Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Pan Pacific International Holdings / Event-Driven

<p>Today after the close, <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a> announced two things (in Japanese only).</p><ol>
<li>PPIH was <a href="https://ppih.co.jp/news/210906_2.pdf" target="_blank" rel="noopener">registering for a bond issuance</a> for up to ¥300bn, and</li>
<li>PPIH would <a href="https://ppih.co.jp/news/210906.pdf" target="_blank" rel="noopener">buy back</a> up to 38,054,300 shares tomorrow morning on ToSTNeT-3 before the open, for up to ¥80.94bn. </li>
</ol><p>The second states that FamilyMart, which bought just over 10% of the company in the market starting in 2019 after</p><ol style="list-style-type: lower-alpha;">
<li>selling the rest of its UNY business to PPIH, and</li>
<li>attempting to buy 20% of PPIH in a Partial Tender Offer, which was much discussed on Smartkarma (see <a href="https://www.smartkarma.com/insights/familymart-tender-offer-for-don-quijote-misses-the-mark-as-mr-partridge-stands-pat" target="_blank" rel="noopener">this insight</a> for the result of the Tender Offer to see the earlier ones in the stream)....       ....and missing because almost nobody would sell their shares to FamilyMart</li>
</ol><p>... will sell 38,054,300 shares into the buyback. </p><p>The second statement is odd so merits a quick discussion. And there are opportunities for those who care.  As of Monday's close and consensus forecast Net Income to June 2022, PPIH's forward PER has hit a 20.x handle. That is good, but despite that, the market was not terribly supportive of last month's earnings/guidance release.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/188/original/Screenshot+2021-09-06+at+10.57.11+PM.png?1630940269" class="editor-image img-responsive" data-smartkarma-image-id="228188"></figure><p></p></section><p>As always, more below the fold. </p>

Today after the close, Pan Pacific International Holdings (7532 JP) announced two things (in Japanese only).
PPIH was registering for a bond issuance for up to ¥300bn, and
PPIH would buy back up to 38,054,300 shares tomorrow morning on ToSTNeT-3 before the open, for up to ¥80.94bn. 
The second states that FamilyMart, which bought just over 10% of the company in the market starting in 2019 after
selling the rest of its UNY business to PPIH, and
attempting to buy 20% of PPIH in a Partial Tender Offer, which was much discussed on Smartkarma (see this insight for the result of the Tender Offer to see the earlier ones in the stream)....       ....and missing because almost nobody would sell their shares to FamilyMart
... will sell 38,054,300 shares into the buyback. The second statement is odd so merits a quick discussion. And there are opportunities for those who care.  As of Monday's close and consensus forecast Net Income to June 2022, PPIH's forward PER has hit a 20.x handle. That is good, but despite that, the market was not terribly supportive of last month's earnings/guidance release.As always, more below the fold. 

PPIH (7532 JP) ToSTNeT-3 Buyback - The Alliance Is Strong, so FamilyMart Is Selling Shares

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<p><em><strong>The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.</strong></em></p><p>FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.</p><p>For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.</p><p>But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.</p>

The following is an in-depth review of Japanese retail in the last 18 months covering all the main formats and categories, providing a quick way to see an overview of all the key trends and winners and losers in Japanese retailing now and going forward.FY2020 was an anomaly and one that businesses everywhere will want to forget and never repeat. There was more than enough pain among Japan’s top retailers last year, but equally some formats did surprisingly well given the circumstances.For most, work-from-home was the single most important factor in determining a chain’s fortunes. City-centre stores and shopping centres offering mostly discretionary shopping have been hit hard, as have convenience stores.But those chains selling essentials, healthcare, electronics and, most importantly, food, all saw their fortunes improve. The pandemic has also revealed the strong, dynamic players and exposed the weaker ones. Oh, and everyone needs to be online.

The Polarising Pandemic in Japanese Retail

<p>The latest Census in Japan confirms the ongoing fall in total population across most of the country but reveals surprising growth markets in small pockets, particularly around Greater Tokyo which now accounts for just under 30% of the total population.</p><p>There are also ever growing numbers of single people, expanding the promising solo market. In the bigger cities, younger people bring new types of consumption but the increase in older singles is a growing problem.</p><p>The following provides background macro trends for any investor looking at the Japan consumer space and some stocks we think will benefit from these macro trends.</p>

The latest Census in Japan confirms the ongoing fall in total population across most of the country but reveals surprising growth markets in small pockets, particularly around Greater Tokyo which now accounts for just under 30% of the total population.There are also ever growing numbers of single people, expanding the promising solo market. In the bigger cities, younger people bring new types of consumption but the increase in older singles is a growing problem.The following provides background macro trends for any investor looking at the Japan consumer space and some stocks we think will benefit from these macro trends.

Shrinking, Ageing Japan but a Growing Solo Market

<p><strong>Department store numbers have dropped by a third in the past 13 years to just 199 and another third are likely to disappear this decade</strong></p><p>The hope that many of these properties would find new life as shopping buildings is now looking far less likely and, with Covid worsening the problem, an accelerated hollowing out of central retail areas looks unavoidable in many small cities.</p><p><strong>We are likely to see department store numbers drop to around 150 over the next five years.</strong></p><p>The impact on both the department store sector and regional retailing is profound.</p>

Department store numbers have dropped by a third in the past 13 years to just 199 and another third are likely to disappear this decadeThe hope that many of these properties would find new life as shopping buildings is now looking far less likely and, with Covid worsening the problem, an accelerated hollowing out of central retail areas looks unavoidable in many small cities.We are likely to see department store numbers drop to around 150 over the next five years.The impact on both the department store sector and regional retailing is profound.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>For the week from 22-26 March, Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/china-literature-ltd" target="_blank" data-smartkarma-citation="entities:24388:1" rel="noopener">China Literature (772 HK)</a>. Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/yaskawa-electric-corp" target="_blank" data-smartkarma-citation="entities:2458:1" rel="noopener">Yaskawa Electric (6506 JP)</a>, <a href="https://www.smartkarma.com/entities/base-inc" target="_blank" data-smartkarma-citation="entities:28353:1" rel="noopener">BASE Inc (4477 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a> and <a href="https://www.smartkarma.com/entities/peptidream-inc" target="_blank" data-smartkarma-citation="entities:13514:1" rel="noopener">Peptidream Inc (4587 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a>, <a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> and <a href="https://www.smartkarma.com/entities/mizuho-financial-group-inc" target="_blank" data-smartkarma-citation="entities:219:1" rel="noopener">Mizuho Financial Group (8411 JP)</a>. Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.</p></div><div><p>In Korea, shorts decreased on <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics Co., (207940 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> during the week. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/yageo-corporation" target="_blank" data-smartkarma-citation="entities:13212:1" rel="noopener">Yageo Corporation (2327 TT)</a> and <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/unimicron-technology-corp" target="_blank" data-smartkarma-citation="entities:18778:1" rel="noopener">Unimicron Technology (3037 TT)</a>, <a href="https://www.smartkarma.com/entities/elite-semiconductor-memory" target="_blank" data-smartkarma-citation="entities:9373:1" rel="noopener">Elite Semiconductor Memory (3006 TT)</a>, <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a> and <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.For the week from 22-26 March, Hong Kong saw shorts rise on Baidu (9888 HK), Tencent Holdings (700 HK), Yihai Int’L Holding (1579 HK), Kuaishou Technology (1024 HK) and Lenovo (992 HK) while there was short covering on Meituan (3690 HK), Sino Biopharmaceutical (1177 HK), Haier Smart Home Co Ltd (6690 HK), JD.com Inc. (9618 HK) and China Literature (772 HK). Shorts increased in the Communication Services, Financials, Information Technology and Consumer Discretionary sectors.In Japan, stocks that saw the most shorts were Yaskawa Electric (6506 JP), BASE Inc (4477 JP), Toshiba Corp (6502 JP), Aeon Co Ltd (8267 JP) and Peptidream Inc (4587 JP) while shorts decreased on Takeda Pharmaceutical (4502 JP), Monex Group Inc (8698 JP), Pan Pacific International Holdings (7532 JP), Nexon (3659 JP) and Mizuho Financial Group (8411 JP). Shorts increased in the Industrials sectors, and decreased in the Financials, Communication Services and Health Care sectors.In Korea, shorts decreased on Celltrion Inc (068270 KS), Samsung Biologics Co., (207940 KS), Samsung Electronics (005930 KS), SK Hynix (000660 KS) and Hyundai Motor Co (005380 KS) during the week. Stocks in Taiwan that saw the highest increase in shorts were Largan Precision (3008 TT), Pegatron Corp (4938 TT), Yageo Corporation (2327 TT) and Novatek Microelectronics Corp (3034 TT) while shorts were covered on Unimicron Technology (3037 TT), Elite Semiconductor Memory (3006 TT), AU Optronics (2409 TT) and TSMC (2330 TT). 

Asia Short Interest: Baidu, Kuaishou, Smoore, Yaskawa, BASE, Toshiba, Celltrion, Samsung, Largan

Japan

Pan Pacific International Holdings Corporation operates discount stores which sell consumer electronics, daily necessities, groceries, watches, and sporting goods. The Company mostly operates small scale stores based in Tokyo.

Pan Pacific International Holdings (7532 JP)

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Pan Pacific International Holdings (7532 JP)

PPIH (7532 JP) ToSTNeT-3 Buyback - The Alliance Is Strong, so FamilyMart Is Selling Shares

PPIH will buy back 6% of shares out on 7 Sep before the open in a ToSTNeT-3 transaction. ANYONE CAN JOIN (long sale or short sale). FamilyMart...

Travis Lundy

The Polarising Pandemic in Japanese Retail

A complete review of the Japanese retail sector in the last 18 months, format by format, category by category, providing key trends and winners &...

Michael Causton

Shrinking, Ageing Japan but a Growing Solo Market

Japan's population is contracting but there are areas of growth, particularly the solo market (single people living alone) and the senior market....

Michael Causton

The Japanese Department Store Debacle

The Japanese department sector has been in retreat for a long time but the decline accelerated from the start of Covid. Unfortunately, an end to...

Michael Causton

Asia Short Interest: Baidu, Kuaishou, Smoore, Yaskawa, BASE, Toshiba, Celltrion, Samsung, Largan

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

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