In today’s briefing:
- Epson (6724) – A Big Buyback Amid Benign Backdrop
- Screen Holdings (7735 JP): Good Results, Optimistic Guidance, Great Uncertainty
- Safie – Cost Overshoot Could Drive This Lower But…
- Sumitomo Dainippon Pharma Co (4506 JP): New Launches Ensure Post-Latuda Growth Trajectory
- About an Article on the Skills Matrix
- Japan Tourism | A Journey of a Thousand Miles Begins with a Single Step
Epson (6724) – A Big Buyback Amid Benign Backdrop
- Seiko Epson (6724 JP) announces the first special div for the 2023 Nikkei 225 dividend futures.
- And it also announces a VERY big buyback. The headlines say 9.5%. The reality is more like 4.0-4.4%, but that is still going to be 15-20% of Real World Float.
- Given mildly positive backdrop, a net cash position, low multiples, and lack of major Real World Float active investor, this could go up.
Screen Holdings (7735 JP): Good Results, Optimistic Guidance, Great Uncertainty
- Screen Holdings beat FY Mar-22 profit guidance by a wide margin. This year, management is aiming for 12% sales growth and a 22% increase in operating profit.
- New SPE orders have exceeded sales for seven straight quarters and the backlog is at a record high. But 1H of FY Mar-23 is expected to be weak.
- A new factory is scheduled to come on line in 4Q, raising total SPE capacity by 20%. The risk is that this will coincide with a downturn in demand.
Safie – Cost Overshoot Could Drive This Lower But…
- Safie’s 1Q results disappointed the market as revenue came in 5% lower than the average of two consensus estimates and R&D expense surged.
- Nevertheless, 1Q should be the worst quarter of the year as downside from the specific distributor issue is now quantifiable and the stock is now on 2.5x 2022 EV/Sales.
- Valuations are already highly compelling and if the sentiment driven sell off continues we would be looking for 5-10x returns over a 3-4 year timeframe.
Sumitomo Dainippon Pharma Co (4506 JP): New Launches Ensure Post-Latuda Growth Trajectory
- Sumitomo Dainippon Pharma Co (4506 JP)‘s flagship drug Latuda will loss patent protection in the U.S. in 2023. Latuda is already seeing revenue erosion.
- Sumitomo is expected to reap the benefit of new products launched in the U.S. market in 2020 and 2021. These are expected to gradually become next growth drivers.
- The company has a rich pipeline and targets to launch at least two new drugs in the U.S. in next two years.
About an Article on the Skills Matrix
- I would like to discuss the Nikkei article, “An increasing number of companies are disclosing their skill matrices, but few explain why those skills are needed by the company.”
- The reason for the rapid increase in the number of companies disclosing skill matrices over the last year is the addition of Supplemental Principle 4-11-IV in revised Corporate Governance Code.
- METI and other in hiring of independent directors, there is a tendency for boards of directors to be composed of individuals who are aligned with the wishes of the president.
Japan Tourism | A Journey of a Thousand Miles Begins with a Single Step
- Ancient proverbs dictate the pace of policy change in Japan. But, the first step has been taken
- Investors should be watching for further relaxation of inbound tourist restrictions, particularly on the Chinese market
- Out top pick on this thematic is MatsukiyoCocokara (3088 JP) . Tourists used to account for over 10% of sales, but there is more…
Before it’s here, it’s on Smartkarma
