Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>For <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals (OZL AU)</a>,  look elsewhere unless you are VERY bullish copper. But if you are VERY bullish copper, buy copper options rather than the embedded option in OZL. </li>
<li>Game on as <a href="https://www.smartkarma.com/entities/warrego-energy-ltd-082ab214-f4bb-4224-b321-8977486cd661" target="_blank" data-smartkarma-citation="entities:7808:1" rel="noopener">Warrego Energy (WGO AU)</a> shareholders weigh the pros and cons of Hancock's all-cash Offer against <a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a>'s "superior" scrip proposal. </li>
<li>
<a href="https://www.smartkarma.com/entities/jafco-co-ltd" target="_blank" data-smartkarma-citation="entities:8848:1" rel="noopener">Jafco Co Ltd (8595 JP)</a> succumbed to greenmail and tried to boost the price to explain the exit they were going to give Murakami-san. It didn't work. </li>
</ul>


For OZ Minerals (OZL AU),  look elsewhere unless you are VERY bullish copper. But if you are VERY bullish copper, buy copper options rather than the embedded option in OZL. 
Game on as Warrego Energy (WGO AU) shareholders weigh the pros and cons of Hancock's all-cash Offer against Strike Energy (STX AU)'s "superior" scrip proposal. 

Jafco Co Ltd (8595 JP) succumbed to greenmail and tried to boost the price to explain the exit they were going to give Murakami-san. It didn't work. 


Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac's A&Bs, Korean Mandatory Offers

Travis Lundy

Equity Bottom-Up

<ul>
<li>In early November, <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced it would buy <a href="https://www.smartkarma.com/entities/ipet-holdings-inc" target="_blank" data-smartkarma-citation="entities:36551:1" rel="noopener">ipet Holdings (7339 JP)</a>, of which listed VC/PE/incubator <a href="https://www.smartkarma.com/entities/dream-incubator-inc" target="_blank" data-smartkarma-citation="entities:1229:1" rel="noopener">Dream Incubator (4310 JP)</a> owned 55%. DI agreed. </li>
<li>Dream Incubator's exit is worth ¥21.54bn in cash and ¥18.2bn in extraordinary gains on the consolidated financial statements for March 2023. </li>
<li>That is nice. They have promised to deliver ¥10bn of proceeds to shareholders and reinvest the other ¥5bn to grow their consulting business. It's a nice little asset.</li>
</ul>


In early November, Dai Ichi Life Insurance (8750 JP) announced it would buy ipet Holdings (7339 JP), of which listed VC/PE/incubator Dream Incubator (4310 JP) owned 55%. DI agreed. 
Dream Incubator's exit is worth ¥21.54bn in cash and ¥18.2bn in extraordinary gains on the consolidated financial statements for March 2023. 
That is nice. They have promised to deliver ¥10bn of proceeds to shareholders and reinvest the other ¥5bn to grow their consulting business. It's a nice little asset.


Dream Incubator (4310 JP) - An Interesting Exit and Attractive Valuation for Future Growth

<ul>
<li>On 8 November, major Japanese life insurer <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced it would buy out leading pet insurer <a href="https://www.smartkarma.com/entities/ipet-holdings-inc" target="_blank" data-smartkarma-citation="entities:36551:1" rel="noopener">ipet Holdings (7339 JP)</a>. Yes, you read that right.</li>
<li>Japanese listed VC/PE firm and incubator <a href="https://www.smartkarma.com/entities/dream-incubator-inc" target="_blank" data-smartkarma-citation="entities:1229:1" rel="noopener">Dream Incubator Inc (4310 JP)</a> owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. </li>
<li>Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.</li>
</ul>


On 8 November, major Japanese life insurer Dai Ichi Life Insurance (8750 JP) announced it would buy out leading pet insurer ipet Holdings (7339 JP). Yes, you read that right.
Japanese listed VC/PE firm and incubator Dream Incubator Inc (4310 JP) owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. 
Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.


IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.

A sum of parts valuation would suggest Dream Incubator is very conservatively worth Y30bn (perhaps closer to Y40bn) vs. the current market cap of just over Y20bn. It is thus trading on at least a 35% discount to the sum of the parts, and the Ipet business is growing and there are a number of interesting potential IPOs to happen over the next few years. In terms of a p.e.r, the shares are on about 18x this year’s numbers. The company does not make forecasts as it is difficult to forecast the venture capital business. What they will say, however, is that the pet insurance business and the consulting business this year should have combined revenue of Y18bn (+16%) vs. Y15.5bn last year. This seems reasonable and profits on both will improve. Thus the wild card is the venture business but there is nothing to suggest a worse year this year.

Dream Incubator (4310) Sold off Following Ipet Listing, Now Too Cheap.

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book building will take place between the 10th and 16th of April. In the year to March 2017 this company had sales of Y10bn (+23%) and operating profits of Y0.3bn (-4%).As discussed in the past, ipet insuance is 61% owned by Dream Incubator (4310) and with sales of Y10bn has about 20% of Japan's pet insurance market. The leader in this market is Anicom…

It was recently announced that ipet insuance (7323) would IPO on the 25th April. The lead manager will be Daiwa. Pricing will be 6th April and book building will take place between the 10th and 16th of April. In the year to March 2017 this company had sales of Y10bn (+23%) and operating profits of Y0.3bn (-4%).As discussed in the past, ipet insuance is 61% owned by Dream Incubator (4310) and with sales of Y10bn has about 20% of Japan's pet insurance market. The leader in this market is Anicom…

Dream Incubator (4310) And the Upcoming IPO of Ipet Insurance (7323)

Japan

Dream Incubator Inc. nurtures venture companies.  The Company supports companies by providing strategic insights and other consulting services.

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Dream Incubator (4310 JP)

Last Week in Event SPACE: Oz Minerals, Warrego, JAFCO, Swire Pac's A&Bs, Korean Mandatory Offers

The silly season is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett