In today’s briefing:
- The Skew in the Tsuruha-Welcia-Aeon Combination
- The End-April TOPIX Rebalance – US$2.1bn a Side
- Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- Takashimaya (8233 JP): Full-year FY02/25 flash update
- Demae-Can Co., Ltd. (2484 JP): 1H FY08/25 flash update
- Serverworks (4434 JP): Full-year FY02/25 flash update
- Vector Inc (6058 JP): Full-year FY02/25 flash update
- FP Partner (7388 JP): Q1 FY11/25 flash update
- Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance…
- San Holdings (9628 JP) – Century-Strong Enterprise Focused on Growth
The Skew in the Tsuruha-Welcia-Aeon Combination
- Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced their deal whereby Tsuruha merges with Welcia in December, and Aeon gains control of MERGECO.
- Orbis Investments – owner of 9.7% of shares out – complained. I think with good reason. Tsuruha is trading a little expensive to the ratio, but there’s 7.5mos to go.
- Interestingly, there’s real skew on this trade. It’s not overly complicated, and it is worthwhile thinking about it.
The End-April TOPIX Rebalance – US$2.1bn a Side
- This year there are 10 Free Float Weight Changes for April. There are 20 Liquidity Factor Changes, 2 Inclusions, and 3 M&A-related downweights. There are 90+ Share Count Change Downweights.
- This is a bigger Big April Basket than normally comes around. And there are some big flows. All trades are 28 April at the close.
- Total flow is ~US$2.1bn a side. 64 trades of >2 days of ADV, and of those, 27 with >US$10mm to trade (7 of US$50mm+). Top 20 in USD average 5dADV.
Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
- Fast Retailing (9983 JP)‘s weight in the Nikkei 225 (NKY INDEX) has increased to 10.81% which will lead to another reduction in the CPAF in September.
- Even after the reduction in CPAF and an increase in BayCurrent Consulting‘s PAF in September, there is a possibility of Fast Retailing being capped again in March 2026.
- The continued passive selling sets up interesting trading opportunities after periods of Fast Retailing (9983 JP) outperformance versus the other index constituents.
Takashimaya (8233 JP): Full-year FY02/25 flash update
- Total operating revenue for FY02/25 was JPY1.03tn, up 8.5% YoY, with operating profit at JPY57.5bn, up 25.2%.
- Domestic and Overseas Department Stores, along with Finance and Contract and Design segments, drove YoY revenue and profit growth.
- FY02/26 forecast anticipates revenue and profit growth, led by Domestic and Overseas Department Store segments, despite some segment challenges.
Demae-Can Co., Ltd. (2484 JP): 1H FY08/25 flash update
- Revenue was JPY20.9bn, a decrease of 18.3% YoY, with operating and recurring losses both at JPY1.3bn.
- Gross merchandise value was JPY84.8bn, down 13.1% YoY, with 30.4mn orders and 4.92mn active users.
- GPM improved to 20.3% for 1H, with operating expenses totaling JPY12.3bn, reflecting cost optimization efforts.
Serverworks (4434 JP): Full-year FY02/25 flash update
- Serverworks’ FY02/25 revenue was JPY35.7bn (+29.8% YoY), exceeding forecasts with a 100.4% achievement rate.
- Cloud Integration revenue reached JPY2.3bn (+23.7% YoY), driven by demand for cloud transitions and hybrid strategies.
- Resale services revenue was JPY23.3bn (+34.0% YoY), supported by increased AWS usage and new customer acquisitions.
Vector Inc (6058 JP): Full-year FY02/25 flash update
- Revenue reached JPY59.3bn (+0.1% YoY), with operating profit at JPY8.0bn (+15.7% YoY), and net income at JPY4.2bn (-10.4% YoY).
- PR and Advertising segment saw significant profit increase due to reversal of doubtful accounts provisions, despite flat revenue.
- Direct Marketing business impacted by food safety concerns, resulting in lower revenue and profit, despite record high sales recovery.
FP Partner (7388 JP): Q1 FY11/25 flash update
- Revenue for Q1 FY11/25 was JPY8.3bn, flat YoY, with operating profit at JPY798mn, down 41.5% YoY.
- The number of sales representatives increased to 2,546, while policy transfer agreements decreased to 4,981, down 27,362 YoY.
- New policies totaled 56,931, down 1.1% YoY, with new customers at 35,339, up 0.7% YoY.
Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance…
- FY2025/9 Q1 Results Review: In Q1 FY2025/9, LIFULL Co., Ltd. (hereafter, the Company) reported net sales of JPY 8,367 mn, up 2.2% YoY, driven by growth in the HOME’S Services segment.
- Operating profit turned positive at JPY 652 mn, thanks to higher sales in the HOME’S Services segment as well as cost-cutting efforts, particularly in the Overseas segment.
- In the HOME’S Services segment, sales rose 7.7% YoY and operating profit grew 24.2% YoY, due to growth in the Company’s client network and average revenue per agent (ARPA) driven by a stronger sales efforts and improved user interface (UI) and experience (UX).
San Holdings (9628 JP) – Century-Strong Enterprise Focused on Growth
- SAN HOLDINGS is the largest domestic pure-play End-of-Life service provider, with a network of 262 funeral halls spanning 15 prefectures in Japan.
- Despite the unmistakable demographic tailwind, intensifying competition has resulted in the company accelerating its strategic growth priorities with the landmark acquisition of peer Kizuna Holdings in September 2024.
- Approaching its centenary in FY3/32, the company plans to build a nationwide operation fuelled by M&A and to expand its service offering.
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