Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener"><strong>Toyota Industries (6201 JP)</strong></a>, one of the world's leading forklift manufacturers, has admitted to fabricating the results of parts testing, forcing some forklift shipments to be halted.</li>
<li>TICO has decided to suspend the shipping of three models of forklifts equipped with the suspect engines, which account for ~6% of total forklift sales (in terms of count). </li>
<li>Shares, quite rightly, have taken a hit. But this correction appears excessive.</li>
</ul>



Toyota Industries (6201 JP), one of the world's leading forklift manufacturers, has admitted to fabricating the results of parts testing, forcing some forklift shipments to be halted.
TICO has decided to suspend the shipping of three models of forklifts equipped with the suspect engines, which account for ~6% of total forklift sales (in terms of count). 
Shares, quite rightly, have taken a hit. But this correction appears excessive.


Toyota Industries: Guilty As Charged. But Excessively Punished

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.</li>
<li>It focuses on the mid- to high-end segment in China’s NEV market with a price range of RMB150,000-300,000. As of end FY21, it had delivered a total of 52,832 cars.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>


Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
It focuses on the mid- to high-end segment in China’s NEV market with a price range of RMB150,000-300,000. As of end FY21, it had delivered a total of 52,832 cars.
In this note, we talk about the positive aspects of the deal.


Leapmotor Pre-IPO - The Positives - Planned Launches Should Prop up Growth

<ul>
<li>
<a href="https://www.smartkarma.com/entities/suzuki-motor-corp" target="_blank" data-smartkarma-citation="entities:732:1" rel="noopener"><strong>Suzuki Motor (7269 JP)</strong></a>'s implied stub and simple ratio (Suzuki/ <strong><a href="https://www.smartkarma.com/entities/maruti-suzuki-india-ltd" target="_blank" data-smartkarma-citation="entities:733:1" rel="noopener">Maruti Suzuki India (MSIL IN)</a></strong>) are currently at all-time lows.</li>
<li>This bifurcation has become endemic in the relative value space, especially in Japan. </li>
<li>Maruti is trading rich amid its ongoing support for hybrid vehicles. That scenario won't play out well. </li>
</ul>



Suzuki Motor (7269 JP)'s implied stub and simple ratio (Suzuki/ Maruti Suzuki India (MSIL IN)) are currently at all-time lows.
This bifurcation has become endemic in the relative value space, especially in Japan. 
Maruti is trading rich amid its ongoing support for hybrid vehicles. That scenario won't play out well. 


Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again

<ul>
<li>
<strong><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></strong>'s implied stub and simple ratio with 8.5%-held <strong><a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a></strong> has significantly bifurcated in the last 12 months. </li>
<li>Yet recent and forward earnings at the stub level indicate this dislocation is unjustified. </li>
<li>Toyota Industries is a set up at this current level. </li>
</ul>



Toyota Industries (6201 JP)'s implied stub and simple ratio with 8.5%-held Toyota Motor (7203 JP) has significantly bifurcated in the last 12 months. 
Yet recent and forward earnings at the stub level indicate this dislocation is unjustified. 
Toyota Industries is a set up at this current level. 


Toyota Industries Back To Covid Lows Vs. Toyota Motors

Equity Bottom-Up

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<p>This week in StubWorld ...</p>
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<p>Ahead of the three-year anniversary lock-up expiring next month, enabling <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>/<a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> to sell more shares of <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>,  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. </p>
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<p>Preceding my comments on Naspers/Prosus/Tencent <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Ahead of the three-year anniversary lock-up expiring next month, enabling Prosus (PRX NA)/Naspers (NPN SJ) to sell more shares of Tencent Holdings (700 HK),  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. 




Preceding my comments on Naspers/Prosus/Tencent and PCCW Ltd (8 HK), are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



As always, more below the fold.


StubWorld: Naspers' Unsustainable Look-Through

Japan

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.

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Toyota Industries (6201 JP)

Toyota Industries: Guilty As Charged. But Excessively Punished

TICO has decided to suspend the shipping of forklifts equipped with suspect engines, which account for ~6% of total forklift sales. Shares have...

David Blennerhassett

Leapmotor Pre-IPO - The Positives - Planned Launches Should Prop up Growth

Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015. In this note, we will...

Sumeet Singh

Suzuki’s NAV Discount And Implied Stub Plumb New Lows. Again

I'd be setting up the stub here - long Suzuki, short Maruti - once the momentum begins to turn. Maruti is supporting outdated tech, which will be...

David Blennerhassett

Toyota Industries Back To Covid Lows Vs. Toyota Motors

Unless the market were assigning a significantly reduced valuation for the stub ops, this protracted bifurcation is unjustified. As it is, an EBIT...

David Blennerhassett

StubWorld: Naspers' Unsustainable Look-Through

Long Naspers vs Tencent, is the obvious trade at the current look-through value. IF Naspers+Prosus decides to sell some more Tencent, expect...

David Blennerhassett

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