Daily BriefsJapan

Japan: MatsukiyoCocokara, PHC Holdings, Japan Post Holdings, Baycurrent Consulting, Shift Inc, KOMEDA Holdings Co Ltd, Koshidaka Holdings and more

In today’s briefing:

  • MatsuKiyoCocokara Merged – Interesting Implications Indeed
  • PHC Holdings IPO Trading – Needs to Start Acting like One Company to Move Higher
  • Japan Post Buy Support
  • Baycurrent Consulting: Strong Fundamentals; Up Almost 200% and Further Upside Likely
  • PHC Holdings IPO – First Day Trading
  • Shift 4Q: Growth Story Is Getting Stronger
  • Komeda Holdings (3543): Stable Profits Despite a Difficult Summer
  • Koshidaka Holdings (2157): Reopening Karaoke. Bullish Guidance Looks Positive

MatsuKiyoCocokara Merged – Interesting Implications Indeed

By Travis Lundy

Nearly 21 months after starting talks to merge when a rival had made a bid for Cocokara Fine (3098 JP), Cocokara and Matsumoto Kiyoshi Holdings (3088 JP) announced a merger in February 2021 which undervalued Cocokara, to the chagrin of my earlier ratio guesstimates and activist investors disappointed with how cheaply Matsumoto Kiyoshi acquired control. 

I discussed the merger in MatsukiyoCocokara & Co – The Merger and then MatsuKiyoCocokara Merger and Implied Forward Forecasts then the activist noise in Matsukiyo-Cocokara Situation Gets Its Activist Noise Started. The activist noise – as expected in this case – came to nothing, but the shares gained, lost ground, and have since regained some ground as the merger date came closer. The two companies merged and became Matsumotokiyoshi Holdings Co., Ltd. (3088 JP).

I was, at the time, quite bullish on the prospects for the combined entity. And there were interesting events to come, associated with the deal. The stock has done well-ish.

I think that is not the end of the story. There is more to come.

More below the fold. 


PHC Holdings IPO Trading – Needs to Start Acting like One Company to Move Higher

By Sumeet Singh

PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).

We have covered the various aspects of the deal in our earlier notes:

Japan Post Buy Support

By Thomas Schroeder

Japan Post exhibits pressure on tactical support with a bullish intermediate cycle low setting up. 2020 triple lows mark a macro cycle low. Buy a tactical pullback.

JP is biased to crack the 900 near term pivot support that will set up a terminate wave C low in the correction. Buy support lies at 850/20 given the supportive congestion zone outlined.

Intermediate rally target and bull/bear line is at 1,220.

RSI support break on the rising wedge leading price support pressure. Ideal buy zone at 30-20 to align with price.


Baycurrent Consulting: Strong Fundamentals; Up Almost 200% and Further Upside Likely

By Shifara Samsudeen, ACMA, CGMA

Baycurrent Consulting (6532 JP)  offers a range of consultancy services in Japan including development and formulation of business strategy, digital transformation, M&A and JV, improvement in operational capabilities and IT Services. The Covid-19 outbreak has accelerated the digital transformation in Japan which has led to increased requirements for consulting services in the country.

BayCurrent’s share price has rallied almost 200% over the last 12-months to JPY46,250 per share from JPY15,740 per share a year ago. In this insight, we examine the company’s business model, key drivers, outlook, financials and valuation.


PHC Holdings IPO – First Day Trading

By Mio Kato

After pricing at the low end, PHC Holdings has opened weak, down roughly 10% during most of its early morning trading. There are a variety of issues facing the company so the generally tepid reception is not a massive surprise but valuations are cheap enough that even using conservative assumptions, the downside looks limited.


Shift 4Q: Growth Story Is Getting Stronger

By Shifara Samsudeen, ACMA, CGMA

Shift Inc (3697 JP) reported its 4QFY08/2021 and full-year FY08/2021 results on Tuesday (12th October) which saw revenues growing 60.2% YoY to JPY46.0bn from JPY28.7bn in FY08/2020. The operating profit for the year grew 69.8% YoY to JPY4.0bn vs JPY2.4bn in the previous year. Both reported revenue and OP beat Shift’s guidance by 2.2% and 17.5% respectively while revenue and OP beat consensus estimates by 0.4% and 4.5% respectively.

The company’s share price rose 10.0% at the end of Wednesday’s close following the company’s strong FY08/2021 earnings.

We discuss the details below.


Komeda Holdings (3543): Stable Profits Despite a Difficult Summer

By Mita Securities

Company profile

Komeda HD, based in Aichi Prefecture, operates “Komeda’s Coffee” through franchise system nationwide. The company has 914 stores at the end of February 2021 and is the largest full service coffee shop operator in Japan. FY2/21 sales were 28.8bn yen.


Koshidaka Holdings (2157): Reopening Karaoke. Bullish Guidance Looks Positive

By Mita Securities

Company profile

Koshidaka HD is a major karaoke room operator that operates “Karaoke Manekineko” stores nationwide. The total number of stores as of the end of February 2021 was 546. In March 2020, it spun off the Curves business and is concentrating its management resources on the karaoke business.


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