creates New Japanese Retail Power
- Until last year, Trial was a Kyushu-based discount FMCG retailer, that had just completed its IPO.
- Today, it is one of the largest FMCG retailers in the country having won the bidding to acquire Seiyu from foster care under KKR.
- This is a massive development that will pressure other rivals to step up in order to compete.
Ohba (9765 Jp) – Announced FY2025/5 Dividend Forecast Increase and Expanded Shareholder Benefits
- Dividend Increase | On March 13, 2025, OHBA (hereafter, the Company) announced an increase to its FY2025/5 dividend forecast.
- Prior to the announcement, the Company had planned to pay dividends of JPY 20.00 in H1 and JPY 20.00 in H2, for a total of JPY 40.00.
- However, OHBA decided to increase its H2 dividend by JPY 2.00 to JPY 22.00 (for a full-year dividend of JPY 42.00).
Amvis Holdings Inc (7071 JP): Deteriorating Margin to Limit Near-Term Upside Potential
- While Amvis Holdings Inc (7071 JP) expects decelerating revenue growth of 26% for FY25 (FY24: 33%), EBITDA, operating, and net profits are likely to decline 9–22%.
- Personnel expenses as % of sales surged to 49.3% in Q1FY25 from 44.6% in Q1FY24. The trend is expected to continue with the increase in staff and training cost.
- Decelerating revenue growth, margin erosion, aggressive business expansion, and overhang related to improperly claimed medical service fee will limit the near-term upside potential for Amvis.
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