Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Japan Petroleum Exploration / Event-Driven

<ul>
<li>Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.</li>
<li>The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.</li>
<li>In this insight I look at several possible rankings for potential large buyback targets.</li>
</ul>


Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.
The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.
In this insight I look at several possible rankings for potential large buyback targets.


JAPAN GOVERNANCE CHANGES II - Who Could Surprise on Buybacks? Quant Rankings

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>The <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> Board has tried every tactic to delay YFO’s JPY1,000 tender offer. The Board’s new five-year medium-term management plan tilts the fight in its favour.</li>
<li>The Board’s new management plan, particularly the dividend payout, now provides shareholders with a credible alternative to accepting YFOs’ tender offer. The payout ratio for FY23-FY25 is set at 100%. </li>
<li>YFO’s primary tactic is to replace the Board at the June AGM, but shareholders have less reason to support it. Improving sentiment and the offer continue to underpin the shares. </li>
</ul>


The Toyo Construction (1890 JP) Board has tried every tactic to delay YFO’s JPY1,000 tender offer. The Board’s new five-year medium-term management plan tilts the fight in its favour.
The Board’s new management plan, particularly the dividend payout, now provides shareholders with a credible alternative to accepting YFOs’ tender offer. The payout ratio for FY23-FY25 is set at 100%. 
YFO’s primary tactic is to replace the Board at the June AGM, but shareholders have less reason to support it. Improving sentiment and the offer continue to underpin the shares. 


Toyo Construction (1890 JP): YFO Loses Ground to the Board’s New Five-Year Plan

<ul>
<li>Two weeks ago, <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> released a new Mid-Term Management Plan with a new investment plan, and a new capital plan (100% payout, ¥50/share minimum div til Mar-2026).</li>
<li>Obvious goal: get the stock above ¥1,000/share so YFO's ¥1,000 bid looks unattractive. Then they attacked on a FEFTA basis, saying YFO's foreign entities need permission to go over 10%.</li>
<li>Now Toyo has released a March 2024 forecast, with a ¥63/share dividend and 105% guided payout. The stock popped. LOTS of shares trading. Now only up small. </li>
</ul>


Two weeks ago, Toyo Construction (1890 JP) released a new Mid-Term Management Plan with a new investment plan, and a new capital plan (100% payout, ¥50/share minimum div til Mar-2026).
Obvious goal: get the stock above ¥1,000/share so YFO's ¥1,000 bid looks unattractive. Then they attacked on a FEFTA basis, saying YFO's foreign entities need permission to go over 10%.
Now Toyo has released a March 2024 forecast, with a ¥63/share dividend and 105% guided payout. The stock popped. LOTS of shares trading. Now only up small. 


Toyo Construction FY23 Profit Forecast - 105% Payout = 6.5%, Lots of Shares Changing Hands

<ul>
<li>YFO continues its fight on Board governance. Toyo Construction has shifted so the Board and a Special Committee will now examine the input Toyo says YFO has not provided. </li>
<li>Toyo also objected because it said YFO's bid could not be sustained based on Toyo's economics. Toyo's fight should have been offence. With a new Medium-Term Management Plan, it is.</li>
<li>Toyo now promises strong revenue and double digit OP growth, and a ¥50/share (5.3%) dividend. Toyo is trying to pay off shareholders to support it against YFO. That's fair/good.</li>
</ul>


YFO continues its fight on Board governance. Toyo Construction has shifted so the Board and a Special Committee will now examine the input Toyo says YFO has not provided. 
Toyo also objected because it said YFO's bid could not be sustained based on Toyo's economics. Toyo's fight should have been offence. With a new Medium-Term Management Plan, it is.
Toyo now promises strong revenue and double digit OP growth, and a ¥50/share (5.3%) dividend. Toyo is trying to pay off shareholders to support it against YFO. That's fair/good.


Toyo Construction (1890) Plays Offence - A New Mid-Term Mgmt Plan with High Shareholder Payout

<ul>
<li>
<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> will set up a special committee to evaluate YFO’s JPY1,100 offer. The Board will decide “<em>after respecting the content of the decision of the special committee.</em>”</li>
<li>YFO rightly points out the special committee is a ruse and is an attempt by the Board to demonstrate 'a fair process' for the predictable decision to reject its proposal.</li>
<li>The Board’s anxious move shows that protracted conflict is shifting in favour of YFO. At the last close, the gross spread to the tender offer is 10.3%.  </li>
</ul>



Toyo Construction (1890 JP) will set up a special committee to evaluate YFO’s JPY1,100 offer. The Board will decide “after respecting the content of the decision of the special committee.”
YFO rightly points out the special committee is a ruse and is an attempt by the Board to demonstrate 'a fair process' for the predictable decision to reject its proposal.
The Board’s anxious move shows that protracted conflict is shifting in favour of YFO. At the last close, the gross spread to the tender offer is 10.3%.  


Toyo Construction (1890 JP): The Board Uses the Smokescreen of a Special Committee

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)

JAPAN GOVERNANCE CHANGES II - Who Could Surprise on Buybacks? Quant Rankings

JAPAN GOVERNANCE: There is a buyback story coming. It will be big. Bigger than the past year or two, and it will continue. What to buy?

Travis Lundy

Toyo Construction (1890 JP): YFO Loses Ground to the Board’s New Five-Year Plan

YFO has inadvertently forced the Board to announce plans to improve shareholder returns, helping to narrow the spread of its offer to 3.4%....

Arun George

Toyo Construction FY23 Profit Forecast - 105% Payout = 6.5%, Lots of Shares Changing Hands

In Japan one doesn't usually officially announce the next FY's earnings + dividend forecast before the just-ended year is finalised. Toyo did. ¥63...

Travis Lundy

Toyo Construction (1890) Plays Offence - A New Mid-Term Mgmt Plan with High Shareholder Payout

Toyo Construction has just done the first new thing in a year to combat unwelcome advances from YFO. It has lifted its dividend/payout....

Travis Lundy

Toyo Construction (1890 JP): The Board Uses the Smokescreen of a Special Committee

The Board’s anxious move shows that protracted conflict is shifting in favour of YFO. YFO will continue to seek to revamp the Board at the June...

Arun George

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