Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gmo-internet-inc-919fd60b-ad2a-4c5f-b333-167a849b67b0" target="_blank" data-smartkarma-citation="entities:9029:1" rel="noopener">GMO Internet (4784 JP)</a> was created by the reverse takeover of a listed cad/media company by its parent company's "internet infrastructure" business. GMO Internet Group ended up with ~98%.</li>
<li>In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.</li>
<li>The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn't shortable... so what next? Pain, and an ECLWO.</li>
</ul>



GMO Internet (4784 JP) was created by the reverse takeover of a listed cad/media company by its parent company's "internet infrastructure" business. GMO Internet Group ended up with ~98%.
In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.
The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn't shortable... so what next? Pain, and an ECLWO.


GMO Internet (4784) - Squeeze-Able So Squeezing, Offering Likely Gets Pulled - AVOID LIKE THE PLAGUE

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gmo-ad-partners-inc" target="_blank" data-smartkarma-citation="entities:9029:1" rel="noopener">Gmo Ad Partners (4784 JP)</a> has become GMO Internet as of 1 January 2025. On that day, it merged with the "internet infrastructure business" of <a href="https://www.smartkarma.com/entities/gmo-internet-inc" target="_blank" data-smartkarma-citation="entities:13631:1" rel="noopener">GMO Internet (9449 JP)</a>. </li>
<li>It was a kind of reverse takeover - a backdoor listing - and it on 24-Dec-2024, it was announced GMO Internet would move from TSE Standard to TSE Prime end-Jan2025.</li>
<li>The stock is +300% since then. Why? A squeeze. Share count increase? 15x. Float share increase? Zero. Resulting Real World Float? 1.24% of shares out and about to shrink.</li>
</ul>



Gmo Ad Partners (4784 JP) has become GMO Internet as of 1 January 2025. On that day, it merged with the "internet infrastructure business" of GMO Internet (9449 JP). 
It was a kind of reverse takeover - a backdoor listing - and it on 24-Dec-2024, it was announced GMO Internet would move from TSE Standard to TSE Prime end-Jan2025.
The stock is +300% since then. Why? A squeeze. Share count increase? 15x. Float share increase? Zero. Resulting Real World Float? 1.24% of shares out and about to shrink.


GMO Internet (4784) DropDown Holdco Gone Ballistic - Squeezed on Truly Tiny Float

<ul>
<li>On 1-Jan-2025, the new <a href="https://www.smartkarma.com/entities/gmo-internet-inc-919fd60b-ad2a-4c5f-b333-167a849b67b0" target="_blank" data-smartkarma-citation="entities:9029:1" rel="noopener">GMO Internet (4784 JP)</a> (formerly GMO Ad Partners) was reborn. It was basically a RTO (of parent GMO's data centre business) with a new Prime Listing.</li>
<li>Float was tiny. Maybe 2%. Then there was a TOPIX inclusion. The stock was squeezed from ¥1,200 to ¥3,100 (was ¥350 when the plan was announced in mid-2024). </li>
<li>An offering was announced last year at ¥3,100. Nobody wanted it. The stock fell 80%, rebounded a bit. Now we have a new offering. But it's still rich. </li>
</ul>


On 1-Jan-2025, the new GMO Internet (4784 JP) (formerly GMO Ad Partners) was reborn. It was basically a RTO (of parent GMO's data centre business) with a new Prime Listing.
Float was tiny. Maybe 2%. Then there was a TOPIX inclusion. The stock was squeezed from ¥1,200 to ¥3,100 (was ¥350 when the plan was announced in mid-2024). 
An offering was announced last year at ¥3,100. Nobody wanted it. The stock fell 80%, rebounded a bit. Now we have a new offering. But it's still rich. 


[Japan Offering] GMO Internet (4784) - A New Offering at a LOT Lower Price

<ul>
<li>The mega-offering-slash-re-IPO of <a href="https://www.smartkarma.com/entities/archion-corporation" target="_blank" data-smartkarma-citation="entities:47577:1" rel="noopener">Archion (543A JP)</a> likely prices today. This is 900mm new shares for ~US$1.6bn of which 40% (US$630mm) goes to internationals, 60% to domestics.</li>
<li>There's a bunch of index buying to do between now and end-October. More than I originally thought due to one recent data point.</li>
<li>The stock has NOT gotten crushed in the last two weeks despite indications the sellers wouldn't mind. That tells me this is priced except for print risk. </li>
</ul>


The mega-offering-slash-re-IPO of Archion (543A JP) likely prices today. This is 900mm new shares for ~US$1.6bn of which 40% (US$630mm) goes to internationals, 60% to domestics.
There's a bunch of index buying to do between now and end-October. More than I originally thought due to one recent data point.
The stock has NOT gotten crushed in the last two weeks despite indications the sellers wouldn't mind. That tells me this is priced except for print risk. 


[Japan Offering] ARCHION (543A) Prices Today (?) - Big Picture Growth Priced Cheaply

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/147/085/original/2020-07-21_06-31-46.png?1595280841" class="editor-image img-responsive" data-smartkarma-image-id="147085"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/147/086/original/2020-07-21_06-31-04.png?1595281006" class="editor-image img-responsive" data-smartkarma-image-id="147086"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/147/087/original/2020-07-21_06-44-10.png?1595281527" class="editor-image img-responsive" data-smartkarma-image-id="147087"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>Genky DrugStores (9267 JP)</strong> - Genky, listed in December 2017 and the eleventh largest listed drugstore chain in Japan, <span>was nearly Oversold in the first quarter.</span><span> As a result, the shares have been the best performing in the fifteen-string Peer Group over the last three months. The company's upward revisions to sales and operating profits of 9% and 21%, respectively match peer-trends. The recent share price rally has brought Genky back into line. The company is, however, one of only three chains that fail to earn a positive residual return on Net Operating Assets, Genky also has the highest debt/equity ratio of any listed chain. The company does not deserve any peer-premium, and we would sell into any revision-induced strength.</span></p>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>2 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score</strong>: 0 Positive / 0 Neutral / 2 Negative</li>
<li>
<strong>Average Results Score Change:</strong> -7.0</li>
<li>
<strong>Average % Change in Revenue:</strong> -12..% Quarter YoY / +0.8% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> +0.1ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 0%</li>
</ul></div><hr><div><p style="text-align: center;"><br><strong>4 Annual • 8 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 1 Positive / 1 Neutral / 2 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 2 Positive / 0 Neutral / 6 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -6.8</li>
</ul></div>


Source • Japan Analytics
Genky DrugStores (9267 JP) - Genky, listed in December 2017 and the eleventh largest listed drugstore chain in Japan, was nearly Oversold in the first quarter. As a result, the shares have been the best performing in the fifteen-string Peer Group over the last three months. The company's upward revisions to sales and operating profits of 9% and 21%, respectively match peer-trends. The recent share price rally has brought Genky back into line. The company is, however, one of only three chains that fail to earn a positive residual return on Net Operating Assets, Genky also has the highest debt/equity ratio of any listed chain. The company does not deserve any peer-premium, and we would sell into any revision-induced strength.
DAILY STATS
2 Quarterly Results

Results Score: 0 Positive / 0 Neutral / 2 Negative

Average Results Score Change: -7.0

Average % Change in Revenue: -12..% Quarter YoY / +0.8% Rolling TTM YoY

Average Operating Profit Margin Change: +0.1ppt

Percentage Making Quarterly Losses: 0%
 4 Annual • 8 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 1 Positive / 1 Neutral / 2 Negative

Interim Forecast/Revision Score Change: 2 Positive / 0 Neutral / 6 Negative

Average Forecast/Revision Score Change: -6.8


🇯🇵 JAPAN • Results & Revisions 20th July - Genki Genky, Alinco, Komatsu Wall, GMO-AD Partners

Japan

GMO Internet, Inc. offers marketing services. The Company offers internet advertising, mobile advertising, search engine marketing, and other services to medium sized advertising agencies. GMO Internet conducts businesses throughout Japan.

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GMO Internet (4784 JP)

GMO Internet (4784) - Squeeze-Able So Squeezing, Offering Likely Gets Pulled - AVOID LIKE THE PLAGUE

Re-boomeranging this. Since I wrote, the stock is down more than 40%. The shares have now broken ¥2,000/share. We still have an additional 50% to...

Travis Lundy

[Japan Offering] GMO Internet (4784) - A New Offering at a LOT Lower Price

1yr ago, parentco tried a huge offering at a huge price but no takers. Shares dropped 70+%. Earnings were as predicted. Now they try again. Still a...

Travis Lundy

[Japan Offering] ARCHION (543A) Prices Today (?) - Big Picture Growth Priced Cheaply

Archion priced its offering WAY too low. The stock has underperformed Isuzu by 15% since the post-merger business plan was announced and nearly 10%...

Travis Lundy

🇯🇵 JAPAN • Results & Revisions 20th July - Genki Genky, Alinco, Komatsu Wall, GMO-AD Partners

Genky DrugStores (9267 JP) - Genky, listed in December 2017 and the eleventh largest listed drugstore chain in Japan, was nearly Oversold in the...

Campbell Gunn

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

GMO Internet (4784) - Squeeze-Able So Squeezing, Offering Likely Gets Pulled - AVOID LIKE THE PLAGUE

Re-boomeranging this. Since I wrote, the stock is down more than 40%. The shares have now broken ¥2,000/share. We still have an additional 50% to...

Travis Lundy

GMO Internet (4784) DropDown Holdco Gone Ballistic - Squeezed on Truly Tiny Float

GMO Internet is the old GMO Ad Partners with a reverse takeover executed as of Jan 1. Float now is low. The company sees it as 1.44%. It's lower...

Travis Lundy

[Japan Offering] GMO Internet (4784) - A New Offering at a LOT Lower Price

1yr ago, parentco tried a huge offering at a huge price but no takers. Shares dropped 70+%. Earnings were as predicted. Now they try again. Still a...

Travis Lundy

[Japan Offering] ARCHION (543A) Prices Today (?) - Big Picture Growth Priced Cheaply

Archion priced its offering WAY too low. The stock has underperformed Isuzu by 15% since the post-merger business plan was announced and nearly 10%...

Travis Lundy

🇯🇵 JAPAN • Results & Revisions 20th July - Genki Genky, Alinco, Komatsu Wall, GMO-AD Partners

Genky DrugStores (9267 JP) - Genky, listed in December 2017 and the eleventh largest listed drugstore chain in Japan, was nearly Oversold in the...

Campbell Gunn