Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>As discussed <a href="https://www.smartkarma.com/insights/big-m3-2413-partial-tob-as-pasona-sells-control-of-benefit-one-2412-really-interesting-dynamics" target="_blank" rel="noopener">here</a> in a piece about the Partial Tender Offer<a href="https://www.smartkarma.com/insights/big-m3-2413-partial-tob-as-pasona-sells-control-of-benefit-one-2412-really-interesting-dynamics" target="_blank" data-smartkarma-citation="insights:117493" rel="noopener"></a>, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).</li>
<li>That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.</li>
<li>Though we don't know what the future holds, Pasona now is the wrong price for its future. </li>
</ul>


As discussed here in a piece about the Partial Tender Offer, Pasona Group (2168) has agreed to sell its controlling stake in Benefit One (2412) to M3 (2413).
That will leave Pasona Group with a fair chunk of cash and possibly a residual stake in Benefit One, depending on the results.
Though we don't know what the future holds, Pasona now is the wrong price for its future. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/sharingtechnology-inc" target="_blank" data-smartkarma-citation="entities:26948:1" rel="noopener">Sharingtechnology Inc (3989 JP)</a> popped sharply after a Mergermarket article in late June. It went up 40% then climbed through July and August. </li>
<li>The company was up for auction and there were multiple bidders in the First Round. It went to a second in July-August and only MBK bid. </li>
<li>Activist AVI asked for a little more (holds bowl out Oliver-style) and got it. This looks done to me, even if it feels a bit light in aspiration.</li>
</ul>



Sharingtechnology Inc (3989 JP) popped sharply after a Mergermarket article in late June. It went up 40% then climbed through July and August. 
The company was up for auction and there were multiple bidders in the First Round. It went to a second in July-August and only MBK bid. 
Activist AVI asked for a little more (holds bowl out Oliver-style) and got it. This looks done to me, even if it feels a bit light in aspiration.


[Japan M&A] MBK Wins Auction for Sharingtechnology (3989 JP) At ¥1,550/Share - Looks Clean

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Market Watch: Topix hits a one month low as the BOJ Governor hints at an exit from negative rates policy</li>
<li>Major Movers: Dai-Ichi Life launched a rival bid for Benefit One, trumping M3’s offer. Good news for Benefit One and Pasona</li>
<li>Activist Watch: Nippon Active Value takes new positions in Eiken Chemical and Meiko Shipping</li>
</ul>


Market Watch: Topix hits a one month low as the BOJ Governor hints at an exit from negative rates policy
Major Movers: Dai-Ichi Life launched a rival bid for Benefit One, trumping M3’s offer. Good news for Benefit One and Pasona
Activist Watch: Nippon Active Value takes new positions in Eiken Chemical and Meiko Shipping


Japan Weekly | Benefit One, M3,Eiken Chemical

<ul>
<li>
<a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> fell 85+% from 2021 highs to spring 2026 lows. We're not that far off that level now. Earnings a week+ ago sent shares tumbling. </li>
<li>The company is now trading just above 20x earnings with 15% CAGR targeted organic revenue growth over the next five years plus inorganic growth expected from M&amp;A.</li>
<li>M3 now has its ABCs. An Activist. A Buyback. And Cash. And it has growth at lower multiples than peers. </li>
</ul>



M3 Inc (2413 JP) fell 85+% from 2021 highs to spring 2026 lows. We're not that far off that level now. Earnings a week+ ago sent shares tumbling. 
The company is now trading just above 20x earnings with 15% CAGR targeted organic revenue growth over the next five years plus inorganic growth expected from M&amp;A.
M3 now has its ABCs. An Activist. A Buyback. And Cash. And it has growth at lower multiples than peers. 


M3 (2413 JP) - Building Up After the Crash: Know Your ABCs (Activist, Buyback, Cash)

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a> shares popped 12% on news that Old Peak had emerged as a substantial shareholder, potentially signalling an activist push for the Board to prioritise shareholder returns.</li>
<li>DG’s shares have languished since the announcement of the <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> transaction on 12 May. DG is undoubtedly cheap and could be worth 2x more.</li>
<li>However, closing this valuation gap remains challenging, particularly if Resona continues to support the Board. Pasona is a cautionary tale that a material windfall does not result in a rerating. </li>
</ul>



Digital Garage (4819 JP) shares popped 12% on news that Old Peak had emerged as a substantial shareholder, potentially signalling an activist push for the Board to prioritise shareholder returns.
DG’s shares have languished since the announcement of the Kakaku.com Inc (2371 JP) transaction on 12 May. DG is undoubtedly cheap and could be worth 2x more.
However, closing this valuation gap remains challenging, particularly if Resona continues to support the Board. Pasona is a cautionary tale that a material windfall does not result in a rerating. 


Digital Garage (4819 JP): Cheap, but Not Cheerful

Japan

Benefit One Inc. provides outsourcing services to major corporations in Japan. The Company provides a variety of benefit programs such as leisure, education, child care, nursing care and meal services for employees of the client companies.

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Benefit One Inc (2412 JP)

Pasona: The Wrong Price

Pasona is now trading ~65% of post-tender net after-tax cash+securities. Maybe cheaper. Pasona ex-Benefit One/ex-Bewith is guided to lose money...

Travis Lundy

Japan Weekly | Benefit One, M3,Eiken Chemical

Topix drops as BOJ Governor suggests ending negative rates. Dai-Ichi Life outbids M3 for Benefit One. Nippon Active Value invests in Eiken...

Mark Chadwick

M3 (2413 JP) - Building Up After the Crash: Know Your ABCs (Activist, Buyback, Cash)

M3 was a darling of growth investors until 5 years ago. M3 was a five-bagger in the 18mos to early 2021. Then it crashed 85+%. But revenue, OP, and...

Travis Lundy

Digital Garage (4819 JP): Cheap, but Not Cheerful

DG is undoubtedly cheap and could be worth 2x more. However, closing this valuation gap remains challenging. Pasona is a cautionary tale that a...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pasona: The Wrong Price

Pasona is now trading ~65% of post-tender net after-tax cash+securities. Maybe cheaper. Pasona ex-Benefit One/ex-Bewith is guided to lose money...

Travis Lundy

[Japan M&A] MBK Wins Auction for Sharingtechnology (3989 JP) At ¥1,550/Share - Looks Clean

MBK is launching a TOB for service platform Sharingtechnology. They ended up being the only binding bid but there was a process. The bid is +55%...

Travis Lundy

Japan Weekly | Benefit One, M3,Eiken Chemical

​Topix drops as BOJ Governor suggests ending negative rates. Dai-Ichi Life outbids M3 for Benefit One. Nippon Active Value invests in Eiken...

Mark Chadwick

M3 (2413 JP) - Building Up After the Crash: Know Your ABCs (Activist, Buyback, Cash)

M3 was a darling of growth investors until 5 years ago. M3 was a five-bagger in the 18mos to early 2021. Then it crashed 85+%. But revenue, OP, and...

Travis Lundy

Digital Garage (4819 JP): Cheap, but Not Cheerful

DG is undoubtedly cheap and could be worth 2x more. However, closing this valuation gap remains challenging. Pasona is a cautionary tale that a...

Arun George

Topix drops as BOJ Governor suggests ending negative rates. Dai-Ichi Life outbids M3 for Benefit One. Nippon Active Value invests in Eiken...