In today’s briefing:
- Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising
- JX Advance Metals IPO – Digestable, but Not Really Attractive
- Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Mar25), 🚨 Read TSE Update Doc 3 🚨
- TOPIX Index Upweights: Final Expectations For “The Big April Basket” 2025
- JX Advanced Metals (5016 JP) IPO: Price Range Is Fair
- JX Advanced Metals IPO Valuation Analysis
- Medical Data Vision Co., Ltd (3902 JP): Research Update
- Hirano Tecseed Co., Ltd. (6245 JP): Research Update
Toyota’s New Shareholder Benefit Program – Either a Bribe for Retail or Odd Advertising
- Today, Toyota Motor (7203 JP) announced a new Shareholder Benefit Program (株主優待 or kabunushiyutai). Often these programs are designed to give small unknown companies a way to build shareholder awareness/loyalty.
- Toyota, needless to say, is not a small, unknown company building awareness. So this is a bribe or inducement to own shares or get people to use higher value product.
- This is not a great look, and not great for shareholders. It smells of Toyota trying to buy votes as crossholders sell. But below we look at the math.
JX Advance Metals IPO – Digestable, but Not Really Attractive
- JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
- JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
- We have covered various aspects of the deal in our previous notes. In this note, we will talk about the IPO pricing.
Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Mar25), 🚨 Read TSE Update Doc 3 🚨
- TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
- 161 new CGRs were filed in February 2025. Our tools show every report, links to every document, and now a new diff file tool. Input a name, see the changes.
- THE BIG NEWS: The “Document 3” (linked below) of the TSE’s 20th Council Meeting 18 Feb is worth reading carefully. This will set the stage for more takeover fun.
TOPIX Index Upweights: Final Expectations For “The Big April Basket” 2025
- In the TOPIX Index, some “low liquidity” names carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
- These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will see index inflows from passive trackers of TOPIX.
- In this insight, we take a look at Quiddity’s final predictions for the names that are likely to see their Liquidity Factors removed in April 2025 and their flow implications.
JX Advanced Metals (5016 JP) IPO: Price Range Is Fair
- JX Advanced Metals (5016 JP) has announced an IPO price range of JPY810-820 per share, which is 6.0%-4.9% below the IPO reference price range of JPY862.
- Relevant notes – JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case and JX Advanced Metals (5016 JP) IPO: Valuation Insights.
- My SoTP valuation of JPY860 is modestly above the IPO price range, suggesting that the price range is fair.
JX Advanced Metals IPO Valuation Analysis
- On 3 March, JX Advanced Metals (5016 JP) announced that the IPO will be offered at ¥810 to ¥820 per share (down from the initial indicative price of ¥862 per share).
- Our base case valuation per share is ¥863 which is 5.8% higher than the mid-point of the expected IPO price range of ¥810 to ¥820 per share.
- Given the lack of upside, we have a Negative view of this JX Advanced Metal IPO.
Medical Data Vision Co., Ltd (3902 JP): Research Update
- Medical Data Vision [MDV] reported FY24 (Dec year-end) earnings results with full-year gross profit [GP] of ¥4,331mil (-13.9% YoY), an operating profit [OP] of ¥3mil (-99.8% YoY) on sales of ¥5,906mil (-8.0% YoY).
- Given the Q3 performance, the firm revised down its full-year forecasts on 11 November, however, the full-year results fell short of the revised guidance of OP of ¥510mil on sales of ¥6,600mil.
- MTP’s profit targets remain unchanged, guiding for FY25 OP of ¥2,600mil and RP of ¥2,500mil.
Hirano Tecseed Co., Ltd. (6245 JP): Research Update
- HT has maintained its FY24 guidance of OP of ¥2,900mil (-10.4% YoY) on sales of ¥44,000mil (-6.3% YoY).
- Management commits to pay out the higher of a DOE of 3.5% or a dividend pay-out ratio of 60% during the current medium-term plan (FY24~FY27).
- HT has not changed the view on the medium to long-term growth potential in the EV market, however, for the time being, it remains cautious.
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