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mhdousa

By mhdousa
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Spekulatius Grand Master

Spekulatius

Posted
Posted (edited)

Recenr additions to my Japan basket are Elan 6099 and Fuso Chemical  4368.

 

As I mentioned before, I don’t do net nets in Japan, I buy stocks more based on a Greenblatt screen (decent / higher ROE, low EV/EBIT and organic growth). I want to see some revenue growth will all my stocks to avoid value traps and holding more for the longer term.

 

Elan does supply nursing homes and hospitals with uniforms and consumables. I found it when looking again and VSTS and UNFI and while a bit different, Elan is actually a better business, I think.

 

It was mentioned a while ago in one. Of these Japan focused blogs. (Forgot which one and I put it on my watch list as it was too expensive back then, but now came to a reasonable valuation).

 

Fuso Chemical was mentioned in another thread ad an example for the semiconductor supply chain. They do ultrapure chemical  for the food industry etc traditionally but started to supply semiconductor with colloidal silica and other substances. Apparently they supply TSMC and others and have a very strong market position for these chemicals, that are used for polishing wafers and are tuned for the process nodes. So it seems like a hide  

champion sort of business that scales with wafer throughout is available at very sensitive valuations.

 

My knowledge of these business is only an inch deep, I evaluate it based on how I perceive the business, the LT track record and how management presents itself to investors. I buy a basket of these stocks and just try to leave them alone.

 

Other buys are 6723 (Renesas - semiconductors) 

Edited by Spekulatius
  • 1 month later...
Spekulatius Grand Master

Spekulatius

Posted
Posted

4368 FUSO chemical numbers look pretty good to me:

https://fusokk.co.jp/eng/wp/wp-content/themes/fuso/images/ir/summary_of_consolidated_financial_results_250207.pdf
 

They made already 260 Yen/share in 9 month, but kept their forecast for annual earnings at 259Yen.😂.

 

As I mentioned before, they seem to have a lock on high purity polishing material ingredients for semiconductor manufacturing for nm scale nodes.

 

I think I am buying motor of this bugger if the stock doesn’t move.

Spekulatius Grand Master

Spekulatius

Posted
Posted

Another one I own that reported today AD Holon 7745:

https://andholon.com/wp-content/uploads/2025/02/holdings_tanshin_20250207_en.pdf
 

There is a VIC thesis on that one and it made a nice run after it posted and then came all the way back. The business while underperforming some expectations has performed  quite well in absolute terms. The semiconductor growth segment (e- beam metrology for litho masks ) has very good profit margins, exceeding 30%.


The stock trades at 9x earnings.

 

jefke Enthusiast

jefke

Posted
Posted (edited)

Saw this one pop up on twitter: Broadleaf $3673

 

https://x.com/alexeliasson/status/1890801339971563531

 

"Market leading software provider to the Japanese automotive aftermarket. Full focus on transition to SaaS since 2022, taking a big up front hit."

 

Everything seems to be on track and anything in the neighbourhood of their "2028 plan" is a homerun. (That said, these plans are not guidance!)

 

Gj1zizcasAAMH09.jpg.e94c4732a7c1769683c8812b0026909d.jpg

 

 

Gj12oEpbsAEzuzD.png.3b3cc973788a7af88d20880d5ff39dde.png

 

Edited by jefke
Spekulatius Grand Master

Spekulatius

Posted
Posted (edited)

@jefke $3673 looks interesting. Looks like they went cold Turkey with their transitioning to the SAAS model. if a company does that there is a huge hit to revenues, earnings send cash flows.

I own $9928 (ERP/Tax software) which took a more gradual approach.

https://contents.xj-storage.jp/xcontents/AS08232/3ef18a9b/4d97/4e0f/b957/fab3450580ac/20241126112026890s.pdf

 

I added $3673 to my watch list. Thank you for posting.

Edited by Spekulatius
coffeecaninvestor Community Regular

coffeecaninvestor

Posted
Posted
On 11/8/2024 at 7:31 PM, Stuart D said:

Heard a pitch on Subaru. Trading below cash. Mid single digit PE. Shareholder returns 30-50% of income, split between dividends and buybacks.

I heard about it on just about all value investing podcasts or letters. Smead capital just put it in their latest letter. I am always skeptical about the opportunities with the most consensus that are constantly touted.  

Spekulatius Grand Master

Spekulatius

Posted
Posted
1 hour ago, Dinar said:

@Spekulatiushttps://fusokk.co.jp/eng/wp/wp-content/themes/fuso/images/ir/fusovision2025.pdf

 

Spek, when they talk in this presentation about FY 2025, do they actually mean FY 2025 or calendar 2025?  Thank you.  The company raised guidance in that presentation to JPY 85bn in revenues and 19bn JPY in operating income, which is 18% higher than their today's forecast for FY 2025?

My understanding is that it’s the current year which does not match the calendar year.

Yes, the earning releases of Japanese companies constantly confuse me on this matter as well.

  • 2 months later...
Spekulatius Grand Master

Spekulatius

Posted
Posted (edited)

One of my Holdings A&D Holon 7745 just announced results and they are pretty good:

https://andholon.com/wp-content/uploads/2025/05/holdings_tanshin_20250513_en.pdf
 

Their semiconductor business is very profitable (e- beam mask inspection systems ) and the worst isn’t bad either. trades at 1.2x book and ~8x earnings while growing. Their financials have improved a lot the last few years so they can and should buy back stock, imo. They are raising dividend for now.

 

Fr disclosure, I sold 4369 Furo because I was disappointed by the forecast for 2025. The numbers for 2024 were pretty good and exceeded the forecast a bit, so maybe they are lowballing. In any case, I take my moderate win here.

Edited by Spekulatius
Spekulatius Grand Master

Spekulatius

Posted
Posted

I put some $5233 Taiheiyo Cement in my Japan basket to replace $CX which I sold. 3rd Avenue Value fund seem to like it too and they mention it in their last investor letter. It checks quite a few boxes for me.

Marco Van Basten Experienced

Marco Van Basten

Posted
Posted
34 minutes ago, Spekulatius said:

I put some $5233 Taiheiyo Cement in my Japan basket to replace $CX which I sold. 3rd Avenue Value fund seem to like it too and they mention it in their last investor letter. It checks quite a few boxes for me.

Do you have a quick thesis that you can share?  Where do you get their annual reports in English?  The website only seems to have English annuals through FY 2019.  Thank you.

Spekulatius Grand Master

Spekulatius

Posted
Posted
On 5/20/2025 at 10:45 AM, Marco Van Basten said:

Do you have a quick thesis that you can share?  Where do you get their annual reports in English?  The website only seems to have English annuals through FY 2019.  Thank you.

It’s cheap but improving. Share buybacks, and rising dividends and a stated goal to get to P/B>1. There seems to be an activist too. Cement and aggregates are a good business and they make their money in the US and elsewhere. Their Japan business is money losing and they want to rationalize it such that it gets to 10% margins. Many ways to win.

Dalal.Holdings Grand Master

Dalal.Holdings

Posted
Posted (edited)
16 hours ago, Spekulatius said:

What is the catalyst? The Denso business seems very low margin and I am not sure it creates value.

 

The catalyst is already here: for the current fiscal year which ends in about 9 days, they have been raising their forecasts since Denso, now forecasting op profit of 2.1B yen/1.6B net profit (so about 200 JPY per share or P/E of 6). Most recent report shows Op Profit for the 9 months in FY 25 up 23% Y/Y which I attribute to denso. They have taken on debt to fund Denso so it is a levered play. They are forecasting 3B yen in operating profit by FY 2027 (which starts in about 1 year) due to Denso and from what I've seen, they've undershot with guidance.

 

They have JP auto industry exposure which I'm not crazy about, but the company has downside protection as it's a cheap net-net (below 75% of NCAV) that hasn't lost money in > 10 years (last brief loss in 2012) with significant cash on the B/S (over 3.6B Yen) albeit levered to fund Denso working capital. So, asymmetric with Denso creating room for large potential upside. It may not be an incredible business, but show me one trading this cheap that is. 

 

They just raised the dividend 20% which is another good sign (now yields over 5%). 

 

Edited by Dalal.Holdings
  • 3 weeks later...

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