Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>It was confirmed on Friday afternoon <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751" rel="noopener">Fast Retailing (9983 JP)</a> was a single cap move, NOT a double-capping in a single Review. That limits the sell down.</li>
<li>Chemist Warehouse's reverse buyout of pharmacy wholesaler <a href="https://www.smartkarma.com/entities/sigma-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:15966:1" rel="noopener">Sigma Healthcare (SIG AU)</a> is now all-but complete.</li>
<li>
<a href="https://www.smartkarma.com/entities/takeda-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:11747:1" rel="noopener">Takeda Pharmaceutical (4502 JP)</a> announced decent results, decently upgraded guidance in both IFRS/GAAP terms and in Core/Adjusted terms (less impressive uplift in Adjusted/Analysed terms). They also announced a ¥100bn buyback.</li>
</ul>


It was confirmed on Friday afternoon Fast Retailing (9983 JP) was a single cap move, NOT a double-capping in a single Review. That limits the sell down.
Chemist Warehouse's reverse buyout of pharmacy wholesaler Sigma Healthcare (SIG AU) is now all-but complete.

Takeda Pharmaceutical (4502 JP) announced decent results, decently upgraded guidance in both IFRS/GAAP terms and in Core/Adjusted terms (less impressive uplift in Adjusted/Analysed terms). They also announced a ¥100bn buyback.


Last Week in Event SPACE: Fast Retailing, Sigma, Takeda Pharmaceutical, WH Group

<ul>
<li>I tally 58 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.</li>
<li>Ten new deals discussed this week! Australia's <a href="https://www.smartkarma.com/entities/excalibur-mining-corp-ltd" target="_blank" data-smartkarma-citation="entities:3088:1" rel="noopener">Dropsuite</a>, <a href="https://www.smartkarma.com/entities/red-hawk-mining-ltd" target="_blank" data-smartkarma-citation="entities:15387:1" rel="noopener">Red Hawk</a>,; Singapore's <a href="https://www.smartkarma.com/entities/japfa-ltd" target="_blank" data-smartkarma-citation="entities:15597:1" rel="noopener">Japfa</a>, <a href="https://www.smartkarma.com/entities/slb-development-ltd" target="_blank" data-smartkarma-citation="entities:26989:1" rel="noopener">SLB</a>; Japan's <a href="https://www.smartkarma.com/entities/global-food-creators-co-ltd" target="_blank" data-smartkarma-citation="entities:20883:1" rel="noopener">Global Food</a>, <a href="https://www.smartkarma.com/entities/ascot-corp" target="_blank" data-smartkarma-citation="entities:9576:1" rel="noopener">Ascot Corp</a>, <a href="https://www.smartkarma.com/entities/chuoh-pack-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:1360:1" rel="noopener">Chuoh Pack Industry</a>, <a href="https://www.smartkarma.com/entities/giga-prize-co-ltd" target="_blank" data-smartkarma-citation="entities:6115:1" rel="noopener">Giga Prize</a>, <a href="https://www.smartkarma.com/entities/sanyo-special-steel-co-ltd" target="_blank" data-smartkarma-citation="entities:15900:1" rel="noopener">Sanyo Special Steel</a>; and <a href="https://www.smartkarma.com/entities/dada-nexus-ltd" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus</a>.</li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/sigma-healthcare-ltd" target="_blank" data-smartkarma-citation="entities:15966:1" rel="noopener">Sigma Healthcare (SIG AU)</a>, <a href="https://www.smartkarma.com/entities/shandong-hi-speed-new-energy-g" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Shandong Hi-Speed New Energy (1250 HK)</a>, <a href="https://www.smartkarma.com/entities/china-national-building-ma-h" target="_blank" data-smartkarma-citation="entities:184:1" rel="noopener">China National Building Material (3323 HK)</a>, <a href="https://www.smartkarma.com/entities/malaysia-airports-holdings-bhd" target="_blank" data-smartkarma-citation="entities:117:1" rel="noopener">Malaysia Airports (MAHB MK)</a>, and <a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art (6808 HK)</a>.</li>
</ul>


I tally 58 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma.
Ten new deals discussed this week! Australia's Dropsuite, Red Hawk,; Singapore's Japfa, SLB; Japan's Global Food, Ascot Corp, Chuoh Pack Industry, Giga Prize, Sanyo Special Steel; and Dada Nexus.
Key updates/news took place on: Sigma Healthcare (SIG AU), Shandong Hi-Speed New Energy (1250 HK), China National Building Material (3323 HK), Malaysia Airports (MAHB MK), and Sun Art (6808 HK).


(Mostly) Asia-Pac M&A: Sigma Healthcare Dropsuite, Japfa, Dada Nexus, Malaysia Airports, Sanyo Steel

Travis Lundy

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/freebit-co-ltd" target="_blank" data-smartkarma-citation="entities:4966:1" rel="noopener">Freebit Co Ltd (3843 JP)</a> announced it would launch a Tender Offer next Monday to buy out minorities in 60.9%-owned <a href="https://www.smartkarma.com/entities/giga-prize-co-ltd" target="_blank" data-smartkarma-citation="entities:6115:1" rel="noopener">Giga Prize (3830 JP)</a>. </li>
<li>The multiple is not terribly impressive. It could be better. But they only need 5.8% of the 39.1% they do not own to get this over the hump.</li>
<li>Synergies are clear. They are expected. They are not priced in the valuation. This is disappointing. Again.</li>
</ul>


Today, Freebit Co Ltd (3843 JP) announced it would launch a Tender Offer next Monday to buy out minorities in 60.9%-owned Giga Prize (3830 JP). 
The multiple is not terribly impressive. It could be better. But they only need 5.8% of the 39.1% they do not own to get this over the hump.
Synergies are clear. They are expected. They are not priced in the valuation. This is disappointing. Again.


Freebit (3843) Buys Out Minorities in Giga Prize (3830) - Light, But Tough to Block

Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>Q1 FY04/25: Revenue JPY13.3bn (-5.3% YoY), Operating profit JPY1.5bn (-12.1% YoY), Recurring profit JPY1.5bn (-10.6% YoY), Net income JPY814mn (-5.7% YoY).</li><li>Business support services for MVNOs: Revenue JPY2.5bn (+4.9% YoY), Operating profit JPY325mn (-29.7% YoY).</li><li>5G Homestyle services: Revenue JPY6.2bn (-18.2% YoY), Operating profit JPY769mn (-23.7% YoY), excluding fiscal year-end change, revenue +5.9% YoY, operating profit +26.0% YoY.</li></ul>

Q1 FY04/25: Revenue JPY13.3bn (-5.3% YoY), Operating profit JPY1.5bn (-12.1% YoY), Recurring profit JPY1.5bn (-10.6% YoY), Net income JPY814mn (-5.7% YoY).Business support services for MVNOs: Revenue JPY2.5bn (+4.9% YoY), Operating profit JPY325mn (-29.7% YoY).5G Homestyle services: Revenue JPY6.2bn (-18.2% YoY), Operating profit JPY769mn (-23.7% YoY), excluding fiscal year-end change, revenue +5.9% YoY, operating profit +26.0% YoY.

Freebit Co Ltd (3843 JP): Q1 FY04/25 flash update

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Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

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Thematic (Sector/Industry)

When we wrote our first 5G note in <a href="https://www.smartkarma.com/insights/5g-set-to-disrupt-the-cellular-business-model" target="_blank" data-smartkarma-citation="insights:3542">5G Set to Disrupt the Cellular Business Model</a> we laid out arguments on how 5G could be more disruptive to mobile operators than fixed line in certain markets. This is NOT the case in Japan where the required network densification has already been done and there are no potential disruptors on the fixed-line side to challenge the existing business model. Instead, 5G deployments, starting with <a href="https://www.smartkarma.com/entities/1089" target="_blank" data-smartkarma-citation="entities:1089:1">NTT Docomo (9437 JP)</a> expected service launch in 2020 for the Tokyo Olympics, are likely to come at manageable cost and be focused on areas where capacity expansion is needed. Without excessive capex or spectrum costs and with little chance of market disruption, Japan’s operators are well-placed to benefit from 5G advances. This was one of the reasons we upgraded our target prices in <a href="https://www.smartkarma.com/insights/japan-telecoms-strong-1q17-results-confirm-rising-return-story-is-intact" target="_blank" data-smartkarma-citation="insights:5460">Japan Telecoms’ Strong 1Q17 Results Confirm Rising Return Story Is Intact.</a>

When we wrote our first 5G note in 5G Set to Disrupt the Cellular Business Model we laid out arguments on how 5G could be more disruptive to mobile operators than fixed line in certain markets. This is NOT the case in Japan where the required network densification has already been done and there are no potential disruptors on the fixed-line side to challenge the existing business model. Instead, 5G deployments, starting with NTT Docomo (9437 JP) expected service launch in 2020 for the Tokyo Olympics, are likely to come at manageable cost and be focused on areas where capacity expansion is needed. Without excessive capex or spectrum costs and with little chance of market disruption, Japan’s operators are well-placed to benefit from 5G advances. This was one of the reasons we upgraded our target prices in Japan Telecoms’ Strong 1Q17 Results Confirm Rising Return Story Is Intact.  

Japan's 5G Future: The Heavy Lifting Has Already Been Done

Japan

FreeBit Co., Ltd. provides Internet connectivity outsourcing services for Internet service providers.  The Company also offers ubiquitous networking environment.  FreeBit provides consulting services for Internet related businesses as well.

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Freebit Co Ltd (3843 JP)

Last Week in Event SPACE: Fast Retailing, Sigma, Takeda Pharmaceutical, WH Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

(Mostly) Asia-Pac M&A: Sigma Healthcare Dropsuite, Japfa, Dada Nexus, Malaysia Airports, Sanyo Steel

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Freebit (3843) Buys Out Minorities in Giga Prize (3830) - Light, But Tough to Block

Today, Freebit announced it would buy out minorities in 60.89%-owned Giga Prize. Given they have somewhat similar businesses in places, synergies...

Travis Lundy