Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Daicel is notable for being Japan’s only manufacturer of acetic acid and for holding world-leading market positions in some cellulose-acetate products and in acetate tow for cigarette filters.</li>
<li>At current prices, the dividend yield of the company is at a healthy 4.6%. Its dividend yield averaged 4.4% from FY2021 to FY2025.</li>
<li>The company has enjoyed a solid sales growth of 10.5% CAGR from FY2021 to FY2025. Operating income nearly doubled from FY2021 to FY2025.</li>
</ul>


Daicel is notable for being Japan’s only manufacturer of acetic acid and for holding world-leading market positions in some cellulose-acetate products and in acetate tow for cigarette filters.
At current prices, the dividend yield of the company is at a healthy 4.6%. Its dividend yield averaged 4.4% from FY2021 to FY2025.
The company has enjoyed a solid sales growth of 10.5% CAGR from FY2021 to FY2025. Operating income nearly doubled from FY2021 to FY2025.


Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

<ul>
<li>Japan’s defense budget may be set to surge by about 50%, making NOF’s ammunition business a hot theme.</li>
<li>Be careful though. NOF’s munitions segment faces production limits and slow capacity expansion, capping near-term profit growth even with new defense spending.</li>
<li>We think NOF is overvalued, even as we acknowledge consensus forecasts are probably too low. But shorting now would probably just be fighting the tape. Save this idea for later.</li>
</ul>


Japan’s defense budget may be set to surge by about 50%, making NOF’s ammunition business a hot theme.
Be careful though. NOF’s munitions segment faces production limits and slow capacity expansion, capping near-term profit growth even with new defense spending.
We think NOF is overvalued, even as we acknowledge consensus forecasts are probably too low. But shorting now would probably just be fighting the tape. Save this idea for later.


Shorting NOF (4403) Just Now Is Probably a Very Bad Idea

<ul>
<li>Japan’s chemicals industry is finally undergoing a long-overdue consolidation that should lead to fewer companies, higher profitability, and less volatility.</li>
<li>These changes may be driving significant mispricing. Like most segments, RoE drives most of the variance in PBR, but with more frequent and far larger outliers.</li>
<li>KH Neochem, Daicel, and Mitsui Chemicals are the undervalued outliers, and all three are positioned for rapid growth in our view.</li>
</ul>


Japan’s chemicals industry is finally undergoing a long-overdue consolidation that should lead to fewer companies, higher profitability, and less volatility.
These changes may be driving significant mispricing. Like most segments, RoE drives most of the variance in PBR, but with more frequent and far larger outliers.
KH Neochem, Daicel, and Mitsui Chemicals are the undervalued outliers, and all three are positioned for rapid growth in our view.


Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

Global Materials | Industrials | Commodities

Rahul Jain

Thematic (Sector/Industry)

<ul>
<li>Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.</li>
<li>Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.</li>
<li>Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.</li>
</ul>


Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.
Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.
Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.


Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.</li>
<li>Low Positioning coupled with Negative Momentum: Nissan Motor Corp and Misumi Group</li>
<li>High Positioning coupled with High Momentum: ASICS Corp and Kyushu Railway</li>
</ul>


We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.
Low Positioning coupled with Negative Momentum: Nissan Motor Corp and Misumi Group
High Positioning coupled with High Momentum: ASICS Corp and Kyushu Railway


Japan

Daicel Corporation operates business in celluloid technologies, organic chemicals, high-performance chemicals, polymers and pyrotechnic devices. The Company's products include cellulose acetate, tow for cigarette filters, high-performance chemicals for electronics materials, engineering plastics like liquid crystal polymers (LPC), resin compounds, and automotive airbag inflators.

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Daicel Corp (4202 JP)

Asian Dividend Gems: Daicel Corp

Daicel, Japan's sole acetic acid manufacturer, boasts world-leading market positions in cellulose-acetate products and cigarette filter acetate...

Douglas Kim

Shorting NOF (4403) Just Now Is Probably a Very Bad Idea

Japan's defense budget increase may boost NOF's ammunition business, but production limits and slow capacity expansion could hinder profit growth....

Michael Allen

Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Michael Allen

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Rahul Jain

Japan Funds: Extreme Stocks

We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.

Steven Holden

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asian Dividend Gems: Daicel Corp

​Daicel, Japan's sole acetic acid manufacturer, boasts world-leading market positions in cellulose-acetate products and cigarette filter acetate...

Douglas Kim

Shorting NOF (4403) Just Now Is Probably a Very Bad Idea

​Japan's defense budget increase may boost NOF's ammunition business, but production limits and slow capacity expansion could hinder profit growth....

Michael Allen

Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

​Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Michael Allen

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

​Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Rahul Jain

Japan Funds: Extreme Stocks

We screen for Japanese companies at the extreme ends of their positioning or momentum ranges among active Japan equity funds.

Steven Holden

Daicel, Japan's sole acetic acid manufacturer, boasts world-leading market positions in cellulose-acetate products and cigarette filter acetate...

Japan's defense budget increase may boost NOF's ammunition business, but production limits and slow capacity expansion could hinder profit growth....

Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...