Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> results were salutary but noisy and the year to March 2023 is forecast similar (salutary but noisy). Service integration and growth to external customers is key.</li>
<li>Forecast growth in main businesses ex- to-be-sold listed subs is decent, but could be better. </li>
<li>A SEMI-Bigly buyback will help cushion any selling, but it has recently outrun Siemens on a like-for-like basis.</li>
</ul>



Hitachi Ltd (6501 JP) results were salutary but noisy and the year to March 2023 is forecast similar (salutary but noisy). Service integration and growth to external customers is key.
Forecast growth in main businesses ex- to-be-sold listed subs is decent, but could be better. 
A SEMI-Bigly buyback will help cushion any selling, but it has recently outrun Siemens on a like-for-like basis.


Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback

<ul>
<li>KKR and <a href="https://www.smartkarma.com/entities/hitachi-ltd" target="_blank" data-smartkarma-citation="entities:7797:1" rel="noopener">Hitachi Ltd (6501 JP)</a> have a deal to get KKR to buy <a href="https://www.smartkarma.com/entities/hitachi-transport-system-ltd" target="_blank" data-smartkarma-citation="entities:2395:1" rel="noopener">Hitachi Transport System (9086 JP)</a> in a VLBO (<em>Very</em> Leveraged BuyOut). </li>
<li>As somewhat expected, it is a "split price deal" where Hitachi will accept a lower price for its 40% stake than minorities will receive in a Tender Offer. </li>
<li>This is a big win for Hitachi Transport shareholders, but the Tender Offer likely won't start until late September.</li>
</ul>


KKR and Hitachi Ltd (6501 JP) have a deal to get KKR to buy Hitachi Transport System (9086 JP) in a VLBO (Very Leveraged BuyOut). 
As somewhat expected, it is a "split price deal" where Hitachi will accept a lower price for its 40% stake than minorities will receive in a Tender Offer. 
This is a big win for Hitachi Transport shareholders, but the Tender Offer likely won't start until late September.


Hitachi Transport System (9086) Shareholders Get the BIG Win in This VLBO

<ul>
<li>Hitachi has been in the process of selling <a href="https://www.smartkarma.com/entities/hitachi-transport-system-ltd" target="_blank" data-smartkarma-citation="entities:2395:1" rel="noopener">Hitachi Transport System (9086 JP)</a>. An article in the Nikkei Thursday last suggested a deal was imminent (both companies report 28 April). </li>
<li>Bloomberg carried an article this morning with more numbers and implied arithmetic. Then they revised the language in the article. </li>
<li>There is STILL room for different interpretations of likely deal price if one tries to parse all the info provided and match it with history. But we may be there.</li>
</ul>


Hitachi has been in the process of selling Hitachi Transport System (9086 JP). An article in the Nikkei Thursday last suggested a deal was imminent (both companies report 28 April). 
Bloomberg carried an article this morning with more numbers and implied arithmetic. Then they revised the language in the article. 
There is STILL room for different interpretations of likely deal price if one tries to parse all the info provided and match it with history. But we may be there.


Hitachi Transport (9086 JP) - Deciphering Takeover Price by Newspaper Article Language

<ul>
<li>The <em>Nikkei Leak Article</em> of the Hitachi Transport takeover price is out. That suggests board meetings and deal announcement are imminent</li>
<li>The price suggested in the article comes out to be just under ¥8,000. </li>
<li>Past deals between KKR and Hitachi for Hitachi subs (and the language of the article on deal structure) suggest the minority Tender Offer Price could be different.</li>
</ul>


The Nikkei Leak Article of the Hitachi Transport takeover price is out. That suggests board meetings and deal announcement are imminent
The price suggested in the article comes out to be just under ¥8,000. 
Past deals between KKR and Hitachi for Hitachi subs (and the language of the article on deal structure) suggest the minority Tender Offer Price could be different.


Hitachi Transport (9086) Takeover Deal Imminent

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

NTT (Nippon Telegraph & Telephone) / Event-Driven

<ul>
<li>On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.</li>
<li>From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.</li>
<li>Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.</li>
</ul>


On 7 April, the JPX announced the changes to the Free Float Weights (FFW) for the TOPIX Index. There are some big changes due to the updated FFW methodology.
From April to June, we see a one-way turnover of 2.87% and a one-way trade of ¥2,285bn. Some stocks have opposite way flows in different months.
Stocks with inflows outperformed stocks with outflows from Oct-Dec 2021 before giving up all the gains. These stocks have started to outperform and could continue outperforming over the next quarter.


TOPIX FFW Transition - Big Flows from April to June

Japan

Hitachi, Ltd. manufactures communications and electronic equipment, heavy electrical and industrial machinery, and consumer electronics.  The Company's diverse product line ranges from nuclear power systems to kitchen appliances. Hitachi also operates subsidiaries in the wire and cable, metal, and chemical industries.

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Hitachi Ltd (6501 JP)

Hitachi Results, Special Gain on Asset Sale, and Semi-Bigly Buyback

Hitachi's results were salutary. There is going to be more noise in segments as they are realigned again. A buyback will add support to shares but...

Travis Lundy

Hitachi Transport System (9086) Shareholders Get the BIG Win in This VLBO

Hitachi Transport (9086) shareholders score big with a Tender Offer takeout at JPY 8.913 for minority shareholders (while Hitachi sells 25+%...

Travis Lundy

Hitachi Transport (9086 JP) - Deciphering Takeover Price by Newspaper Article Language

Hitachi and Hitachi Transport (9086) report Thursday. I'd expect more details in the Nikkei on Thursday morning. In the meantime, we are probably...

Travis Lundy

Hitachi Transport (9086) Takeover Deal Imminent

The traditional Nikkei Leak Article is out, suggesting Hitachi will sell 30% for ¥200bn. Historically, Nikkei M&A arithmetic is sometimes off. But...

Travis Lundy

TOPIX FFW Transition - Big Flows from April to June

Changes to the Topix FFW methodology will result in a turnover of 2.87% & trade of ¥2,285bn from April to June. There is a lot to trade on some...

Brian Freitas

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