Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>8 days ago I wrote Murakami-san upped his stake in <a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a> to 23.5%, could buy more into earnings, and earnings could deliver a buyback. That was ¥3495/3600.</li>
<li>He bought more, reported 24.72% as of 22-Oct). I bet he reports more in a week. Also, Exedy today reported a small yoy gain in H1 revenue. OP+76%yoy. NP+17%yoy.</li>
<li>The company also reported a BIG div hike to ¥200/yr and a giant ¥30bn buyback. Activists and Murakami hangers-on have won. So watch out! The playbook is different than expected.</li>
</ul>


8 days ago I wrote Murakami-san upped his stake in Exedy Corp (7278 JP) to 23.5%, could buy more into earnings, and earnings could deliver a buyback. That was ¥3495/3600.
He bought more, reported 24.72% as of 22-Oct). I bet he reports more in a week. Also, Exedy today reported a small yoy gain in H1 revenue. OP+76%yoy. NP+17%yoy.
The company also reported a BIG div hike to ¥200/yr and a giant ¥30bn buyback. Activists and Murakami hangers-on have won. So watch out! The playbook is different than expected.


[JAPAN ACTIVISM] Exedy (7278) - You Won, BIG Capital Payout, Murakami Up. Now Watch Out!

<ul>
<li>With earnings today (which beat guidance), <a href="https://www.smartkarma.com/entities/mitsui-matsushima-co-ltd" target="_blank" data-smartkarma-citation="entities:13569:1" rel="noopener">Mitsui Matsushima (1518 JP)</a> announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.</li>
<li>The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.</li>
<li>If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn't super-rich.</li>
</ul>


With earnings today (which beat guidance), Mitsui Matsushima (1518 JP) announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.
The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.
If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn't super-rich.


[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback

<ul>
<li>Small cap Japanese manufacturer and purveyor of apparel <a href="https://www.smartkarma.com/entities/daidoh-ltd" target="_blank" data-smartkarma-citation="entities:18256:1" rel="noopener">Daidoh Ltd (3205 JP)</a> has consistently been a target for value investors. In late 2022, Strategic Capital went over 5%.</li>
<li>They have bought more, and as of end-March, they declared 24.85% of TSO (28% of voting rights), but they have 33%. They made proposals for the AGM. They won one. </li>
<li>Now Murakami-san has bought in, going over 5%. This gets interesting. Together they have 39.4% as of last week, and probably more now. That should get them 50+% next AGM/EGM.</li>
</ul>


Small cap Japanese manufacturer and purveyor of apparel Daidoh Ltd (3205 JP) has consistently been a target for value investors. In late 2022, Strategic Capital went over 5%.
They have bought more, and as of end-March, they declared 24.85% of TSO (28% of voting rights), but they have 33%. They made proposals for the AGM. They won one. 
Now Murakami-san has bought in, going over 5%. This gets interesting. Together they have 39.4% as of last week, and probably more now. That should get them 50+% next AGM/EGM.


JAPAN ACTIVISM: Strategic Capital Target Daido (3205) Now A Murakami Target Too

<ul>
<li>The fact <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> is only 4+% through terms is an indication investors are unconvinced blocking this deal gets a good governance result. That's bad. </li>
<li>Remember TICO+Toyota Group were already unwinding cross-holdings. The original docs said they'd agreed. I doubt they un-agree. The transaction WITH buybacks WITHOUT takeover (or restructuring) has a BVPS of ¥28,855.</li>
<li>If the benefits of uplift are shared with Toyota and all Crossholders, they receive an extra ¥385bn and ¥159bn and post-deal minority BVPS is "just" ¥25,549. Best outcome? Deal break.</li>
</ul>


The fact Toyota Industries (6201 JP) is only 4+% through terms is an indication investors are unconvinced blocking this deal gets a good governance result. That's bad. 
Remember TICO+Toyota Group were already unwinding cross-holdings. The original docs said they'd agreed. I doubt they un-agree. The transaction WITH buybacks WITHOUT takeover (or restructuring) has a BVPS of ¥28,855.
If the benefits of uplift are shared with Toyota and all Crossholders, they receive an extra ¥385bn and ¥159bn and post-deal minority BVPS is "just" ¥25,549. Best outcome? Deal break.


[Japan M&A/Activism] Toyota RE Deal for Toyota Industries (6201 JP) Last Looks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daidoh-ltd" target="_blank" data-smartkarma-citation="entities:18256:1" rel="noopener">Daidoh Ltd (3205 JP)</a> saw an activist "win" at its AGM, another activist bought, the stock popped. I wrote about it. 2hrs later, the Board set a new Div Policy.</li>
<li>¥100/Yr for 3 years in a row. That was 11% of then-current price. Big activist win for Strategic Capital which owned 25% and Murakami-san who had gone substantial 1wk earlier.</li>
<li>Today post-close, Strategic Capital reported it sold everything on 5 July, the next day. WOW. That was half of Maximum Real World Float. Oops. Murakami-san sold too. </li>
</ul>



Daidoh Ltd (3205 JP) saw an activist "win" at its AGM, another activist bought, the stock popped. I wrote about it. 2hrs later, the Board set a new Div Policy.
¥100/Yr for 3 years in a row. That was 11% of then-current price. Big activist win for Strategic Capital which owned 25% and Murakami-san who had gone substantial 1wk earlier.
Today post-close, Strategic Capital reported it sold everything on 5 July, the next day. WOW. That was half of Maximum Real World Float. Oops. Murakami-san sold too. 


JAPAN ACTIVISM:  Activists Sell ALL Their Daidoh (3205) In One Day. Oops 😬

Japan

Daidoh Ltd processes woolen fabrics and clothing for women and men. The Company manufactures mainly jackets, suits, blouses, shirts, pants, skirts, and other clothing.

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Daidoh Ltd (3205 JP)

[JAPAN ACTIVISM] Exedy (7278) - You Won, BIG Capital Payout, Murakami Up. Now Watch Out!

Exedy (7278) Earnings were OK/decent. Murakami-san has gone to 24.7%. We have a sharply higher dividend payout and policy, and a HUGE buyback....

Travis Lundy

[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback

Mitsui Matsushima popped after big 31% buyback news, but is now +7.5% vs the day before. If it bought back all shares at ¥4995 (the day after the...

Travis Lundy

JAPAN ACTIVISM: Strategic Capital Target Daido (3205) Now A Murakami Target Too

Daidoh was targeted by activist Strategic Capital for 18mos. They bought to 32% and this past AGM "won" small. Murakami-san has joined the fight...

Travis Lundy

[Japan M&A/Activism] Toyota RE Deal for Toyota Industries (6201 JP) Last Looks

The Toyota Fudosan tender offer for TICO falls far short of appropriate value. Toyota knows it. They are deliberately withholding that value from...

Travis Lundy

JAPAN ACTIVISM: Activists Sell ALL Their Daidoh (3205) In One Day. Oops 😬

Daidoh was a rare activist win at this season's AGMs. The Board responded by implementing a new div policy to pay out cash. The stock popped. The...

Travis Lundy

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