Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Equity Bottom-Up

<ul><li>This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu Shigeta</li><li>It’s been much talked about on Twitter and Substack, but few of the write-ups discuss Hikari Tsushin’s portfolio of publicly listed equities</li><li>I am personally not particularly interested in Hikari Tsushin itself, as it is primarily a sales organization helping other businesses find customers</li></ul>

This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu ShigetaIt’s been much talked about on Twitter and Substack, but few of the write-ups discuss Hikari Tsushin’s portfolio of publicly listed equitiesI am personally not particularly interested in Hikari Tsushin itself, as it is primarily a sales organization helping other businesses find customers

Pan-Asia Tactical Market Calls (Quant-Driven), MRM Research

Nico Rosti

Pan-Asia Tactical Market Calls (Quant-Driven)

MRM Research

Quantitative Research

Equity Derivatives

Daito Trust Construct / Equity Derivatives

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construction (1878 JP)</a> is launching a tender offer for <a href="https://www.smartkarma.com/entities/global-ltd-the" target="_blank" data-smartkarma-citation="entities:9672:1" rel="noopener">Global Ltd/The (3271 JP)</a> . Details have been discussed by <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> and <a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> in previous insights.</li>
<li>A strategic TOB for The Global Ltd, involving a ¥17bn investment, may introduce a neutral to negative immediate sentiment and affect <a href="https://www.smartkarma.com/entities/daito-trust-construct-co-ltd" target="_blank" data-smartkarma-citation="entities:10503:1" rel="noopener">Daito Trust Construction (1878 JP)</a> stock price. </li>
<li>This analysis examines potential market reactions and Daito’s projected trajectory, based on our quantitative forecasting model.</li>
</ul>



Daito Trust Construction (1878 JP) is launching a tender offer for Global Ltd/The (3271 JP) . Details have been discussed by Travis Lundy and Arun George in previous insights.
A strategic TOB for The Global Ltd, involving a ¥17bn investment, may introduce a neutral to negative immediate sentiment and affect Daito Trust Construction (1878 JP) stock price. 
This analysis examines potential market reactions and Daito’s projected trajectory, based on our quantitative forecasting model.


Daito Trust Construction (1878 JP) Tactical Outlook After TOB for The Global Ltd (3271 JP)

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.

Event-Driven

Japan Property Management Center / Event-Driven

Japan Property Management Center (3276 JP)

<ul>
<li>Ahead of the first close, Sunrise Capital increased its <a href="https://www.smartkarma.com/entities/japan-property-management-center" target="_blank" data-smartkarma-citation="entities:20501:1" rel="noopener">Japan Property Management Center (3276 JP)</a> offer by 0.9% from JPY2,250 to JPY2,270. The closing date is 5 October.</li>
<li>The price increase was funded by <a href="https://www.smartkarma.com/entities/hikari-tsushin-inc" target="_blank" data-smartkarma-citation="entities:4909:1" rel="noopener">Hikari Tsushin (9435 JP)</a> agreeing to a share buyback. It also has the added benefit of locking in additional support for the offer.</li>
<li>Overall, the revised terms do not reflect an offer struggling to complete but good governance in securing better (even if modest) terms for minorities. </li>
</ul>


Ahead of the first close, Sunrise Capital increased its Japan Property Management Center (3276 JP) offer by 0.9% from JPY2,250 to JPY2,270. The closing date is 5 October.
The price increase was funded by Hikari Tsushin (9435 JP) agreeing to a share buyback. It also has the added benefit of locking in additional support for the offer.
Overall, the revised terms do not reflect an offer struggling to complete but good governance in securing better (even if modest) terms for minorities. 


JPMC (3276 JP): Sunrise Capital’s Marginal Bump Funded by Hikari Tsushin Agreeing to a Share Buyback

<ul>
<li>
<a href="https://www.smartkarma.com/entities/leopalace21-corp" target="_blank" data-smartkarma-citation="entities:8244:1" rel="noopener">Leopalace21 Corp (8848 JP)</a> announced a tender offer from a <a href="https://www.smartkarma.com/entities/hikari-tsushin-inc" target="_blank" data-smartkarma-citation="entities:4909:1" rel="noopener">Hikari Tsushin (9435 JP)</a>-led consortium at JPY1,000, a 44.7% premium to the last close.  </li>
<li>While the offer represents a 10-year high, it is materially below the midpoint of the IFA’s DCF valuation range and light compared to precedents. </li>
<li>The process is marred by poor governance, including the absence of an auction and an agreement on a share buyback price with unequal after-tax benefits. </li>
</ul>



Leopalace21 Corp (8848 JP) announced a tender offer from a Hikari Tsushin (9435 JP)-led consortium at JPY1,000, a 44.7% premium to the last close.  
While the offer represents a 10-year high, it is materially below the midpoint of the IFA’s DCF valuation range and light compared to precedents. 
The process is marred by poor governance, including the absence of an auction and an agreement on a share buyback price with unequal after-tax benefits. 


Leopalace21 (8848 JP): Hikari Tsushin-Led Consortium’s Offer Is A Case Study for Poor Governance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-property-management-center" target="_blank" data-smartkarma-citation="entities:20501:1" rel="noopener">Japan Property Management Center (3276 JP)</a> announced a Sunrise Capital-sponsored MBO at JPY2,250, a 23.5% premium to the last close of JPY1,822.  </li>
<li>The offer, which resulted from an auction, is attractive as it represents an all-time high and is at the midpoint of the IFA DCF valuation range. </li>
<li>Key shareholders will be supportive of the offer, particularly as the 23.5% takeover premium is understated, as JPMC shares have materially outperformed its peers over the last month.</li>
</ul>



Japan Property Management Center (3276 JP) announced a Sunrise Capital-sponsored MBO at JPY2,250, a 23.5% premium to the last close of JPY1,822.  
The offer, which resulted from an auction, is attractive as it represents an all-time high and is at the midpoint of the IFA DCF valuation range. 
Key shareholders will be supportive of the offer, particularly as the 23.5% takeover premium is understated, as JPMC shares have materially outperformed its peers over the last month.


JPMC (3276 JP): Sunrise Capital-Sponsored MBO at JPY2,250

Japan

DAITO TRUST CONSTRUCTION CO., LTD. operates building construction and real estate businesses.  The Company plans and constructs apartment and commercial buildings mainly for land owners.  Daito Trust Construction provides brokerage and maintenance services as well.

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Daito Trust Construct (1878 JP)

Hikari Tsushin's Portfolio

This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu Shigeta. It’s been much talked...

Asian Century Stocks

Daito Trust Construction (1878 JP) Tactical Outlook After TOB for The Global Ltd (3271 JP)

Daito Trust Construction has launched a TOB for The Global Ltd. Our analysis evaluates the potential effects on Daito’s stock price, with...

Nico Rosti

Leopalace21 (8848 JP): Hikari Tsushin-Led Consortium’s Offer Is A Case Study for Poor Governance

The offer is materially below the midpoint of IFA’s DCF and marred by poor governance. However, the support from the two largest holders and the...

Arun George

JPMC (3276 JP): Sunrise Capital-Sponsored MBO at JPY2,250

The offer, which resulted from an auction, is attractive as it represents an all-time high and is at the midpoint of the IFA DCF valuation range.

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hikari Tsushin's Portfolio

This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu Shigeta. It’s been much talked...

Asian Century Stocks

Daito Trust Construction (1878 JP) Tactical Outlook After TOB for The Global Ltd (3271 JP)

Daito Trust Construction has launched a TOB for The Global Ltd. Our analysis evaluates the potential effects on Daito’s stock price, with...

Nico Rosti

JPMC (3276 JP): Sunrise Capital’s Marginal Bump Funded by Hikari Tsushin Agreeing to a Share Buyback

The revised terms do not reflect an offer struggling to complete but good governance in securing better (even if modest) terms for minorities. This...

Arun George

Leopalace21 (8848 JP): Hikari Tsushin-Led Consortium’s Offer Is A Case Study for Poor Governance

The offer is materially below the midpoint of IFA’s DCF and marred by poor governance. However, the support from the two largest holders and the...

Arun George

JPMC (3276 JP): Sunrise Capital-Sponsored MBO at JPY2,250

The offer, which resulted from an auction, is attractive as it represents an all-time high and is at the midpoint of the IFA DCF valuation range.

Arun George