In today’s briefing:
- Trial Holdings Pre-IPO – Peer Comparison – Leading in Growth, Lagging in Margins
- Screen Holdings (7735 JP): Positive Impression from Hikone Factory Tour
- Takeda: Nimbus Acquired Psoriasis Drug Showing Positive Results in Key Trial
- Fast Retailing: Japan Demand Not Enough to Warrant an Upside, Downside Risks Looming on The Horizon
- Trial Holdings Pre-IPO -Thoughts on Valuation
Trial Holdings Pre-IPO – Peer Comparison – Leading in Growth, Lagging in Margins
- Trial Holdings (5882 JP) is looking to raise around US$375m in its Japan IPO.
- TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
- In this note, we will undertake a peer comparison against some of its listed peers.
Screen Holdings (7735 JP): Positive Impression from Hikone Factory Tour
- A tour of the Hikone factory last week left us impressed with Screen’s efficiency and the timing of its capacity expansion.
- The company’s semiconductor production equipment sales are likely to decline this year, but outperform the industry as a whole due to low exposure to memory.
- Buy for longer-term recovery after the recent advance has been digested.
Takeda: Nimbus Acquired Psoriasis Drug Showing Positive Results in Key Trial
- Takeda Pharmaceutical (4502 JP) revealed over the weekend that experimental drug TAK-279 (acquired from Nimbus) for psoriasis is showing positive results suggesting it could become the best of its type.
- On the other hand, Takeda’s dengue vaccine Qdenga has been granted approval in Brazil, a country with high prevalence of dengue.
- Takeda’s top selling drug Entyvio’s exclusivity in the US will end in 2026 and the company continues to see strong progress with its development pipeline and M&A deals.
Fast Retailing: Japan Demand Not Enough to Warrant an Upside, Downside Risks Looming on The Horizon
- We don’t think that a strong-looking demand in the domestic market is sufficient to warrant an upside to Fast Retailing (9983 JP)’s current consensus FY+2 EV/OP of 19.9x.
- Although on the downside we see significant risks with China’s rebound, decelerating revenue growth in high growth markets and margin pressure from wage hikes and inventory growth.
- Therefore, we think the company’s FY+2 EV/OP could potentially go down to around 15.0x, which is towards the bottom end of Fast Retailing’s pre-COVID FY+2 EV/OP range.
Trial Holdings Pre-IPO -Thoughts on Valuation
- Trial Holdings (5882 JP) is looking to raise around US$375m in its Japan IPO.
- TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
- In this note, we talk about earnings forecast and provide our thoughts on valuation.
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