Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.</li>
<li>Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.</li>
<li>Fat div. Lots of volume to buy in the next several months, but the big story is future measures.</li>
</ul>


I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
Fat div. Lots of volume to buy in the next several months, but the big story is future measures.


[JAPAN ACTIVISM] Exedy (7278) - Immediate Results Reaction Was a Damp Squib, But Climbing Now

<ul>
<li>This past week, activist Murakami-san's City Index Eleventh announced that the companies which jointly report now own 20.3%, which translates to 23.5% of voting rights. Average in-price?  ¥2,928/share.</li>
<li>The 2030 Plan from April saw 8% ROE by 2030, 6% by 2026. They've since bought back 11% of shares out. Better, but 1/4 of market cap is net cash+securities.</li>
<li>If one assumes they spend the net cash+securities to buy back stock 10% higher than here, pro-forma PBR is &lt;0.6x. ROE would be 7+%. There's room to run here, still. </li>
</ul>


This past week, activist Murakami-san's City Index Eleventh announced that the companies which jointly report now own 20.3%, which translates to 23.5% of voting rights. Average in-price?  ¥2,928/share.
The 2030 Plan from April saw 8% ROE by 2030, 6% by 2026. They've since bought back 11% of shares out. Better, but 1/4 of market cap is net cash+securities.
If one assumes they spend the net cash+securities to buy back stock 10% higher than here, pro-forma PBR is &lt;0.6x. ROE would be 7+%. There's room to run here, still. 


[JAPAN ACTIVISM] Murakami Group Now 23.5% on Exedy (7278) - LOTS of Room Left To Run

<ul>
<li>In late May, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced it would sell its 37% 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> . The market dropped. But that was the opportunity.</li>
<li>On 30 May, I said <em>"Buy the deal, buy in the market. It's cheap and vulnerable."</em> It's up 21.5% since (the day after). Peers are down 15-20%. </li>
<li>The company completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There's LOTS of cash left. </li>
</ul>


In late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP) . The market dropped. But that was the opportunity.
On 30 May, I said "Buy the deal, buy in the market. It's cheap and vulnerable." It's up 21.5% since (the day after). Peers are down 15-20%. 
The company completed its buyback. Murakami Group bought more. The stock (pro-forma) is at 0.62x book, 0.54x book for the non-cash portion. There's LOTS of cash left. 


[JAPAN ACTIVISM] Murakami Group Now 19+% on Exedy (7278) - LOTS of Room Left To Run

<ul>
<li>In late May, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced it would sell its 37% 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>. The market dropped. But that was an opportunity. </li>
<li>There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said "Buy the deal, buy in the market. It's cheap and vulnerable."</li>
<li>Exedy is up 21% since. On 17 June, activist Murakami-san's group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. </li>
</ul>


In late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP). The market dropped. But that was an opportunity. 
There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said "Buy the deal, buy in the market. It's cheap and vulnerable."
Exedy is up 21% since. On 17 June, activist Murakami-san's group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. 


[JAPAN ACTIVISM] - Murakami Group Bigger and Bolder on Exedy - STILL Room to Run

<ul>
<li>Buybacks are a central part of Corporate Japan's effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.</li>
<li>This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn't even include the biggest buybacks extant by March-end companies.</li>
<li>We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.</li>
</ul>


Buybacks are a central part of Corporate Japan's effort to improve corporate/capital governance. Lots of cross-holders want/need to sell. Lots of companies want to reduce excess equity.
This earnings season has seen a LOT of new buybacks announced. ¥7.3trln in the last month and that doesn't even include the biggest buybacks extant by March-end companies.
We are experimenting with new ways of displaying data/analytics for buybacks in Japan. To that end, we have a new tool. We hope users find it useful. We invite feedback.


[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month - Data on Each, Plus History

Japan

EXEDY Corporation manufactures drivetrain products for automobiles, industrial vehicles, and construction machinery.  The Company's products include manual clutches, torque converters, power shift transmissions, and hydraulic clutches. Exedy has its subsidiaries in South Korea, Australia, the US and the UK.

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Exedy Corp (7278 JP)

[JAPAN ACTIVISM] Exedy (7278) - Immediate Results Reaction Was a Damp Squib, But Climbing Now

Murakami-san is at 26% of voting rights and together with the first buyback, the entire Aisin offering is now covered. The next large buyback is...

Travis Lundy

[JAPAN ACTIVISM] Murakami Group Now 23.5% on Exedy (7278) - LOTS of Room Left To Run

Muirakami-san continues to accumulate Exedy. Now at 23.5%. Remaining overhang from the 36+% offering is 2%. Earnings are in a week. Excess capital...

Travis Lundy

[JAPAN ACTIVISM] Murakami Group Now 19+% on Exedy (7278) - LOTS of Room Left To Run

Murakami-san is up to 18% in Exedy. But that is 20.9% of voting rights. And that is at a price higher than pre-offering announcement. Since he...

Travis Lundy

[JAPAN ACTIVISM] - Murakami Group Bigger and Bolder on Exedy - STILL Room to Run

Murakami-san now owns c16% of Exedy. Exedy had 10mos to do the rest of its buyback. It is 60% done in Month 1. Accretion is faster than expected....

Travis Lundy

[Japan Buybacks] ¥7.3trln of Buybacks Announced In the Last Month - Data on Each, Plus History

Japan saw ¥7.3trln of buybacks announced in the March-end earnings season. Here we offer a tool to see them all, and past buyback patterns of each...

Travis Lundy

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