APAC Wrap: 25 March 2026
Innotech sells its HQ; PCBs; Nanya Tech
New ATH for our largest position in Japan now.
We also had our day trip to Yokohama pay off:
Innotech Corporation: Sale of HQ announced
Innotech Corporation is slightly underwater from when we wrote it up on 25 February. We took a basket sized position after reporting on the company’s HQ, one of the only small positions we kept going into the Iran war.
However, today the company announced the foreshadowed sale and leaseback of its HQ is going ahead.
As a consequence, this 35 billion yen company will recognize a 6.3 billion yen gain (being the sale price less book value and transaction costs).
The company announced a small 1.95% special dividend but we think the hope is that:
a bigger special dividend will be coming in the next financial year (ending 31 March 2027), when the bulk of the gain will be recognised.
the company will increase its buyback, currently sized at 3% of the company.
The amount of cash coming in the door is of course much larger than 6.3 billion yen, so we are looking forward to seeing where this goes.
Broadcom flags supply constraints, including lasers and optical transceiver PCBs (Reuters)
Broadcom quoted by today about the tight supply in PCBs and the emergence of LTAs in this market:
"Even though there are multiple suppliers in the industry today ... there is definitely a supply constraint in the laser space,” he said, adding that printed circuit boards had also emerged as an "unexpected" bottleneck.
He cited PCBs used in optical transceivers, saying lead times have stretched from about six weeks to six months.
Both Taiwanese and Chinese PCB suppliers are facing capacity limits, contributing to the delays, Ramachandran said, without naming the suppliers.
He said that he is not overly concerned about the industry as new entrants and capacity expansion are expected to ease supply constraints over time.
Many customers are now entering long-term agreements with suppliers to secure capacity commitments for as long as three to four years, he added.
Zephyr likes FIC Global for optical transceiver PCBs:
Echoed by Serenity:
Zhen Ding Tech looked the most interesting when I was looking into Taiwan a few days ago. This table is from GS:
A small account on X has been pitching a US$4B Japanese PCB maker that will apparently double FY25 operating income by FY28. The tweet has 55 views and the stock is up ~20% since: