Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TOYOTA INDUSTRIES CORPORATION, a member of the Toyota Motor Group, assembles motor vehicles and manufactures automotive parts such as engines and air conditioner compressors.  The Company also produces industrial equipment and textile machinery as well as electronic devices such as computer modems and power inverters.

<ul>
<li>At ¥17,340/share, <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> is cheap. Corporate governance supporting this deal is shocking. In <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a>'s words: "Stay long. Buy more. And make some noise."</li>
<li>Preceding my comments on Toyota are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>


At ¥17,340/share, Toyota Industries (6201 JP) is cheap. Corporate governance supporting this deal is shocking. In Travis Lundy's words: "Stay long. Buy more. And make some noise."
Preceding my comments on Toyota are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Don't Sell Toyota Inds (6201 JP) - Buy More

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Leading full-service brokerage firm in Vietnam. 

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Equity Bottom-Up

<ul><li>As ESL growth continues, restoring trust will be keyESL growth and easing governance risks</li><li>We raise our target price for SoluM to W22,000 (from W20,000), reflecting the company’s improving medium-term outlook</li><li>We expect a meaningful earnings ramp-up in the ESL business starting in 2026, while the valuation discount stemming from past governance issues is likely to fade gradually</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

As ESL growth continues, restoring trust will be keyESL growth and easing governance risksWe raise our target price for SoluM to W22,000 (from W20,000), reflecting the company’s improving medium-term outlookWe expect a meaningful earnings ramp-up in the ESL business starting in 2026, while the valuation discount stemming from past governance issues is likely to fade graduallyContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

SoluM (248070 KS/Buy)As ESL Growth Continues, Restoring Trust Will Be Key

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Digital Holdings, Inc. operates as an internet advertising agency. The Company provides internet advertising, digital marketing, and other related services for local small and medium-size enterprises. Digital Holdings also offers venture investment, information gathering, and digital shift support education services.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings (2433 JP)</a> increased its <a href="https://www.smartkarma.com/entities/digital-holdings-inc" target="_blank" data-smartkarma-citation="entities:1697:1" rel="noopener">Digital Holdings Inc (2389 JP)</a> tender offer price by 2.3% to JPY2,015, 7.1% below the last close and 15.3% below SilverCape’s JPY2,380 offer.</li>
<li>The lower limit has been reduced to a 24.67% ownership ratio. Hakuhodo's confidence in passing the EGM share consolidation vote relies on AGM voting trends and passive votes.</li>
<li>Hakuhodo’s acceptances as of 28 October exceed the lower limit. The revised Hakudodo offer will severely dent the chances of SilverCape’s offer.</li>
</ul>



Hakuhodo Dy Holdings (2433 JP) increased its Digital Holdings Inc (2389 JP) tender offer price by 2.3% to JPY2,015, 7.1% below the last close and 15.3% below SilverCape’s JPY2,380 offer.
The lower limit has been reduced to a 24.67% ownership ratio. Hakuhodo's confidence in passing the EGM share consolidation vote relies on AGM voting trends and passive votes.
Hakuhodo’s acceptances as of 28 October exceed the lower limit. The revised Hakudodo offer will severely dent the chances of SilverCape’s offer.


Digital Holdings (2389 JP): Hakuhodo Bumps and Lowers the Minimum Tendering Condition

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

<ul>
<li>Since TSE's request, many companies have introduced share buybacks as a measure, and as a result of investors demanding accountability for how these shares are used, share cancellations have increased.</li>
<li>Companies that frequently cancel treasury stock demonstrate superior capital profitability. Companies with high capital profitability also exhibit strong scores in growth strategy, cash holdings, dividend policy, and treasury stock cancellation.</li>
<li>More companies are expected to consider cash allocation within overall goal of enhancing corporate value, encompassing growth strategy, cash holding policy, and dividend policy, in order to improve capital profitability.</li>
</ul>


Since TSE's request, many companies have introduced share buybacks as a measure, and as a result of investors demanding accountability for how these shares are used, share cancellations have increased.
Companies that frequently cancel treasury stock demonstrate superior capital profitability. Companies with high capital profitability also exhibit strong scores in growth strategy, cash holdings, dividend policy, and treasury stock cancellation.
More companies are expected to consider cash allocation within overall goal of enhancing corporate value, encompassing growth strategy, cash holding policy, and dividend policy, in order to improve capital profitability.


Share Buyback Likely to Grow over Growth Investment Hoped for by Corporate Governance Code Revision

<ul>
<li>Since sustainable growth in corporate value could not be achieved, the revised Corporate Governance Code now focuses on cash allocation practices that are strongly linked to corporate value creation.</li>
<li>To achieve the goal of maximizing shareholder interest, strategic planning and investment are essential, and it's natural to consider the remaining free cash flow as belonging to the owners, shareholders.</li>
<li>Pointing out better disclosure methods won't lead to cash allocation that satisfies investors unless they understand underlying contractual relationship between shareholders and management and the mindset behind executing management decisions.</li>
</ul>


Since sustainable growth in corporate value could not be achieved, the revised Corporate Governance Code now focuses on cash allocation practices that are strongly linked to corporate value creation.
To achieve the goal of maximizing shareholder interest, strategic planning and investment are essential, and it's natural to consider the remaining free cash flow as belonging to the owners, shareholders.
Pointing out better disclosure methods won't lead to cash allocation that satisfies investors unless they understand underlying contractual relationship between shareholders and management and the mindset behind executing management decisions.


Will Companies Change with Cash Allocation Disclosures that Don't Allow Copy-And-Paste Solutions?

Corporate Governance
The slippery slope

StubWorld: Don't Sell Toyota Inds (6201 JP) - Buy More

At ¥17,340/share, Toyota Industries is cheap. Corporate governance is shocking. Stay long. Buy more. This deal, as structured, is block-able, even...

David Blennerhassett

SoluM (248070 KS/Buy)As ESL Growth Continues, Restoring Trust Will Be Key

We expect a meaningful earnings ramp-up in the ESL business starting in 2026, while the valuation discount stemming from past governance issues is...

Mirae Asset Securities

Digital Holdings (2389 JP): Hakuhodo Bumps and Lowers the Minimum Tendering Condition

These developments showcase poor corporate governance. The revised Hakudodo offer will severely dent the chances of SilverCape’s offer.

Arun George

Will Companies Change with Cash Allocation Disclosures that Don't Allow Copy-And-Paste Solutions?

I would like to discuss the Nikkei article dated October 22nd titled “Corporate Governance Code Revision Sparks Wave of Selection Among Small and...

Metrical Inc

StubWorld: Don't Sell Toyota Inds (6201 JP) - Buy More

At ¥17,340/share, Toyota Industries is cheap. Corporate governance is shocking. Stay long. Buy more. This deal, as structured, is block-able, even...

David Blennerhassett

SoluM (248070 KS/Buy)As ESL Growth Continues, Restoring Trust Will Be Key

We expect a meaningful earnings ramp-up in the ESL business starting in 2026, while the valuation discount stemming from past governance issues is...

Mirae Asset Securities

Digital Holdings (2389 JP): Hakuhodo Bumps and Lowers the Minimum Tendering Condition

These developments showcase poor corporate governance. The revised Hakudodo offer will severely dent the chances of SilverCape’s offer.

Arun George

Share Buyback Likely to Grow over Growth Investment Hoped for by Corporate Governance Code Revision

I would like to discuss the Nikkei article dated October 23 regarding “Stock Retirement Hits Record High in Jan-Sep; Marui Group and ENEOS...

Metrical Inc

Will Companies Change with Cash Allocation Disclosures that Don't Allow Copy-And-Paste Solutions?

I would like to discuss the Nikkei article dated October 22nd titled “Corporate Governance Code Revision Sparks Wave of Selection Among Small and...

Metrical Inc