Daily BriefsJapan

Japan: Shinsei Bank, Toshiba Corp, Dowa Holdings, freee, Skylark Co Ltd and more

In today’s briefing:

  • SBI and Shinsei Responses to the DICJ and an Activist Joins the Party
  • Toshiba Strategic Review – Bold and Unexciting, Promising But Not.. Doesn’t Solve the Problem
  • Dowa Holdings – Firing on All Cylinders
  • Freee: Ninja Sign Helps Strong Growth in Paying Users; Current Multiples Offer Good Entry
  • Japan’s Governance: Equity Finance Update: Skylark (3197)

SBI and Shinsei Responses to the DICJ and an Activist Joins the Party

By Travis Lundy

  • The Deposit Insurance Corporation of Japan, which owns 23.3% of voting rights in Shinsei Bank (8303 JP) asked both SBI and Shinsei to provide answers to questions by 12 November
  • They both did on Friday and the answers were curiously lacklustre. If one of the two ‘won’ it may have been SBI. But we don’t know what DICJ will do.
  • In other news, Shinsei reported results and a famous activist announced a 5+% stake.

Toshiba Strategic Review – Bold and Unexciting, Promising But Not.. Doesn’t Solve the Problem

By Travis Lundy

  • On Friday 12 November, Toshiba Corp (6502 JP) released earnings (results, presentation), a slight forecast revision to full year sales (upward), and its long-awaited Strategic Plan (Process, Plan)
  • The Strategic Review Committee surveyed and met with investors, potential acquirers, and consultants, and devised a plan (previewed by the FT) to split into three companies by March 2024.
  • This is at a time bold, yet unexciting. Promising, yet somehow not. They’ve been well-advised in some areas, less well-advised in others. It’s complicated. AND there is a buyback.

Dowa Holdings – Firing on All Cylinders

By Mio Kato

  • Dowa Holdings revised up its guidance from ¥58bn to ¥61bn at the OP level.
  • Based on historical trends if it can sustain that level of profit generation upside of 60% or more is plausible.
  • While there is risk of a YoY decline we actually believe that recovering auto production could drive a YoY rise.

Freee: Ninja Sign Helps Strong Growth in Paying Users; Current Multiples Offer Good Entry

By Shifara Samsudeen, ACMA, CGMA

  • freee (4478 JP) reported its 1QFY06/2022 results on Friday (12th November) which saw total revenue grow 52.5% YoY to JPY3.39bn (vs JPY3.5bn consensus).
  • The adjusted operating losses for the quarter dropped to 12.6% of revenues (reported operating losses of JPY501.2m vs JPY438.9m consensus) during the period.
  • The adjusted operating losses for the quarter dropped to 12.6% of revenues (reported operating losses of JPY501.2m vs JPY438.9m consensus) during the period.

Japan’s Governance: Equity Finance Update: Skylark (3197)

By Aki Matsumoto

  • In June, Skylark (3197) raised 42.8 billion yen through a new share issue. I would like to consider our company since then.
  • I believe that whether or not a restaurant is chosen by consumers when they enjoy eating out has something to do with the recovery in same-store sales.
  • I would like to see the effects of the equity finance on whether same-store sales will recover successfully and whether profit structure through the use of digital technology can improve.

Before it’s here, it’s on Smartkarma