In today’s briefing:
- Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)
- Merger Arb Mondays (28 Apr) – Seven & I, Shibaura, Makino, Bright Smart, ENN Energy, Tam Jai
- Weekly Deals Digest (27 Apr) – Shibaura, Fujitsu General, Gunma/DHFG, Bright Smart, DN Solutions
- Keyence (6861 JP): A Beneficiary of Rising Interest Rates
- Japan Pure Chemical (4973 JP): Full-year FY03/25 flash update
- Kokuyo Co Ltd (7984 JP): Q1 FY12/25 flash update
Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)
- On Friday after the close, media reports surfaced that Toyota Motor (7203 JP) Group chairman and founding family member had put forth a take-private proposal to Toyota Industries (6201 JP).
- The number quoted was ¥6trln market cap (most) or EV (FT), financed by personal funds, 3 megabanks, and reportedly some group companies.
- ¥6trln market cap would be +50%. ¥6trln EV +16%. Simultaneously shocking but somehow not surprising. Opportunistic, and surprisingly elegant as a family/group/cultural solution. More below.
Merger Arb Mondays (28 Apr) – Seven & I, Shibaura, Makino, Bright Smart, ENN Energy, Tam Jai
- 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: Oneconnect Financial Technology (6638 HK), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
- Lowest spreads: Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ).
Weekly Deals Digest (27 Apr) – Shibaura, Fujitsu General, Gunma/DHFG, Bright Smart, DN Solutions
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
- Event-Driven developments: Shibaura Electronics (6957 JP), Fujitsu General (6755 JP), Gunma Bank (8334 JP), Bright Smart Securities And (1428 HK), Dickson Concepts Intl (113 HK), Dada Nexus (DADA US).
Keyence (6861 JP): A Beneficiary of Rising Interest Rates
- Keyence stands to benefit from a rising return on its large holdings of cash and securities, which are also available for investment and higher dividends.
- The company’s engineering-service business model should keep gross and operating margins high while it continues to expand overseas.
- Projected valuations at the low end of their 5-year ranges. Recession and abrupt appreciation of the yen are the primary risks.
Japan Pure Chemical (4973 JP): Full-year FY03/25 flash update
- Revenue in FY03/25 grew 10.4% YoY, with operating profit increasing 41.8% YoY, driven by generative AI demand.
- Net income surged 188.1% YoY due to gains on the sale of shares, despite slowing automotive sales.
- JPC anticipates steady demand for AI-related applications and expects revenue growth in FY03/26 despite higher expenses.
Kokuyo Co Ltd (7984 JP): Q1 FY12/25 flash update
- Revenue increased by 3.5% YoY to JPY99.5bn, driven by demand in the Furniture business for office relocations.
- Operating profit rose by 14.4% YoY to JPY13.5bn, with a 1.6pp increase in GPM due to price revisions.
- Net income attributable to owners of the parent decreased by 16.4% YoY, despite increases in operating and recurring profits.
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