Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Equity Bottom-Up

<ul>
<li>Okamura trades at a PBR of 1.0 and a PER of 8.6 despite earning more than 12% return on equity.</li>
<li>Okamura’s new AI-driven warehouse automation system is a potential game-changer as it reduces costs and improves decision making for mid-sized enterprises.</li>
<li>Management’s incentives are still poorly aligned with the interests of shareholders, and their performance is well below potential.</li>
</ul>


Okamura trades at a PBR of 1.0 and a PER of 8.6 despite earning more than 12% return on equity.
Okamura’s new AI-driven warehouse automation system is a potential game-changer as it reduces costs and improves decision making for mid-sized enterprises.
Management’s incentives are still poorly aligned with the interests of shareholders, and their performance is well below potential.


Okamura (7994): Why Management Incentives Are So Important

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>There is no suggestion of precondition breach attached to <a href="https://www.smartkarma.com/entities/outsourcing-inc" target="_blank" data-smartkarma-citation="entities:7431:1" rel="noopener">Outsourcing Inc (2427 JP)</a>'s impairment losses. </li>
<li>Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral (BLD AU)</a>, with certain tendering thresholds triggering more cash.</li>
<li>
<a href="https://www.smartkarma.com/entities/itoki-corp" target="_blank" data-smartkarma-citation="entities:18032:1" rel="noopener">Itoki Corp (7972 JP)</a>'s mega ToSTNeT-3 buyback is now done.</li>
</ul>


There is no suggestion of precondition breach attached to Outsourcing Inc (2427 JP)'s impairment losses. 
Seven Group, now holding 71.6%, has returned to the well, and made a cash/scrip Offer for shares not owned in Boral (BLD AU), with certain tendering thresholds triggering more cash.

Itoki Corp (7972 JP)'s mega ToSTNeT-3 buyback is now done.


Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

Travis Lundy

<ul>
<li>As discussed in <a href="https://www.smartkarma.com/insights/itoki-7972-mammoth-buyback-coming-imminently-after-35-jump" target="_blank" data-smartkarma-citation="insights:127355" rel="noopener">Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump</a>, the company was going to do a mega ToSTNeT-3 buyback between then and end-Feb. That happened this morning.</li>
<li>The company bought back 7.966mm shares (13.96%) for ¥15.9bn. That should have cleared out the bulk of the risk of the original warrant holders who bought in 2020. But...</li>
<li>The dilution/accretion don't offset perfectly, and there is a clause suggesting how this might play out from here. But we can infer things from other data we now have.</li>
</ul>


As discussed in Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump, the company was going to do a mega ToSTNeT-3 buyback between then and end-Feb. That happened this morning.
The company bought back 7.966mm shares (13.96%) for ¥15.9bn. That should have cleared out the bulk of the risk of the original warrant holders who bought in 2020. But...
The dilution/accretion don't offset perfectly, and there is a clause suggesting how this might play out from here. But we can infer things from other data we now have.


Itoki (7972 JP) - Worth Thinking About Post Mega ToSTNeT-3 Buyback

<ul>
<li>Two days ago, Japanese manufacturer of ubiquitous office furniture <a href="https://www.smartkarma.com/entities/itoki-corp" target="_blank" data-smartkarma-citation="entities:18032:1" rel="noopener">Itoki Corp (7972 JP)</a> announced salutary <a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395377/00.pdf" target="_blank" rel="noopener">earnings</a>/<a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395479/00.pdf" target="_blank" rel="noopener">presentation</a>(J) results, new <a href="https://ssl4.eir-parts.net/doc/7972/ir_material_for_fiscal_ym2/150271/00.pdf" target="_blank" rel="noopener">MTMP</a>(E) outlines, new <a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395497/00.pdf" target="_blank" rel="noopener">shareholder return policy</a>(J), <a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395505/00.pdf" target="_blank" rel="noopener">yutai program</a>(J), <a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395514/00.pdf" target="_blank" rel="noopener">div hike</a>(J), and <a href="https://ssl4.eir-parts.net/doc/7972/tdnet/2395513/00.pdf" target="_blank" rel="noopener">buyback</a>(J). </li>
<li>It was a big day. The stock went limit up on 14 Feb and is +12% today. +25% in two days.</li>
<li>No single holder holds that much BUT the parameters tell you how this gets done. It's interesting, but it is important to read the fine print below!</li>
</ul>


Two days ago, Japanese manufacturer of ubiquitous office furniture Itoki Corp (7972 JP) announced salutary earnings/presentation(J) results, new MTMP(E) outlines, new shareholder return policy(J), yutai program(J), div hike(J), and buyback(J). 
It was a big day. The stock went limit up on 14 Feb and is +12% today. +25% in two days.
No single holder holds that much BUT the parameters tell you how this gets done. It's interesting, but it is important to read the fine print below!


Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump

Japan

ITOKI CORPORATION manufactures office furniture and equipment.  The Company also produces home furniture such as work/study desks and dining sets.  Itoki focuses on the development of its mechatronic products, including automatic sorters and automated warehouses.

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Itoki Corp (7972 JP)

Okamura (7994): Why Management Incentives Are So Important

Okamura's undervalued stock and innovative AI warehouse system have potential, but management's incentives need to be juiced up.

Michael Allen

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Itoki (7972 JP) - Worth Thinking About Post Mega ToSTNeT-3 Buyback

Itoki was to conduct a large ToSTNeT-3 buyback. They did this morning, and the largest sellers were the original warrant-holders. The data implies...

Travis Lundy

Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump

Two days ago, Itoki announced good earnings, good forecast, revised shareholder return policy, dividend surprise, dividend hike, new MTMP, and a...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Okamura (7994): Why Management Incentives Are So Important

​Okamura's undervalued stock and innovative AI warehouse system have potential, but management's incentives need to be juiced up.

Michael Allen

Last Week in Event SPACE: Outsourcing, Boral, Itoki, CIMC Vehicle, Dissentient Shareholder Rights

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Itoki (7972 JP) - Worth Thinking About Post Mega ToSTNeT-3 Buyback

Itoki was to conduct a large ToSTNeT-3 buyback. They did this morning, and the largest sellers were the original warrant-holders. The data implies...

Travis Lundy

Itoki (7972) Mammoth Buyback Coming Imminently After 35% Jump

Two days ago, Itoki announced good earnings, good forecast, revised shareholder return policy, dividend surprise, dividend hike, new MTMP, and a...

Travis Lundy

Okamura's undervalued stock and innovative AI warehouse system have potential, but management's incentives need to be juiced up.