In today’s briefing:
- Toyo Cancels Poison Pill At Last Minute – Range to the Upside
- Uniden (6815) MBO – Cornwall Tests Market Norms By Launching a Low-Premium MBO
- Fast Retailing: A Breakdown Overdue
- Tokyo Electron (8035): Semiconductor Supply Chain at Risk of a Downturn
- The Declining Birthrate Makes Us Think About Japan’s Tendency to Postpone Problems
Toyo Cancels Poison Pill At Last Minute – Range to the Upside
- On 24 May, Toyo Construction (1890 JP) (TC) came out fighting against Yamauchi No.10 Family Office (YFO), presenting a poison pill and accusing YFO of “extreme dishonesty” despite standstill agreement.
- YFO presented hundreds of pages of defence, TC continued to accuse the YFO co-CIO and others of wrongdoing. To me, TC was clearly acting in bad faith.
- After ISS and later Glass Lewis came out against TC’s proposal, YFO continued to ask for the PP to be pulled, TC has finally relented. Now we wait some more.
Uniden (6815) MBO – Cornwall Tests Market Norms By Launching a Low-Premium MBO
- Uniden Holdings (6815 JP) is a ubiquitous manufacturer in its niche field of CBs, scanners, radar detectors, and marine radios. It used to be famous for cordless phones.
- That was then. Manufacturing revenues dropped 90% in 20yrs, there were some weird related party transactions, an accounting scandal, and now the company is fixing itself.
- And now value fund Cornwall Capital has launched an MBO at a [checks notes] 2.5% premium to last trade. This is going to be interesting.
Fast Retailing: A Breakdown Overdue
- Fast Retailing (9983 JP)’s share price continues to hold at the post 2QFY22 level despite clear signs of weakness in many of its growth markets.
- Even though markets have partially priced in the losing competitiveness in the Chinese market, it still believes Fast Retailing can offset that with growth from North America and Europe businesses.
- As North America and Europe expose their true colours in the next quarterly results due mid-next month, we expect a much-needed correction to Fast Retailing’s share price.
Tokyo Electron (8035): Semiconductor Supply Chain at Risk of a Downturn
- Nanya Technology has warned of a downturn that could last to the end of the year. This follows reports of procurement delays in response to excess inventory at Samsung.
- Inflation, the Fed’s attempt to kill it with higher interest rates, and the growing risk of recession now threaten not only Tokyo Electron but the entire semiconductor supply chain.
- Record capital spending plans should be fully discounted. Potential delays and cutbacks now put a burden of uncertainty on the sector.
The Declining Birthrate Makes Us Think About Japan’s Tendency to Postpone Problems
- I would like to discuss this issue because demographics is a very important factor for investment, regardless of whether the issue is directly related to ESG or not.
- The government has avoided discussing this issue. The bill for years of neglect in creating environment in which people can safely give birth and raise children is already becoming apparent.
- This is the same idea that Japanese management should seriously discuss with investors their vision for future growth, which means that both the government and companies face the same issues.
Before it’s here, it’s on Smartkarma
