Daily BriefsJapan

Japan: Japan Post Holdings, Taisho Pharmaceutical Holdin, Towa Corp and more

In today’s briefing:

  • Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan
  • Taisho Pharmaceutical (4581 JP): A Compelling Play on Japan’s Consumer Spending Recovery
  • TOWA (6315): Watch the Order Flow for an Entry Point

Last Week In Event SPACE: Woodside Petroleum, Brambles, Tabcorp, HKBN, Japan

By David Blennerhassett

  • The downside to Woodside Petroleum (WPL AU) remains, but the reasoned downside is smaller than it was before.
  • CVC walks, but it doesn’t stop Brambles Ltd (BXB AU) privatisation speculation. 
  • If Tabcorp and The Lottery Corp are seen as low volatility growth properties, then the stability of cashflow puts it into rarified air among “growth bias” which has gotten trashed. 

Taisho Pharmaceutical (4581 JP): A Compelling Play on Japan’s Consumer Spending Recovery

By Tina Banerjee

  • Taisho Pharmaceutical Holdin (4581 JP) is the leader in the Japanese OTC drug market. The company’s Lipovitan, Pabron and RiUP brands capture top market share in their respective categories.
  • With the re-opening of economy, increasing number of people are indulging in outdoor activities and consumer spending is recovering. These should boost Taisho’s OTC drug business.  
  • The company’s prescription pharmaceutical business is well-positioned for long-term growth, driven by strong performance of existing drugs and upcoming new product launch.

TOWA (6315): Watch the Order Flow for an Entry Point

By Scott Foster

  • Management is guiding for single-digit sales and profit growth in FY Mar-23, but new orders fell 39% from Q2 to Q4 of last fiscal year.
  • The Book-to-Bill Ratio fell from 1.66 in Q2 to 1.01 in 4Q, but quarterly orders and sales both remained far above the levels recorded in the three years to Sep-21.
  • Even if the company does not drop into the red as it did in previous cycles, the downside risk to profits could be 50%. 

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