In today’s briefing:
- StubWorld: On Valuing Toyota Industries (6201)’s Stub Ops
- Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well
- Nidec (6594 JP): Low Exposure to Trade War
- Kyowa Kirin (4151 JP): Muted 1Q25 Result; 2025 Guidance Reaffirmed; Near-Term Pain to Continue
- Sosei Group (4565 JP): Q1 FY12/25 flash update
- Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027
StubWorld: On Valuing Toyota Industries (6201)’s Stub Ops
- Yes, I agree with Travis Lundy that the ¥6tn headline price tag for Toyota Industries (6201 JP) backs out a ~6x forward EBITDA for the unlisted stub ops.
- Preceding my comments on the Toyota Group 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%.
Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well
- Otsuka Holdings (4578 JP) reported 12% YoY growth in revenue in 1Q25, as pharmaceuticals sales grew backed by a 35% YoY growth in Rexulti revenue to ¥75.7B.
- The company reiterated 2025 guidance. Higher costs to dent margins with subdued sales of Lonsurf, Jynarque.
- Indication expansion of Rexulti and Araris acquisition augur well for the company from a mid to long term perspective.
Nidec (6594 JP): Low Exposure to Trade War
- Geographically diversified production, gearing to growth technologies, and consolidation of operations should support sales and profits in a difficult political and economic environment.
- Negatives largely in the price, but uncertainty over tariffs, exchange rates, recession, and the outcome of the takeover bid for Makino Milling also remains to be seen.
- The shares have rebounded from their recent sell-off but are still selling at only 15x projected EPS for FY Mar-26, the lowest P/E ratio in more than a decade.
Kyowa Kirin (4151 JP): Muted 1Q25 Result; 2025 Guidance Reaffirmed; Near-Term Pain to Continue
- Kyowa Kirin Co Ltd (4151 JP) announced muted 1Q25 performance, with flat revenue and 50%+ drop in operating and net profits. Drug price revision and competition are dragging Japan revenue.
- Kyowa Kirin guided for 2025 revenue and operating profit of ¥478B (-4% YoY) and ¥80B (-16% YoY), respectively. The company expects 5% YoY decline in 2025 net profit to ¥57B.
- Since our last insight on Kyowa Kirin, shares lost ~15%. We opined “amid gloomy outlook, Kyowa Kirin shares will need time to recover.” Our take on the company remains same.
Sosei Group (4565 JP): Q1 FY12/25 flash update
- Revenue increased 44.1% YoY to JPY6.6bn, driven by Quviviq® revenue and milestone payments in Q1 FY12/25.
- R&D expenses rose 20.4% YoY to JPY3.8bn, influenced by increased R&D investment and a weaker yen.
- Core operating loss was JPY625mn, improved from JPY931mn in Q1 FY12/24, reflecting reduced non-cash and one-time expenses.
Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027
- Even if annual securities reports are filed earlier, a few days before the AGM, there is not enough time for institutional investors to use them for proxy voting.
- Many companies believe that they could control the AGM by two things: diversifying shareholder attention by holding the AGM on the same day and not providing sufficient information to shareholders.
- In its next request, FSA plans to encourage companies to move AGM to later date by changing “record date.” However, it’ll take time to come to a compromise with companies.
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