In today’s briefing:
- Lawson: Fuelled up and Ready To Go
- Japan’s Governance: Komatsu (6301) ESG Presentation
- Takeda: Excessive Reaction to Recent Setback in Trials; Drop in Share Price Offer Attractive Entry
- Nippon Building Fund Placement – Weak Sentiment, However, Past Deals Have Performed Well
Lawson: Fuelled up and Ready To Go
- Lawson Inc (2651 JP) released rather disappointing 3QFY22 results last week with revenue and OP falling short of consensus by 4.5% and 22.2% respectively.
- Lower than expected profitability is driven by Lawson’s heavy upfront investments on future growth.
- With consensus unjustly penalising Lawson for growth investments, we think that there’s around ¥10.0bn upside to FY+2 consensus OP of Lawson.
Japan’s Governance: Komatsu (6301) ESG Presentation
- Komatsu’s “Business and ESG Presentation” provided us with an opportunity to confirm our leading technology and global business development.
- Komatsu’s advantage in the electrification of construction machinery will increase because of the high technological barriers for large machines with high profit margins.
- Komatsu’s corporate governance is generally higher than Universe’s in each of the criteria, but there are still some major challenges to be addressed.
Takeda: Excessive Reaction to Recent Setback in Trials; Drop in Share Price Offer Attractive Entry
- Takeda is currently trading at JPY3,175 per share, slightly above its all-time low of JPY3,105 per share. Shares are currently at a 27% discount to its peak in March 2021.
- The company has been divesting its non-core assets and reorganising its business around five core areas: GI, Rare Diseases, Plasma-Derived Therapies, Oncology, Neurosciences and Others.
- Takeda’s share price started plunging after the suspension of a phase 2 study of TAK-994 in October 2021 following the emergence of a safety signal.
Nippon Building Fund Placement – Weak Sentiment, However, Past Deals Have Performed Well
- Nippon Building Fund (8951 JP) is looking to raise around US$260m in its Primary Offering, to fund the acquisition of two properties.
- Target acquisitions are expected to be accretive however, the deal comes amidst weaker sector sentiment and analysts have grown more pessimistic on the REIT’s unit price.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Before it’s here, it’s on Smartkarma
