Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<div class="content-highlight"><p><em>In late-January, we witnessed the announcement of a merger between temporary staffing companies <strong><a href="https://www.smartkarma.com/entities/trust-tech-inc" target="_blank" data-smartkarma-citation="entities:17685:1" rel="noopener">BeNEXT Group (2154 JP)</a> and <a href="https://www.smartkarma.com/entities/yumeshin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12939:1" rel="noopener">Yumeshin Holdings (2362 JP)</a>.</strong> I discussed this Deal in <a href="https://www.smartkarma.com/insights/benext-yumeshin-merger-interesting-fundamentals-and-a-topix-index-event" target="_blank" data-smartkarma-citation="insights:47566" rel="noopener">BeNEXT - Yumeshin Merger: Interesting Fundamentals and a TOPIX Index Event</a> explaining why I was BULLISH. Shares in both companies have rallied 25%+ in less than 2 months.  </em></p></div><p><strong>Now we have a similar situation again. </strong></p><p>Japan-based waste water management company <a href="https://www.smartkarma.com/entities/takeei-corp" target="_blank" data-smartkarma-citation="entities:7936:1" rel="noopener">Takeei Corp (2151 JP)</a> and metal recycling company <a href="https://www.smartkarma.com/entities/rever-holdings-corp" target="_blank" data-smartkarma-citation="entities:32218:1" rel="noopener">Rever Holdings Corp (5690 JP)</a> announced after market-close on 18th March 2021 (<a href="https://ssl4.eir-parts.net/doc/2151/tdnet/1945449/00.pdf" target="_blank" rel="noopener">J-only</a>) that they had agreed to merge in a transaction that will see both companies joined under a new combined holding company. </p><p>According to their announcement, the merger is expected to be effective on 1st October 2021 which will also be the listing date for the new combined entity.  </p><p>This too is an interesting small cap situation.</p>

In late-January, we witnessed the announcement of a merger between temporary staffing companies BeNEXT Group (2154 JP) and Yumeshin Holdings (2362 JP). I discussed this Deal in BeNEXT - Yumeshin Merger: Interesting Fundamentals and a TOPIX Index Event explaining why I was BULLISH. Shares in both companies have rallied 25%+ in less than 2 months.  Now we have a similar situation again. Japan-based waste water management company Takeei Corp (2151 JP) and metal recycling company Rever Holdings Corp (5690 JP) announced after market-close on 18th March 2021 (J-only) that they had agreed to merge in a transaction that will see both companies joined under a new combined holding company. According to their announcement, the merger is expected to be effective on 1st October 2021 which will also be the listing date for the new combined entity.  This too is an interesting small cap situation.

Takeei (2151 JP) - Rever (5690 JP) Merger: TOPIX Event to Be Triggered

<p>Japan based temporary staffing companies <a href="https://www.smartkarma.com/entities/trust-tech-inc" target="_blank" data-smartkarma-citation="entities:17685:1" rel="noopener">BeNEXT Group (2154 JP)</a> and <a href="https://www.smartkarma.com/entities/yumeshin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12939:1" rel="noopener">Yumeshin Holdings (2362 JP)</a> announced on Friday (after close) that they had agreed to merge.</p><p>Following the completion of this transaction <a href="https://www.smartkarma.com/entities/trust-tech-inc" target="_blank" data-smartkarma-citation="entities:17685:1" rel="noopener">BeNEXT Group (2154 JP)</a> will be the surviving entity and <a href="https://www.smartkarma.com/entities/yumeshin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:12939:1" rel="noopener">Yumeshin Holdings (2362 JP)</a> will be the extinct entity. </p><p>The exchange ratio is 0.63 shares of BeNEXT Group for each share of Yumeshin Holdings. </p><p>The Merger is expected to be Effective on 1st April 2021. </p><p>In this insight we take a look at the likelihood of Deal completion, the fundamentals of these companies, and the TOPIX Index Event which accompanies the deal.</p>

Japan based temporary staffing companies BeNEXT Group (2154 JP) and Yumeshin Holdings (2362 JP) announced on Friday (after close) that they had agreed to merge.Following the completion of this transaction BeNEXT Group (2154 JP) will be the surviving entity and Yumeshin Holdings (2362 JP) will be the extinct entity. The exchange ratio is 0.63 shares of BeNEXT Group for each share of Yumeshin Holdings. The Merger is expected to be Effective on 1st April 2021. In this insight we take a look at the likelihood of Deal completion, the fundamentals of these companies, and the TOPIX Index Event which accompanies the deal.

BeNEXT - Yumeshin Merger: Interesting Fundamentals and a TOPIX Index Event

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

<p>We screened for small-cap names that have had good growth and a high ROE, but a very small Institutional Investor presence. We also limited the screen to names with greater than 2 million USD daily average value traded, so most can invest in them. <a href="https://www.smartkarma.com/entities/7989" target="_blank" data-smartkarma-citation="entities:7989:1">Jac Recruitment Co Ltd (2124 JP)</a> had a 34% ROE, it has a 2.7% dividend yield and grew Sales by 16% last year. <a href="https://www.smartkarma.com/entities/17685" target="_blank" data-smartkarma-citation="entities:17685:1">Trust Tech Inc (2154 JP)</a> is another one with a high dividend yield at 2%, a 32% ROE and 23% 5-year compound Sales growth.</p><h2>Screen Criteria</h2><ol><li>…</li></ol>

We screened for small-cap names that have had good growth and a high ROE, but a very small Institutional Investor presence. We also limited the screen to names with greater than 2 million USD daily average value traded, so most can invest in them. Jac Recruitment Co Ltd (2124 JP) had a 34% ROE, it has a 2.7% dividend yield and grew Sales by 16% last year. Trust Tech Inc (2154 JP) is another one with a high dividend yield at 2%, a 32% ROE and 23% 5-year compound Sales growth.Screen Criteria…

Small-Cap Quality and Growth Names with Little Institutional Investor Presence....

<p>I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.</p><p>We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.</p><h2>Screen Results </h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/029/859/original/2.png?1500323285" class="editor-image img-responsive" data-smartkarma-image-id="29859"></figure><div class="content-caption">Source: Custom Products</div><p>As you can see from the table above…</p>

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.Screen Results Source: Custom ProductsAs you can see from the table above…

Japan

Open Up Group Inc. provides temporary help services. The Company provides personnel staffing services, technician staffing services, overseas staffing services, and other services. Open Up Group also provides office building leasing, restaurants management, vocational training, and other services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Open Up Group (2154 JP)

Takeei (2151 JP) - Rever (5690 JP) Merger: TOPIX Event to Be Triggered

Takeei and Rever Holdings have announced a scrip merger and formation of a Holding Company for October 1st. The deal should pass the AGM/EGMs....

Janaghan Jeyakumar, CFA

BeNEXT - Yumeshin Merger: Interesting Fundamentals and a TOPIX Index Event

A merger between two similar companies, announced and effective in a hurry. The EGMs are end-March for Merger Effective Date April 1. This is more...

Janaghan Jeyakumar, CFA

Small-Cap Quality and Growth Names with Little Institutional Investor Presence....

We screened for small-cap names that have had good growth and a high ROE, but a very small Institutional Investor presence. We also limited the...

Custom Products Group

Small-Cap Growth Names in Japan....

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap...

Custom Products Group

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)