Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>
 JWD Acquisition: Infroneer acquires Japan Wind Development for ¥200 billion, sparking a ¥75 billion market cap dip and concerns about potential overpayment.</li>
<li>
 Valuation Analysis: Using DCF and comparable transaction values, estimates suggest JWD's equity value may be far lower than the agreed-upon ¥200 billion.</li>
<li>
 Need for Transparency: Infroneer's claim of fair value requires scrutiny. Market suggests an estimated fair value of ¥125 billion, emphasizing the need for detailed information on the acquisition.</li>
</ul>



 JWD Acquisition: Infroneer acquires Japan Wind Development for ¥200 billion, sparking a ¥75 billion market cap dip and concerns about potential overpayment.

 Valuation Analysis: Using DCF and comparable transaction values, estimates suggest JWD's equity value may be far lower than the agreed-upon ¥200 billion.

 Need for Transparency: Infroneer's claim of fair value requires scrutiny. Market suggests an estimated fair value of ¥125 billion, emphasizing the need for detailed information on the acquisition.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>At the October rebalance, Free Float Weight (FFW) will be reduced on 284 stocks and increased on 458 stocks. 43 stocks will be removed from Phased Weight Reduction.</li>
<li>Estimated one-way turnover is 1.77% resulting in a one-way trade of ¥1.45tn. 364 stocks have over 4 days ADV to trade, 97 stocks have over 8 days ADV to trade.</li>
<li>Over the last 6 months, the stocks with inflows (&gt;US$25m) have outperformed the stocks with outflows (&gt;US$25m) with most of the outperformance coming in the last three months.</li>
</ul>


At the October rebalance, Free Float Weight (FFW) will be reduced on 284 stocks and increased on 458 stocks. 43 stocks will be removed from Phased Weight Reduction.
Estimated one-way turnover is 1.77% resulting in a one-way trade of ¥1.45tn. 364 stocks have over 4 days ADV to trade, 97 stocks have over 8 days ADV to trade.
Over the last 6 months, the stocks with inflows (&gt;US$25m) have outperformed the stocks with outflows (&gt;US$25m) with most of the outperformance coming in the last three months.


TOPIX October 2023 Rebalance: Round Trip Trade of US$20bn; Upweights Outperform Downweights

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>YFO has returned with a potential tender offer price of JPY1,255 per share for <a href="https://www.smartkarma.com/entities/toyo-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:1176:1" rel="noopener">Toyo Construction (1890 JP)</a>, 25.5% above its previous offer of JPY1,000 per share.</li>
<li>The offer is conditional on due diligence access to confirm the feasibility of the medium-term management plan and no material accounting, tax, or legal issues.</li>
<li>The due diligence will take a month, with the offer expected to commence in late December. Expect due diligence access as the revised offer represents a 10-year high. </li>
</ul>


YFO has returned with a potential tender offer price of JPY1,255 per share for Toyo Construction (1890 JP), 25.5% above its previous offer of JPY1,000 per share.
The offer is conditional on due diligence access to confirm the feasibility of the medium-term management plan and no material accounting, tax, or legal issues.
The due diligence will take a month, with the offer expected to commence in late December. Expect due diligence access as the revised offer represents a 10-year high. 


Toyo Construction (1890 JP): YFO’s Potential Revised Offer at JPY1,255

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

<ul>
<li>Last night Reuters teased a headline saying the Nintendo Family Office called YFO (and related entities) would raise its proposed takeover price for Toyo Construction to ¥1255/share.</li>
<li>Recently, the company had agreed to start an investigation and YFO had dropped its demands for an EGM. In Q1, the company reporetd Revenues +18.6%yoy, reasonably in-line with original guidance.</li>
<li>This new price comes at a 1% premium to previous close, and is meant to start discussions. The Board has indicated it will start deliberations tomorrow.</li>
</ul>


Last night Reuters teased a headline saying the Nintendo Family Office called YFO (and related entities) would raise its proposed takeover price for Toyo Construction to ¥1255/share.
Recently, the company had agreed to start an investigation and YFO had dropped its demands for an EGM. In Q1, the company reporetd Revenues +18.6%yoy, reasonably in-line with original guidance.
This new price comes at a 1% premium to previous close, and is meant to start discussions. The Board has indicated it will start deliberations tomorrow.


YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share

Japan

INFRONEER Holdings Inc. offers infrastructure construction services. The Company provides energy construction, road construction, airport construction, exhibition hall construction, and more. INFRONEER Holdings also produces construction equipment.

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INFRONEER Holdings (5076 JP)

Infroneer (5076) | Valuation Turbulence

Infroneer's acquisition of Japan Wind Development raises concerns over potential overpayment and questions about the fair value of the deal. The...

Mark Chadwick

TOPIX October 2023 Rebalance: Round Trip Trade of US$20bn; Upweights Outperform Downweights

There are FFW changes for 700+ stocks and changes to the Phased Weight Reduction list. Round trip trade is around US$20bn and there is over 8 days...

Brian Freitas

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

There are 35 Potential ADDs and 39 Potential DELs (unique names) presented in the current Quiddity Leaderboard which is based on the latest...

Janaghan Jeyakumar, CFA

Toyo Construction (1890 JP): YFO’s Potential Revised Offer at JPY1,255

The offer is conditional on due diligence access to confirm the feasibility of the medium-term management plan. Expect due diligence access as the...

Arun George

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52-week Range

Market Cap (USDm)

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Infroneer (5076) | Valuation Turbulence

​Infroneer's acquisition of Japan Wind Development raises concerns over potential overpayment and questions about the fair value of the deal. The...

Mark Chadwick

TOPIX October 2023 Rebalance: Round Trip Trade of US$20bn; Upweights Outperform Downweights

There are FFW changes for 700+ stocks and changes to the Phased Weight Reduction list. Round trip trade is around US$20bn and there is over 8 days...

Brian Freitas

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

There are 35 Potential ADDs and 39 Potential DELs (unique names) presented in the current Quiddity Leaderboard which is based on the latest...

Janaghan Jeyakumar, CFA

Toyo Construction (1890 JP): YFO’s Potential Revised Offer at JPY1,255

The offer is conditional on due diligence access to confirm the feasibility of the medium-term management plan. Expect due diligence access as the...

Arun George

YFO Reloads Toyo Construction Takeover Proposal at ¥1255/Share

YFO has officially reloaded their proposal to take Toyo Construction private at JPY 1255/share, up from JPY 1000/share which had gotten stale....

Travis Lundy

Infroneer's acquisition of Japan Wind Development raises concerns over potential overpayment and questions about the fair value of the deal. The...