In today’s briefing:
- Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400
- [Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer
- Quiddity Leaderboard STAR 50/100 Jun25: Rare Sector-Neutral ADDs Vs DELs Trade with Positive Momentum
- Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
- TSMC (2330.TT; TSM.US): No Clients Have Reacted to the Tariff Changes Since Trump Reacted so Quickly
- TSMC 1H25 Revenue up 37% YoY. Upside to Full Year Outlook. AI and CoWoS Revenue Double in 2025.
- Smartphone Market Grew 2% in 1Q25 with 2 Positives Boosters: Apple Restocking in US, China Subsidies
- Elevarm Nets US$4.25M to Boost Smallholder Horticulture Farmers with AI | E27
Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400
- In February Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share after getting the cold shoulder for months.
- Minebea Mitsumi (6479 JP) was asked to bid, and they did a week ago, bidding ¥4,500/share. Yesterday the Shibaura CEO was in an article saying an overbid would be considered.
- Mid-Day, I boomeranged my piece, saying I thought Yageo would overbid. Today after the close, Yageo has overbid with a whopping ¥5,400/share bid, with unchanged start date of 7 May.
[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer
- Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
- Topcon’s Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level.
- If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole.
Quiddity Leaderboard STAR 50/100 Jun25: Rare Sector-Neutral ADDs Vs DELs Trade with Positive Momentum
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
- In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the June 2025 index rebal event.
Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
- Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
- All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value.
- There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA’s DCF range, potentially justifying a higher offer.
TSMC (2330.TT; TSM.US): No Clients Have Reacted to the Tariff Changes Since Trump Reacted so Quickly
- Revenue expected to be USD$28.4-29.2 bn (+13% QoQ/38% YoY), with gross margin projected to be 57-59% and operating profit margin at 47-49%.
- Tariffs still have uncertainties, so our current capability to share is expected to maintain 24-26% YoY.
- Taiwan Semiconductor (TSMC) – ADR (TSM US) plans to build 6 Fabs in Arizona, with 2nm being the main focus there, hence 30% will be allocated there.
TSMC 1H25 Revenue up 37% YoY. Upside to Full Year Outlook. AI and CoWoS Revenue Double in 2025.
- 2Q25 strong revenue. Full year outlook (revenue up mid-20% YoY) looks a bit low since 1H25 is growing at ~37%. CoWoS and AI revenues still expected to double in 2025.
- Revenue and capacity outlook: very confident. US capacity is accelerating. But margins dilution warning, part of this is US import tariffs uncertainty. Strong denial on any Intel linkup.
- The stock is cheap at 14.7x 2025 EPS (consensus probably a bit low) and 12.5x 2026 EPS. The market might still be in correction mode, but TSMC is nicely discounted.
Smartphone Market Grew 2% in 1Q25 with 2 Positives Boosters: Apple Restocking in US, China Subsidies
- 1Q15 Smartphone units up 1.5-3% YoY but given accelerated imports to US and Chinese consumer subsidies, end-demand was probably flat YoY. TSMC 1Q25 revenues suggest that Smartphone chips declined YoY.
- We should expect a correction in 2H25 and overall flat 2025 YoY.
- The only positive is that chips are getting bigger (AI cores) and more expensive (3nm) and hence positive to Mediatek and Qualcomm, but not to phone Brands Apple included.
Elevarm Nets US$4.25M to Boost Smallholder Horticulture Farmers with AI | E27
- Elevarm, an Indonesian agritech startup that aims to enhance the yield and income of smallholder horticulture farmers throughout Indonesia, has raised US$4.25 million in pre-Series A financing led by Intudo.
- Existing investors Insignia Ventures Partners and 500 Global participated.
- Founded in 2022, Elevarm specialises in horticulture production and the provision of “high-quality” agricultural inputs, including superior seeds, bio-based fertilisers, and environmentally friendly pest control solutions.
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