In today’s briefing:
- NTT and NTT Data Reshuffle the Deckchairs and Everyone “Wins”
- Appier – Explosive US Growth
- NTT (Buy) – An Exciting Day for Data but Not Much Has Changed
- Denso – Strong Overshoot Potential And Only Modest Execution Risk
- Canon (7751) – Buyback Looks Small But Shareholder Structure Matters
- Kura Sushi (2695): Detective Conan in April, Dragon Ball in May
- Skylark Holdings (3197): April Sales on an Improving Trend; Over 1,000 Robots in Operation
- Zenkoku Hosho (7164): FY3/22 OP Achieved Guidance, but Not Strong Enough; Credit Costs Remain Low
NTT and NTT Data Reshuffle the Deckchairs and Everyone “Wins”
- NTT (Nippon Telegraph & Telephone) (9432 JP) and NTT Data Corp (9613 JP) this morning announced a 1pm joint presser. Imaginations ran wild and NTT went up 12+%.
- The reality is more subdued (as it should have been for a during-market-hours-presser) and it involves a restructuring of a small NTT subsidiary which happens to own NTT Data shares.
- But it is still positive. It is something of a win-win for both parties.
Appier – Explosive US Growth
- When we reviewed Appier’s 2021 results we rambled on about the US for about half of our note discussing explosive growth potential.
- We said that while Appier touted a >50% QoQ growth rate in the US we suspected it was actually closer to 100%.
- In 1Q it accelerated to >180% QoQ growth prompting the sell side to go all surprised Pikachu.
NTT (Buy) – An Exciting Day for Data but Not Much Has Changed
- NTT and NTT Data will reorganize overseas assets into a new operating company run through NTT Data
- The transaction results in little change for consolidated results at NTT Group although segment reporting may change and it will buy up to ¥100bn more of NTT Data
- Restructuring could help unlock the potential of Dimension Data which has been a consistent laggard since NTT acquired it in FY11
Denso – Strong Overshoot Potential And Only Modest Execution Risk
- Denso 4QFY22 revenue was strong at ¥1,506bn (+4.8% vs. consensus) but increases in raw material prices resulted in OP of just ¥85bn (-31.8% vs. consensus).
- The company’s FY23 guidance was conservative projecting just ¥6,350bn (+2.2% vs. consensus at +15.1% YoY) but OP guidance was for ¥560bn (+5.3% vs. consensus).
- We expect volume to grow further and the depreciating Yen should favourably impact ASPs next year.
Canon (7751) – Buyback Looks Small But Shareholder Structure Matters
- Canon Inc (7751 JP) on Monday announced a share buyback programme.
- It isn’t very big. But it bears consideration because of other things going on.
- Shareholder structure is of much more importance than many investors appreciate. Here even more so.
Kura Sushi (2695): Detective Conan in April, Dragon Ball in May
- Same-store sales were in line with the pre-pandemic levels, and our impression is neutral.
- Same-store sales of other revolving sushi formats in April (compared to April 2021 and April 2019) were 105.3% and 104.2% for Sushiro (Food & Life Companies), 108.4% and 94.5% for Genki Sushi, and 103.7% and 87.1% for Kappa Sushi, respectively.
- The number of stores at the end of April was 512 in Japan (+2MoM), 37 in the U.S. (+/-0 MoM), and 45 in Taiwan (+/-0 MoM)
Skylark Holdings (3197): April Sales on an Improving Trend; Over 1,000 Robots in Operation
- Skylark Holdings (3197, the company) disclosed monthly data for April (on a preliminary basis). All of its restaurants resumed normal operations on March 22
- April same-store sales were significantly higher than in April 2021. Although the sales are still weaker than the pre-pandemic levels, the situation has been improving.
- Same-store sales were 110.6% vs. April 2021 (99.0% for March), 182.0% vs. April 2020 (92.8% for March), and 77.4% vs. April 2019 (71.0% for March)
Zenkoku Hosho (7164): FY3/22 OP Achieved Guidance, but Not Strong Enough; Credit Costs Remain Low
- Compared to our forecast, operating revenue and the number of new guarantees executed were lower. On the other hand, credit-related expenses were lower than our assumption
- The company’s OP guidance for FY3/23 is 40.970bn yen (+3.8% YoY), more conservative than our forecast of 43.137bn yen and the QUICK consensus forecast of 43.653bn yen
- The company disclosed that it purchased two RMBS, etc. in FY3/22. The total amount of the underlying assets was 60bn yen.
Before it’s here, it’s on Smartkarma