In today’s briefing:
- Asian Dividend Gems: Taiyo Kagaku
- Jafco Co Ltd (8595 JP): Q1 FY03/26 flash update
- Pacific Industrial (7250 JP): MBO at JPY2,050 Is Light but Likely Done
- Upgrading Rakuten Bank (TSE: 5838) To a Hold
- Full Report: Tsubakimoto Kogyo (8052 Jp) – July 10, 2024
Asian Dividend Gems: Taiyo Kagaku
- Although Taiyo Kagaku is not a household name among consumers in Japan, it has a strong reputation in Japan and internationally among F&B companies for functional, health-enhancing ingredients.
- Three main reasons we like the stock include strong loyal customers in the F&B segment in Japan/internationally, solid growth of sales and profits, and attractive valuations.
- Taiyo Kagaku currently has a SmartScore of 4.6 out of 5 which is among the top ranking stocks in the Japanese stock market.
Jafco Co Ltd (8595 JP): Q1 FY03/26 flash update
- Revenue increased by 40.9% YoY to JPY7.2bn, with operating profit up 67.6% YoY to JPY2.7bn.
- Capital gains reached JPY3.2bn (+29.7% YoY), primarily from listed shares, with an investment multiple of 2.1x.
- Total investment executed was JPY6.8bn, with JPY3.2bn in domestic VC investments, averaging 20.4% equity stakes.
Pacific Industrial (7250 JP): MBO at JPY2,050 Is Light but Likely Done
- Pacific Industrial (7250 JP) has recommended an MBO at JPY2,050, a 16.4% premium to the last close price and a 40.3% premium to the undisturbed price.
- While the offer is below book value (P/B of 0.71x), it represents an all-time high and is above the mid-point of the IFA DCF valuation range.
- Pacific Industrial has no history of activism. Therefore, the offer will succeed at current terms unless there is vocal opposition or an activist becomes a substantial shareholder.
Upgrading Rakuten Bank (TSE: 5838) To a Hold
- We believe that the Japanese-US trade deal helps to decrease uncertainty on monetary policy, with a potential rate rise in the near term improving the outlook for Japanese banks
- We remove our short on Rakuten Bank, as it is one of the beneficiaries of a near term potential rise in benchmark rates going forward
- In terms of PBV ratio, Seven Bank still trades at a 70%+ discount to Rakuten Bank’s PBV but the latter is impacted by the near-term interest rate outlook change
Full Report: Tsubakimoto Kogyo (8052 Jp) – July 10, 2024
- Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) is an industrial equipment–related trading company founded in 1916 with a history that goes back more than a century.
- Its strength lies in technological expertise developed through years of collaboration between the Engineering and Construction Management Departments, which gives the company a strong competitive advantage.
- The company also leverages co- development and strategic alliances starting from the research stage for products with leading market share, such as power transmission chains and platform screen doors.
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