In today’s briefing:
- Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
- Square Enix – Bounce Suggests Market Was Far Too Pessimistic
- Daifuku – Just Too Pricey
- Yamaha Motor – Struggling But Still Too Cheap
- Familymart to Double Space for Hit Clothing Range
- Medipal Holdings (7459 JP): Disappointing FY23 Guidance and Challenging Business Environment
Yamauchi No.10 Announces Its Offer (If Toyo Accepts)
- Yamauchi No.10 Family Office and Toyo Construction (1890 JP) have been going back and forth in the last few weeks, with TC trying to figure out if it accepts YFO.
- The Infroneer Tender Offer ends today, and with that – perhaps coincidental timing and perhaps not – YFO has formally announced an intention to launch a Tender Offer.
- That puts the ball back in Toyo Construction’s court. The deal would be at ¥1,000/share and would launch in late June… if TC is ready and willing.
Square Enix – Bounce Suggests Market Was Far Too Pessimistic
- Square Enix results were mildly above consensus (by 2.4% at the revenue line and 3.4% at the OP line).
- The company did not provide guidance on account of the pending transfer of its overseas development studios.
- However, we expect the sale to lift a significant burden from the bottom line enabling significant YoY OP growth.
Daifuku – Just Too Pricey
- Daifuku’s 4QFY22 was strong with revenue of ¥143bn (+3.8% vs. consensus) and OP of ¥17.3bn (+8.2% vs. consensus).
- Guidance was relatively strong at the top line, 1.1% above but margin assumptions were far too conservative resulting in a 4.1% miss vs. consensus.
- One may think that creates upside potential but guidance for 2H to grow vs. 1H is optimistic and valuations are too stretched to withstand a deceleration in earnings momentum.
Yamaha Motor – Struggling But Still Too Cheap
- Yamaha’s 1QFY22 was weak with revenue of ¥482bn (-1.5% vs. consensus), and OP of ¥40.1bn (-17.3% vs. consensus).
- The company’s FY22 guidance remained unchanged projecting ¥2,000bn in revenue (-2.0% vs. consensus) and OP guidance of ¥190bn (-4.5% vs. consensus).
- Beating guidance significantly will now be difficult without price hikes but valuations are too cheap to ignore.
Familymart to Double Space for Hit Clothing Range
- Convenience stores in Japan aren’t known for their fashion prowess although most sell the odd sock and underwear.
- FamilyMart Co Ltd (8028 JP) sees an opportunity to both expand sales categories and increase margins with higher value fashion basics supplied by its new parent Itochu Corp (8001 JP).
- Itochu is a leading fashion supplier and has created a hit product range for Familymart as well as another in cosmetics.
Medipal Holdings (7459 JP): Disappointing FY23 Guidance and Challenging Business Environment
- Medipal Holdings (7459 JP) reported strong revenue growth in pharmaceutical wholesale business, while its cosmetics distribution business reported lower-than-expected revenue in FY22. FY23 operating profit target was set below consensus.
- Lower demand for hygiene-related products in domestic market and lesser foreign tourists arrival in Japan are expected to negatively impact Medipal’s cosmetics distribution business.
- NHI drug price revisions are the biggest challenge in pharmaceutical wholesale business. Medipal’s largest revenue contributing drug, Takecab saw a 15.8% price reduction effective April 1.
Before it’s here, it’s on Smartkarma
