Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last September in the release of its new Mid-Term Management Plan, 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 a plan to cut cross-holdings to zero. <a href="https://www.smartkarma.com/entities/jtekt-corp" target="_blank" data-smartkarma-citation="entities:12197:1" rel="noopener">JTEKT Corp (6473 JP)</a> followed suit.</li>
<li>It started with a selldown of <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a>, then <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>, now <a href="https://www.smartkarma.com/insights/big-aisin-7259-offering-sets-stage-for-first-toyota-group-full-unwind" target="_blank" rel="noopener">Aisin</a>. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.</li>
<li>Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.</li>
</ul>


Last September in the release of its new Mid-Term Management Plan, Toyota Group member Aisin (7259 JP) announced a plan to cut cross-holdings to zero. JTEKT Corp (6473 JP) followed suit.
It started with a selldown of Denso Corp (6902 JP), then Toyota Industries (6201 JP), now Aisin. Last FY, Toyota Group cos reduced crossholdings by ¥870bn. This year will be more.
Attached below is a general breakdown of Toyota Group cross-holdings, discussion of cross-holding policies, and analysis of what is next, and what is not.


Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

Equity Bottom-Up

<ul>
<li>I was bearish <a href="https://www.smartkarma.com/entities/hino-motors-ltd" target="_blank" data-smartkarma-citation="entities:2144:1" rel="noopener">Hino Motors Ltd (7205 JP)</a> / <a href="https://www.smartkarma.com/entities/archion-corporation" target="_blank" data-smartkarma-citation="entities:47577:1" rel="noopener">Archion (543A JP)</a> against <a href="https://www.smartkarma.com/entities/isuzu-motors-ltd" target="_blank" data-smartkarma-citation="entities:14726:1" rel="noopener">Isuzu Motors (7202 JP)</a> last year at this time. That trade did well. I am bullish now. </li>
<li>Isuzu released Q1 results a bit more than a week ago. They were salutary. Archion released Q1 yesterday. Also salutary. Historical comparisons are a bit tough, but outlook is good.</li>
<li>When looking at Q1 seasonality vs Hino history, and Q1 revenue results vs last year, either Q1 was a very special outlier or the guidance is quite conservative.</li>
</ul>


I was bearish Hino Motors Ltd (7205 JP) / Archion (543A JP) against Isuzu Motors (7202 JP) last year at this time. That trade did well. I am bullish now. 
Isuzu released Q1 results a bit more than a week ago. They were salutary. Archion released Q1 yesterday. Also salutary. Historical comparisons are a bit tough, but outlook is good.
When looking at Q1 seasonality vs Hino history, and Q1 revenue results vs last year, either Q1 was a very special outlier or the guidance is quite conservative.


ARCHION (543A) - Q1 Results Positive, Seasonality VERY Positive

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>With <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota (7203 JP)</a> having sold some of its stake in <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso</a>, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI</a> and <a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive</a> this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.</li>
<li>Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


With Toyota (7203 JP) having sold some of its stake in Denso, KDDI and Harmonic Drive this year, it has firmly set the ball rolling for unwinding some of its cross-shareholding.
Toyota has a shareholding in around 60 listed companies, with its combined disposable stake worth over US$26bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Equity Capital Markets

<ul>
<li>On April 1, the merger of <a href="https://www.smartkarma.com/entities/hino-motors-ltd" target="_blank" data-smartkarma-citation="entities:2144:1" rel="noopener">Hino Motors Ltd (7205 JP)</a> and Mitsubishi Fuso Truck &amp; Bus Co (MFTBC) is effective where MFTBC gets injected into a Surviving Entity ARCHION.</li>
<li>Currently, "minorities" own 49.7% of Hino Motors but that includes cross-holders. Active holders and passive holders will own 5.7% and 3.9%, respectively. Daimler and Toyota 83%, crossholders 7+%.</li>
<li>Daimler and Toyota need to sell down to 25% each. The cross-holders will want to sell too. This will mean a BIG offering "as soon as is reasonable." A re-IPO.</li>
</ul>


On April 1, the merger of Hino Motors Ltd (7205 JP) and Mitsubishi Fuso Truck &amp; Bus Co (MFTBC) is effective where MFTBC gets injected into a Surviving Entity ARCHION.
Currently, "minorities" own 49.7% of Hino Motors but that includes cross-holders. Active holders and passive holders will own 5.7% and 3.9%, respectively. Daimler and Toyota 83%, crossholders 7+%.
Daimler and Toyota need to sell down to 25% each. The cross-holders will want to sell too. This will mean a BIG offering "as soon as is reasonable." A re-IPO.


Index Rebalance

<ul>
<li>Yesterday, the Nikkei Index Committee announced the results of the March 2026 review for the Nikkei 225 Average. TWO ADDs, TWO DELETEs. But not the DELETEs Quiddity was expecting.</li>
<li>The DELETEs chosen signify an even stricter adherence to the sector balancing effort than I (and perhaps others) expected. That changes the Sep26 predictions. </li>
<li>We had Mar26 DELETEs Casio Computer and GS Yuasa as DELs in Sep. Now we have two different ones. And the 3rd choice add has flipped with fourth.</li>
</ul>


Yesterday, the Nikkei Index Committee announced the results of the March 2026 review for the Nikkei 225 Average. TWO ADDs, TWO DELETEs. But not the DELETEs Quiddity was expecting.
The DELETEs chosen signify an even stricter adherence to the sector balancing effort than I (and perhaps others) expected. That changes the Sep26 predictions. 
We had Mar26 DELETEs Casio Computer and GS Yuasa as DELs in Sep. Now we have two different ones. And the 3rd choice add has flipped with fourth.


[Quiddity Index] Nikkei 225 Sep26 Rebal Preview Update - 2 Auto ADDs, 1 Extra, 1 Cap, NEW DELs

Japan

HINO MOTORS, LTD. develops, manufactures and markets diesel buses and trucks. The Company also produces heavy duty trucks, special purpose vehicles, and diesel engines for industrial and marine applications.

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Hino Motors Ltd (7205 JP)

Toyota Group Cross-Holding Structure Primer - Holdings, Unwind Progress, Buyback Policies, Etc

8mos past the first large Toyota Group selldown in Denso (i.e. past lockup). Others have followed since. Toyota Inds and Toyota R.E. have ¥600bn to...

Travis Lundy

ARCHION (543A) - Q1 Results Positive, Seasonality VERY Positive

Archion reported Q1 results. They were quite salutary (even without the one-off non-cash gains). Sales were particularly good, but it is early days...

Travis Lundy

Toyota Cross-Shareholding - To Say a Whole Lot Is Left Would Be a US$26bn Understatement

Toyota, Toyota Industries and Denso are tag teaming to unwind some of their stake in Aisin, in a deal worth over US$1bn. While the timing of the...

Sumeet Singh

[Japan M&A/ECM] ARCHION INCOMING!

ARCHION - the RTO/merger of Hino and Mitsubishi Fuso Truck & Bus Co - will list on April 1. Float is 10% to start. A huge offering will come. The...

Travis Lundy

[Quiddity Index] Nikkei 225 Sep26 Rebal Preview Update - 2 Auto ADDs, 1 Extra, 1 Cap, NEW DELs

The March 2026 Nikkei 225 review result changes our expectations for the Sep 2026 review both in terms of contents and method. It tilts names...

Travis Lundy

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