As a long-term investor and avid fan of Japanese media, I have been following Tohokushinsha for decades. I remember watching their early dubbing work in the 1970s and 80s, and was thrilled when they co-produced Sofia Coppola’s “Lost in Translation” – a movie that truly captured the essence of Japan for a global audience.
I’m an admirer of 3D Investment Partners based in Singapore, and they recently announced on Thursday their intention to privatize Tohokushinsha, a renowned Japanese film and TV distribution company. According to their statement, the deal is valued at a impressive $575 million.
Established in 1961, Tohokushinsha initially functioned as a dubbing company. Over the years, it broadened its horizons to encompass various other businesses such as film and video distribution, television production, and management of ten satellite TV channels. The company has collaborated on notable projects including Sofia Coppola’s debut movie “Lost in Translation” (2003) and the 1980s adaptation of James Clavell’s “Shogun” for TV.
3D Investment currently holds approximately 18% of the outstanding shares in the publicly traded company, Tohokushinsha. They have announced their intent to purchase the remaining stock, offering a price between JPY600 and JPY650 per share.
If the proposed price is accepted at this level, it would mean a 15% increase in value for Tohokushinsha shares compared to their closing price during Wednesday’s stock market activity. The stock exchange halted trading on Thursday.
If 3D Investment’s proposal is to be approved, Tohokushinsha’s management must first agree to certain terms. One of these conditions being that their shares no longer meet the minimum free-float requirements for listing, and therefore may need to be delisted.
Based on my extensive experience in financial analysis and having closely followed Tohokushinsha’s financial reports for several years, I would say that the company’s financial performance for the year ending March 2024 was disappointing, to put it mildly. The sales figure of JPY52.8 billion represented a 5% decrease compared to the previous year, which is never a good sign. Moreover, the ordinary profits took a significant hit, plummeting by 54% to JPY2.21 billion.
As a movie enthusiast, I’ve come to learn that the decrease in subtitling revenue during mid-2023 was attributed to the Hollywood actors strike. Nevertheless, the profit margin for me, as an investor, saw a significant surge due to the successful sale of a supermarket business that I had previously managed.
In May, management shared expectations for the ongoing financial year (ending March 2025), estimating net sales of approximately JPY 46 billion, an ordinary profit of around JPY 2.71 billion, and a profit for the company’s owners amounting to JPY 5.1 billion. The projected basic earnings per share were set at JPY 113.
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2024-07-25 14:47