Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In April I wrote <a href="https://www.smartkarma.com/entities/sanken-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:6073:1" rel="noopener">Sanken Electric (6707 JP)</a> vs <a href="https://www.smartkarma.com/entities/allegro-microsystems-inc" target="_blank" data-smartkarma-citation="entities:29707:1" rel="noopener">Allegro MicroSystems (ALGM US)</a> was attractive as a situation but the spread could be wider. I also noted two activists controlled 45%.</li>
<li>Two weeks later, one activist sold 6%. Presumably they have sold the rest. But now the spread is much wider AND Allegro has fallen sharply off highs. </li>
<li>Allegro is adjacent to the AI data centre play, making sensor ICs for power management functions. Other affiliate Polar makes more power chips. Sanken's cheap here.</li>
</ul>


In April I wrote Sanken Electric (6707 JP) vs Allegro MicroSystems (ALGM US) was attractive as a situation but the spread could be wider. I also noted two activists controlled 45%.
Two weeks later, one activist sold 6%. Presumably they have sold the rest. But now the spread is much wider AND Allegro has fallen sharply off highs. 
Allegro is adjacent to the AI data centre play, making sensor ICs for power management functions. Other affiliate Polar makes more power chips. Sanken's cheap here.


[Japan Activism] Activists Control LESS of Sanken (6707) Now - But Spread Is Wide and ALGM Grows

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Global renewable continue to outperform, although this is yet to be seen in Japan related names.</li>
<li>Very little read from the US with the market firmly in wait-and-see mode ahead of the Fed.</li>
<li>Kose sell-side meeting yesterday points to plans for global growth despite few specifics released for its new MTP set to be released in October.</li>
</ul>


Global renewable continue to outperform, although this is yet to be seen in Japan related names.
Very little read from the US with the market firmly in wait-and-see mode ahead of the Fed.
Kose sell-side meeting yesterday points to plans for global growth despite few specifics released for its new MTP set to be released in October.


Japan Morning Connection: Kose Aims for Global Growth

<ul>
<li>Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.</li>
<li>Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.</li>
<li>Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays</li>
</ul>


Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.
Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.
Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays


Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

<ul>
<li>Effissimo Capital Management launched a partial Tender Offer for <a href="https://www.smartkarma.com/entities/sanken-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:6073:1" rel="noopener">Sanken Electric (6707 JP)</a> five years ago. The goal was 20%. That tender failed but 6mos later they were at 19%.</li>
<li>Effissimo bought more, and the company bought back 20% of shares; Effissimo is at 36% now. In late 2022, Oasis bought 6.8%. Now 9.8%. Activists effectively control the vote.</li>
<li>In Q3 2024, Sanken de-consolidated <a href="https://www.smartkarma.com/entities/allegro-microsystems-inc" target="_blank" data-smartkarma-citation="entities:29707:1" rel="noopener">Allegro MicroSystems (ALGM US)</a> but their stake is still 2x Sanken's market cap. The "core" business is weak, but should grow. The question is pressure.</li>
</ul>


Effissimo Capital Management launched a partial Tender Offer for Sanken Electric (6707 JP) five years ago. The goal was 20%. That tender failed but 6mos later they were at 19%.
Effissimo bought more, and the company bought back 20% of shares; Effissimo is at 36% now. In late 2022, Oasis bought 6.8%. Now 9.8%. Activists effectively control the vote.
In Q3 2024, Sanken de-consolidated Allegro MicroSystems (ALGM US) but their stake is still 2x Sanken's market cap. The "core" business is weak, but should grow. The question is pressure.


[Japan Activism] Activists Control Sanken (6707 JP) Going Forward - Watch For Better Plans

<ul>
<li>SOX up ~80% this quarter, one of its biggest ever gains, making quarter-end profit-taking a real risk for high-flying AI names over the next two sessions.</li>
<li>Rohm, Fuji Elec, Renesas and Sanken likely to open weak after Onsemi -24% taken as a warning that there isn’t much upside for power/industrial makers in the DC arena.</li>
<li>European heatwave puts Daikin, Mitsubishi Electric and Panasonic A/C names in focus as a potential distraction from AI volatility into quarter end.</li>
</ul>


SOX up ~80% this quarter, one of its biggest ever gains, making quarter-end profit-taking a real risk for high-flying AI names over the next two sessions.
Rohm, Fuji Elec, Renesas and Sanken likely to open weak after Onsemi -24% taken as a warning that there isn’t much upside for power/industrial makers in the DC arena.
European heatwave puts Daikin, Mitsubishi Electric and Panasonic A/C names in focus as a potential distraction from AI volatility into quarter end.


Japan Morning Connection: AI Names Increasingly Volatile with SOX Reversal and Quarter-End Pressure

Japan

Sanken Electric Co., Ltd. manufactures and sells discrete semiconductors such as diodes and transistors, and analog integrated circuits.  The Company also manufactures various kinds of adapters and surge/transient protectors.

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Sanken Electric (6707 JP)

[Japan Activism] Activists Control LESS of Sanken (6707) Now - But Spread Is Wide and ALGM Grows

Sanken Electric is at a wide spread (discount) to its holding in ALGM and other assets exist. ALGM has fallen far, making the optionality better.

Travis Lundy

Japan Morning Connection: Kose Aims for Global Growth

Global renewable sector continues to outperform, but Japan is lagging behind. US market is cautious ahead of the Fed meeting. Kose plans for...

Andrew Jackson

Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

[Japan Activism] Activists Control Sanken (6707 JP) Going Forward - Watch For Better Plans

Sanken Electric is 45-46% owned by two declared activists and there is probably more than 50% held by those two and hangers-on. It is cheap to its...

Travis Lundy

Japan Morning Connection: AI Names Increasingly Volatile with SOX Reversal and Quarter-End Pressure

Japanese AI and semi names face a rocky quarter end with power/industrial stocks, memory names and Softbank all under pressure, while A/C names may...

Andrew Jackson

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[Japan Activism] Activists Control LESS of Sanken (6707) Now - But Spread Is Wide and ALGM Grows

Sanken Electric is at a wide spread (discount) to its holding in ALGM and other assets exist. ALGM has fallen far, making the optionality better.

Travis Lundy

Japan Morning Connection: Kose Aims for Global Growth

​Global renewable sector continues to outperform, but Japan is lagging behind. US market is cautious ahead of the Fed meeting. Kose plans for...

Andrew Jackson

Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

​US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

[Japan Activism] Activists Control Sanken (6707 JP) Going Forward - Watch For Better Plans

Sanken Electric is 45-46% owned by two declared activists and there is probably more than 50% held by those two and hangers-on. It is cheap to its...

Travis Lundy

Japan Morning Connection: AI Names Increasingly Volatile with SOX Reversal and Quarter-End Pressure

Japanese AI and semi names face a rocky quarter end with power/industrial stocks, memory names and Softbank all under pressure, while A/C names may...

Andrew Jackson

Global renewable sector continues to outperform, but Japan is lagging behind. US market is cautious ahead of the Fed meeting. Kose plans for...

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...