IR & Research Intelligence, Sessa Investment Research

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IR & Research Intelligence

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Equity Bottom-Up

Carta Holdings, Inc. provides on-line information retrieval services on a contract or fee basis.

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Specific measures for structural reforms are being implemented one after another.</p></li><li><p>CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&amp;A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company's board of directors newly approved a resolution to call for voluntary retirement.</p></li><li><p>While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.</p></li></ul></div></div></div></div>

Specific measures for structural reforms are being implemented one after another.CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&amp;A expenses centered on fixed costs, the integration of four direct sales subsidiaries, and other streamlining measures leading up to the 2Q FY23/12 earnings announcement, and on September 5, 2023, the company's board of directors newly approved a resolution to call for voluntary retirement.While the macroeconomic downturn was particularly noticeable in the April-June 2023 earnings results, with advertising companies downwardly revising their forecasts one after another, no other company has implemented such drastic measures like CARTA Holdings has, and this move is worth highlighting for its future sharp recovery.

Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

D.Western Therapeutics Institute Inc. / Equity Bottom-Up

D.Western Therapeutics Institute Inc.(DWTI) is a biotechnology (bio-venture) company that focuses on development of new drugs. The Company's focus is on protein kinase inhibitors. DWTI discovers and develops several drugs, such as antiglaucoma, antihypertensive, neuroprotective, antithrombogenic, antiatherosclerosis and anticancer.

D.Western Therapeutics Institute Inc. (4576 JP)

<ul><li>Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs, 2) 2023 application, 2024 approval and 2025 launch of DW-1002 in Japan, 2023 application/approval/launch in China, as well as expedited development of combination formula MembraneBlue-DualR (DW-1002 + trypan blue) in the US [NEW], 3) 2023 approval and subsequent 2024 launch of DW-5LBT lidocaine patch for treatment of neuropathic pain in the US, and 4) clinical trials in 2024 in Japan and application for approval in 2025 of regenerative cell medicine DWR-2206 [NEW].</li><li>Coming into the 3Q, DWTI announced 2 updates not included in its “Business Plan and Growth Potential.”</li><li>On 7/13, DWTI announced the development plan for regenerative cell medicine DWR-2206, aiming to submit a notification of clinical trial at the end of 2023, start clinical trials in 2024, and submit application for approval (NDA) in 2025 (using the expedited conditional and term-limited approval system for regenerative therapeutics).</li></ul>

Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs, 2) 2023 application, 2024 approval and 2025 launch of DW-1002 in Japan, 2023 application/approval/launch in China, as well as expedited development of combination formula MembraneBlue-DualR (DW-1002 + trypan blue) in the US [NEW], 3) 2023 approval and subsequent 2024 launch of DW-5LBT lidocaine patch for treatment of neuropathic pain in the US, and 4) clinical trials in 2024 in Japan and application for approval in 2025 of regenerative cell medicine DWR-2206 [NEW].Coming into the 3Q, DWTI announced 2 updates not included in its “Business Plan and Growth Potential.”On 7/13, DWTI announced the development plan for regenerative cell medicine DWR-2206, aiming to submit a notification of clinical trial at the end of 2023, start clinical trials in 2024, and submit application for approval (NDA) in 2025 (using the expedited conditional and term-limited approval system for regenerative therapeutics).

2Q Follow-Up - D. Western Therapeutics Institute (DWTI) (4576 JP)

Japan System Techniques Co / Equity Bottom-Up

Japan System Techniques Co., Ltd. develops application software upon request for business, engineering, event, and Internet uses.  The Company also develops and sells packaged software.  Japan System Techniques manages and provides maintenance services for its clients' computer systems.

<ul><li>Japan System Techniques announced its 1Q results for FY24/3 after the close of the market on August 10 (Thursday).</li><li>Key figures on a consolidated basis ; operating profit fell 53.3%, to ¥122 mn on a 10.2% rise in sales, to ¥5,640 mn.</li><li>Ordinary profit fell 53.6%, to ¥134 mn, and net income attributable to the parent company fell 72.4%, to ¥61. </li></ul>

Japan System Techniques announced its 1Q results for FY24/3 after the close of the market on August 10 (Thursday).Key figures on a consolidated basis ; operating profit fell 53.3%, to ¥122 mn on a 10.2% rise in sales, to ¥5,640 mn.Ordinary profit fell 53.6%, to ¥134 mn, and net income attributable to the parent company fell 72.4%, to ¥61. 

1Q Follow-Up - Japan System Techniques (4323 JP)

SRG TAKAMIYA CO., LTD is a construction scaffolding leasing company.  The Company's product line includes scaffolding rental and planning for various construction projects.  SRG Takamiya also offers outsourcing services.

<ul><li>Takamiya announced its 1Q results for FY24/3 on August 4, after the close of trading.</li><li>Key figures on a consolidated basis were sales of ¥9,896 mn (+9.7% YoY), operating profit rose 125.5% YoY, to ¥409 mn, ordinary profit rose 41.0%YoY, to ¥615 mn, and quartery net profit rose 33.0%YoY, to ¥417 mn.</li><li>An overview by business segment is as follows</li></ul>

Takamiya announced its 1Q results for FY24/3 on August 4, after the close of trading.Key figures on a consolidated basis were sales of ¥9,896 mn (+9.7% YoY), operating profit rose 125.5% YoY, to ¥409 mn, ordinary profit rose 41.0%YoY, to ¥615 mn, and quartery net profit rose 33.0%YoY, to ¥417 mn.An overview by business segment is as follows

OHBA CO., LTD. is a civil engineering consultant company.  The Company's services include land and air surveying, designing of parks and roads, and development/redevelopment of urban land.

<div><div><div><div><ul><li>Since reporting its full-year results for FY23/5, OHBA shares have been rerated and its share price is up approximately 20% at the time of writing.</li><li>In its five-year medium-term management plan ending in FY28/5, the company has set ambitious earnings targets (sales CAGR of 5.0%, operating profit CAGR of 7.0%) and a policy committed to capital efficiency (ROE 12%, ROIC 12%).</li><li>In addition, the company has further strengthened its shareholder return policy (targeting a total return ratio of 60%), which has been one of the best among listed construction consulting companies, and this has likely driven the rerating to some extent.</li></ul></div></div></div></div>

Since reporting its full-year results for FY23/5, OHBA shares have been rerated and its share price is up approximately 20% at the time of writing.In its five-year medium-term management plan ending in FY28/5, the company has set ambitious earnings targets (sales CAGR of 5.0%, operating profit CAGR of 7.0%) and a policy committed to capital efficiency (ROE 12%, ROIC 12%).In addition, the company has further strengthened its shareholder return policy (targeting a total return ratio of 60%), which has been one of the best among listed construction consulting companies, and this has likely driven the rerating to some extent.

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Carta Holdings (3688 Jp) -Pushing Forward with Earnings Structure Improvements

CARTA Holdings had announced the withdrawal from unprofitable businesses (game and hometown tax payment businesses), a ¥1 bn reduction in SG&A...

Sessa Investment Research

2Q Follow-Up - D. Western Therapeutics Institute (DWTI) (4576 JP)

Flurry of pipeline activity continuing in the 3Q. Expedited development plans for DWR-2206, dual formula DW-1002 in the US, and commenced dosing of...

Sessa Investment Research

1Q Follow-Up - Japan System Techniques (4323 JP)

Japan System Techniques announced its 1Q results for FY24/3 after the close of the market on August 10 (Thursday). Key figures on a consolidated...

Sessa Investment Research

1Q Follow-Up - Takamiya (2445 JP)

FY24/3 1Q results rocketed off to a good start with operating profit up 2.2x YoY. Full-year platform sales are expected to increase 156.3%

Sessa Investment Research

4Q Follow-Up - Ohba (9765 JP)

Continued growth and enhanced shareholder returns are driving progress in rerating. New Medium-Term Management Plan includes policy committed to...

Sessa Investment Research