In today’s briefing:
- Hitachi Finally Bailing on Hitachi Construction (6305); Too Early To Buy
- HCM – Hitachi Partial Stake Sale to Itochu
- Toyota – Records Across the Board
- Mitsui Fudosan Logistics Park Placement – Unit Price Has Historically Outperformed Peers
- Mani Inc (7730 JP): No Immediate Respite Seen
- S Foods (2292): Remarkable Positive Surprises. Significant Upward Revision of Guidance
- Koshidaka Holdings (2157): 1Q Sales and OP Beat the Company Target
- Ichigo (2337): Hopes Rise for Signs of Hotel Market Recovery
- Monogatari Corporation (3097): Japanese BBQ Extremely Popular at Year-End
Hitachi Finally Bailing on Hitachi Construction (6305); Too Early To Buy
- An NHK report today post-close said Hitachi Ltd (6501 JP) would sell “about half” its stake in sub Hitachi Construction Machinery (6305 JP) to Itochu and Japan Industrial Partners.
- That is quite similar to the announcement 15 months ago in the Nikkei which precipitated a large drop. While unconfirmed, it smells like there is fire behind the smoke.
- The big question is What Next? and What Impact for shareholders? That’s a tough couple of questions.
HCM – Hitachi Partial Stake Sale to Itochu
- NHK reports that Hitachi will be selling roughly half of its 51% stake in HCM to Itochu and Japan Industrial Partners.
- HCM has outperformed Komatsu over the last year and it is possible that some investors were expecting a buyout.
- If so, and if there is a negative reaction to this news we would be looking to buy.
Toyota – Records Across the Board
- Toyota is up 52% in just over a year, posting impressive performance for a company of its size.
- Its displacement of GM as the number one automaker in the US has made headlines but results in China and Europe have also been impressive.
- Hybrid penetration is now also over 25% in all major regions and we expect this to continue to be a driver.
Mitsui Fudosan Logistics Park Placement – Unit Price Has Historically Outperformed Peers
- Mitsui Fudosan Logistics Park Inc (3471 JP) is looking to raise around US$170m in its Primary Offering, to fund its acquisition of three properties and pay down its borrowings.
- The anticipated acquisitions, post-completion, will be accretive to both operating income and DPU, even after factoring in the dilution.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Mani Inc (7730 JP): No Immediate Respite Seen
- Mani Inc (7730 JP) offers medical devices, which are mainly used in the elective procedures including cataract surgery and dental procedures.
- In FY21, the company missed its guidance for both revenue and operating income by 2% and 5%, respectively, due to higher-than-expected impact of the COVID-19.
- With the rising cases of highly infectious Omicron variant of the COVID-19 in major operating regions, the company is expected to miss or lower its FY22 guidance.
S Foods (2292): Remarkable Positive Surprises. Significant Upward Revision of Guidance
- Record 1-3Q OP +41% YoY; Significant upward revision of full-year guidance
- Demand for restaurants during the year-end and New Year holidays appears to have been strong, and we assume that meat wholesaling to restaurants was generally robust
- With the recent announcement of price hikes by a number of major competitors, it is becoming easier for the company to expect an easing of the competitive environment
Koshidaka Holdings (2157): 1Q Sales and OP Beat the Company Target
- 1Q FY8/22: Recovery in karaoke demand exceeded the company assumptions
- The total number of stores in the karaoke business segment (domestic and overseas consolidated) was 581 at the end of 1Q (+18 stores from 563 at end-FY8/21).
- We estimate that sales at karaoke rooms continued to recover in December, in line with the increase in foot traffic.
Ichigo (2337): Hopes Rise for Signs of Hotel Market Recovery
- Ichigo shows confidence in achieving full-year guidance. Signs of hotel market recovery
- On November 12, 2021, the company announced that the delivery date for the sale of 16 residential properties had been changed from November 12, 2021 to the end of January 2022
- The company did not announce any share buybacks at this time.
Monogatari Corporation (3097): Japanese BBQ Extremely Popular at Year-End
- December SSS 107.0% vs. 2019, of which Yakiniku division 117.8%
- The number of domestic directly-owned stores at end of December was 352 (+3 MoM, +12 vs. end-FY6/21)
- Many of the company’s restaurant formats use an all-you-can-eat system with a time limit. In addition, they are not suitable for takeout or delivery
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