Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<p>What a pleasure in being able to read <a href="https://www.smartkarma.com/profiles/1628" target="_blank" data-smartkarma-citation="accounts:1628">Dr. Jim Walker</a>'s insights on Smartkarma! In his report, <a href="https://www.smartkarma.com/insights/world-war-three-part-1-falling-fertility" target="_blank" data-smartkarma-citation="insights:12891">World War Three: Part 1 – Falling Fertility</a>, <a href="https://www.smartkarma.com/profiles/1628" target="_blank" data-smartkarma-citation="accounts:1628">Dr. Jim Walker</a> mentions that the falling fertility rates in many Asian countries including Korea and Japan and the resulting generational conflict is going to be a major theme of the next 30 years unless governments take action. </p><p>There were 20+ research gems in this week's The Week That Was in North Asia. We want to highlight three reports, in particular.</p><ul><li><strong>Toshiba: </strong>Some day, there will be a movie or documentary made about the current Toshiba saga. A decade from now, who knows how Toshiba will turn out. But there is not much time left. There are only about 7 months left until the end of March 2018 deadline prior to which the company needs to deal with its excess liabilities and sell its memory unit, otherwise it will be delisted. <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a> provides further updates about Toshiba in his report, <a href="https://www.smartkarma.com/insights/toshiba-pwc-and-the-tse" target="_blank" data-smartkarma-citation="insights:12815">Toshiba, PWC and the TSE</a>. Mio believes that a Hon Hai deal would not be approved by the government. A WDC-led deal remains the most likely solution. </li><li><strong>Minato Bank</strong>: Structural demographics and economic challenges in Japan are forcing some consolidation of the banks. <a href="https://www.smartkarma.com/profiles/25" target="_blank" data-smartkarma-citation="accounts:25">Travis Lundy</a> provides an update on the consolidation of the Minato Bank, <span class="mainTitle">Kansai Urban Banking Corporation and The Kinki Osaka Bank, Ltd. in his report, <a href="https://www.smartkarma.com/insights/a-kinki-osaka-menage-a-trois-revisited" target="_blank" data-smartkarma-citation="insights:12888">A Kinki Osaka Ménage à Trois Revisited</a>. Travis thinks </span><span class="mainTitle">the risk favors being long Minato vs KUB  simply because of the enormous dilution which has to be factored into the fair value of KUB as Resona assumes control of two entities (i.e. 50+ ownership) it did not previously control, Minato's significant discount to book value, and the large dilution coming from KUB's pref shares.</span></li><li><strong>Samsung Electronics</strong> - <a href="https://www.smartkarma.com/profiles/354" target="_blank" data-smartkarma-citation="accounts:354">Sanghyun Park</a> writes about the Samsung Electronics restructuring in his report, <a href="https://www.smartkarma.com/insights/will-samsung-electronics-have-dual-governance-structure-implications-of-latest-law-revision" target="_blank" data-smartkarma-citation="insights:12920">Will Samsung Electronics Have Dual Governance Structure? Implications of Latest Law Revision</a>. Sanghyun explains in his report about the latest revision to the Capital Market Act which is designed to amend treasury share acquisition conditions. Currently, Korean companies are not allowed to buy their own shares from specific shareholders through a pre-arranged block deal. That is, companies have to buy their own shares openly in the market from unspecified individual shareholders. Now, this revision will allow companies to buy their own shares from specific shareholders through a pre-arranged block deal if there is a 'valid and inevitable reason'. In other words, this revision will allow <a href="https://www.smartkarma.com/entities/191" target="_blank" data-smartkarma-citation="entities:191:1">Samsung Electronics Co Ltd (005930 KS)</a> to buy its own shares owned by <a href="https://www.smartkarma.com/entities/510" target="_blank" data-smartkarma-citation="entities:510:1">Samsung Life Insurance Co., Ltd (032830 KS)</a> and <a href="https://www.smartkarma.com/entities/511" target="_blank" data-smartkarma-citation="entities:511:1">Samsung Fire &amp; Marine Ins (000810 KS)</a>. </li></ul>

What a pleasure in being able to read Dr. Jim Walker's insights on Smartkarma! In his report, World War Three: Part 1 – Falling Fertility, Dr. Jim Walker mentions that the falling fertility rates in many Asian countries including Korea and Japan and the resulting generational conflict is going to be a major theme of the next 30 years unless governments take action. There were 20+ research gems in this week's The Week That Was in North Asia. We want to highlight three reports, in particular.Toshiba: Some day, there will be a movie or documentary made about the current Toshiba saga. A decade from now, who knows how Toshiba will turn out. But there is not much time left. There are only about 7 months left until the end of March 2018 deadline prior to which the company needs to deal with its excess liabilities and sell its memory unit, otherwise it will be delisted. Mio Kato, CFA provides further updates about Toshiba in his report, Toshiba, PWC and the TSE. Mio believes that a Hon Hai deal would not be approved by the government. A WDC-led deal remains the most likely solution. Minato Bank: Structural demographics and economic challenges in Japan are forcing some consolidation of the banks. Travis Lundy provides an update on the consolidation of the Minato Bank, Kansai Urban Banking Corporation and The Kinki Osaka Bank, Ltd. in his report, A Kinki Osaka Ménage à Trois Revisited. Travis thinks the risk favors being long Minato vs KUB  simply because of the enormous dilution which has to be factored into the fair value of KUB as Resona assumes control of two entities (i.e. 50+ ownership) it did not previously control, Minato's significant discount to book value, and the large dilution coming from KUB's pref shares.Samsung Electronics - Sanghyun Park writes about the Samsung Electronics restructuring in his report, Will Samsung Electronics Have Dual Governance Structure? Implications of Latest Law Revision. Sanghyun explains in his report about the latest revision to the Capital Market Act which is designed to amend treasury share acquisition conditions. Currently, Korean companies are not allowed to buy their own shares from specific shareholders through a pre-arranged block deal. That is, companies have to buy their own shares openly in the market from unspecified individual shareholders. Now, this revision will allow companies to buy their own shares from specific shareholders through a pre-arranged block deal if there is a 'valid and inevitable reason'. In other words, this revision will allow Samsung Electronics Co Ltd (005930 KS) to buy its own shares owned by Samsung Life Insurance Co., Ltd (032830 KS) and Samsung Fire &amp; Marine Ins (000810 KS). 

The Week That Was in NorthAsia@Smartkarma: Bean Counters, Dr. Copper, and Shin Ramyun

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

<p>With only 2 weeks left in August, we wanted to highlight names that you should be looking at heading into the next couple of months to the end of the year. We screened for names that 1- have a success rate since 2000 greater than 70%. 2- median return relative to TOPIX is greater than 5.5%.</p><h2>Screen Results</h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/031/654/original/2.png?1502826967" class="editor-image img-responsive" data-smartkarma-image-id="31654"></figure><div class="content-caption">Source: Custom Products</div><p>Both <a href="https://www.smartkarma.com/entities/12795" target="_blank" data-smartkarma-citation="entities:12795:1">Yokogawa Electric Corp (6841 JP)</a> and <a href="https://www.smartkarma.com/entities/14085" target="_blank" data-smartkarma-citation="entities:14085:1">Sapporo Holdings Ltd (2501 JP)</a> have been up 88% of the time. That means in the 17 years they have only been down twice relative to…</p>

With only 2 weeks left in August, we wanted to highlight names that you should be looking at heading into the next couple of months to the end of the year. We screened for names that 1- have a success rate since 2000 greater than 70%. 2- median return relative to TOPIX is greater than 5.5%.Screen ResultsSource: Custom ProductsBoth Yokogawa Electric Corp (6841 JP) and Sapporo Holdings Ltd (2501 JP) have been up 88% of the time. That means in the 17 years they have only been down twice relative to…

Which Names Do the Best from September to the End of the Year....

Japan

HIDAY HIDAKA Corp. operates a chain of Oriental noodle and Chinese restaurants mainly in Saitama Prefecture.  The Company produces noodles, soup, and dumplings at its own factory.

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Hiday Hidaka (7611 JP)

The Week That Was in NorthAsia@Smartkarma: Bean Counters, Dr. Copper, and Shin Ramyun

What a pleasure in being able to read Dr. Jim Walker's insights on Smartkarma! In his report, World War Three: Part 1 – Falling Fertility, Dr. Jim...

Douglas Kim

Which Names Do the Best from September to the End of the Year....

With only 2 weeks left in August, we wanted to highlight names that you should be looking at heading into the next couple of months to the end of...

Custom Products Group

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