In today’s briefing:
- Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Isetan Shinjuku Takes 24% of Tokyo Market but Worries for Future
- Tabio: Licensing and Overseas Expansion Should Boost Sock Retailer
- Sinfonia (6507) | A Moment to Take Stock
- Nippo Ltd. (9913 JP): Research Update
- The Reality of the Concentration of AGM Dates Has Not Changed
- SanBio Co Ltd (4592 JP): Akuugo Shipments Expected To Commence In 2QFY26, New Credit Line In Place
- Tekken Corporation (1815 JP) – Responding to Social Infrastructure Demands…
Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
- The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
- Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.
Isetan Shinjuku Takes 24% of Tokyo Market but Worries for Future
- Department stores had a terrific year in FY2024, especially some of the more iconic stores like Isetan Shinjuku and Hankyu Umeda.
- Declining custom from tourists is beginning to be a worry but the emphasis on capturing data on core local customers has, and will, pay big dividends for the best stores.
- The rest of the sector however, will continue to contract but the polarisation will help highlight the luxury positioning of the best stores.
Tabio: Licensing and Overseas Expansion Should Boost Sock Retailer
- Tabio is the biggest retailer of hosiery in Japan but has suffered a decade of stagnant growth.
- It now has plans to grow e-commerce, men’s sports lines through licenses such as with FC Barcelona.
- It will also speed up overseas expansion, especially in China.
Sinfonia (6507) | A Moment to Take Stock
- Strong fundamentals priced in: Sinfonia’s sharp share price rally reflects robust FY3/25 results, but modest FY3/26 guidance limits near-term upside potential.
- Conservative outlook despite tailwinds: Management’s cautious projections for semiconductor and defense segments appear understated given ongoing structural growth in both industries.
- Valuation fair at current levels: Updated DCF suggests shares are reasonably valued; premium to peers justified by dual exposure to secular growth in aerospace and semiconductors.
Nippo Ltd. (9913 JP): Research Update
- Nippo produced record earnings in FY24, with OP of ¥1,970mil (+2.7% YoY) on sales of ¥44,890mil (+7.1% YoY).
- Thanks primarily to solid growth in order for print circuit boards [PCBs] used in generative AI servers and wafer polishing jigs manufactured in Nippo’s Okinawa factory, sales landed above the firm’s guidance of ¥42,000mil.
- FY25 is the final year of Nippo’s medium-term plan [MTP] which calls for an OP target of ¥2,000mil.
The Reality of the Concentration of AGM Dates Has Not Changed
- In 2024, 69.7% of AGMs concentrated on the last three days of June, but in 2025, 79.9% of companies will hold AGMs on the last four days of June.
- Most companies have established that they provide electronic convocation notices up to three weeks in advance. Meanwhile, only 1/3 of Prime companies provide English translations of all convocation notices.
- Over 80% of companies hold AGMs in formats that require attendance at the venue to have a say. Only 1.6% hold AGMs where a shareholder can attend and speak online.
SanBio Co Ltd (4592 JP): Akuugo Shipments Expected To Commence In 2QFY26, New Credit Line In Place
- SanBio Co Ltd (4592 JP) successfully completed three commercial production runs to accumulate inventories in preparation for launch. The earliest possible timing for shipment is expected to be 2QFY26.
- During FY25, SanBio did not generate any revenue. The successful launch and shipments are likely to have only a minimal impact on the financial performance of the company in FY26.
- SanBio has a cash runway through FY26. Further, in, company entered into a new committed credit line agreement (¥1B) with Mizuho Bank.
Tekken Corporation (1815 JP) – Responding to Social Infrastructure Demands…
- TEKKEN CORPORATION (hereafter, “the Company”) is a construction firm centered on railroad construction, with operations spanning civil engineering, architectural construction, and real estate.
- As an equity-method affiliate of JR East, which holds a 19.6% stake, the Company secures stable, long-term orders for key projects such as the improvement work of major stations and the new Haneda Airport access line.
- Railroad construction accounts for approximately 40% of consolidated net sales.
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