Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, with Q1 earnings, which I found less than great, <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.</li>
<li>The Tender Offer - at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) - goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.</li>
<li>
<a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.</li>
</ul>


Today, with Q1 earnings, which I found less than great, KDDI Corp (9433 JP) announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.
The Tender Offer - at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) - goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.

Toyota Motor (7203 JP) has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.


KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!)

<a href="https://www.smartkarma.com/entities/gree-inc" target="_blank" data-smartkarma-citation="entities:17135:1" rel="noopener">Gree Inc (3632 JP)</a> is an online media business and game developer (Switch and Facebook Messenger) and does a hodgepodge of other businesses. It has its good points, but nobody would call it a category killer or call it dominant in any way. And the stock has had a somewhat lacklustre 10 years. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/890/original/Screenshot+2021-09-30+at+9.05.23+PM.png?1633007148" class="editor-image img-responsive" data-smartkarma-image-id="232890"></figure></section>But it has its strong points, and it announced the exercise of one of those today.More below the fold.

Gree Inc (3632 JP) is an online media business and game developer (Switch and Facebook Messenger) and does a hodgepodge of other businesses. It has its good points, but nobody would call it a category killer or call it dominant in any way. And the stock has had a somewhat lacklustre 10 years. But it has its strong points, and it announced the exercise of one of those today.More below the fold.

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

Equity Bottom-Up

Lifenet Insurance Company / Equity Bottom-Up

Lifenet's management has successfully turned around the company's new business from stalling, and more initiatives are currently underway to drive its future growth.The company is still only trading at 0.8x P/EV. Although its valuation multiple is richer than the traditional life insurers in Japan, we view that it doesn't make sense for Lifenet, which had significant new business growth compared to those traditional life insurers, to trade below its EV.  The management announced its new embedded value target in the medium term. Our calculations showed a base case IRR of 21%if the company can achieve the target in 5 years.Key concerns centered around Lifenet's tech capability and profitability.

Lifenet's management has successfully turned around the company's new business from stalling, and more initiatives are currently underway to drive its future growth.The company is still only trading at 0.8x P/EV. Although its valuation multiple is richer than the traditional life insurers in Japan, we view that it doesn't make sense for Lifenet, which had significant new business growth compared to those traditional life insurers, to trade below its EV.  The management announced its new embedded value target in the medium term. Our calculations showed a base case IRR of 21%if the company can achieve the target in 5 years.Key concerns centered around Lifenet's tech capability and profitability.

Lifenet: A Rejuvenated InsurTech Story in Japan

Telco/Internet specialist

Kirk Boodry

Redex Research

<ul>
<li>Core mobile revenue fell 4% but that is an improvement from 7-8% declines over the last few quarters and including value-added sales (VAS), retail mobile spend is up</li>
<li>Competitive challenges remain with elevated churn and visible declines in roaming revenue from Rakuten (although sequential change has been modest)</li>
<li>KDDI has kept guidance for FY22 operating income growth unchanged despite unanticipated expenses for rising fuel costs and the July network failure</li>
</ul>


Core mobile revenue fell 4% but that is an improvement from 7-8% declines over the last few quarters and including value-added sales (VAS), retail mobile spend is up
Competitive challenges remain with elevated churn and visible declines in roaming revenue from Rakuten (although sequential change has been modest)
KDDI has kept guidance for FY22 operating income growth unchanged despite unanticipated expenses for rising fuel costs and the July network failure


KDDI (Buy) - Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

<ul>
<li>KDDI posted its best revenue growth since 2019 but an acceleration in power costs and expenses associated with the July network outage kept a lid on margins</li>
<li>On balance, the print is positive and management remains confident on full-year targets</li>
<li>There are sector reads from corporate sales (good), higher power costs (bad), and stable competitive intensity whilst modest erosion in roaming revenue indicates Rakuten's rebound from peak losses is modest</li>
</ul>


KDDI posted its best revenue growth since 2019 but an acceleration in power costs and expenses associated with the July network outage kept a lid on margins
On balance, the print is positive and management remains confident on full-year targets
There are sector reads from corporate sales (good), higher power costs (bad), and stable competitive intensity whilst modest erosion in roaming revenue indicates Rakuten's rebound from peak losses is modest


KDDI (Buy) - Q2 22 Results Reaction: Mixed Quarter as Power Costs Accelerate

Japan

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

KDDI Corp (9433 JP)

Greeeee... Wheeeee.....!

Gree is not a great gaming stock, and not a great online media stock. But it IS cheap. It has a huge amount of cash, and an interesting VC...

Travis Lundy

Lifenet: A Rejuvenated InsurTech Story in Japan

Lifenet, arguably the world's first pure-play InsurTech company, has managed to rejuvenate its growth in recent years. Based on its current...

Alec Tseung

KDDI (Buy) - Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

Mobile revenue erosion appears to be improving but unanticipated costs for rising fuel costs and the July network failure stand in the way of FY22...

Kirk Boodry

KDDI (Buy) - Q2 22 Results Reaction: Mixed Quarter as Power Costs Accelerate

KDDI results were mostly positive as solid revenue growth offsets a jump in power costs. Growth in corporate sales was particularly robust although...

Kirk Boodry

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!)

KDDI has announced a tender offer to fulfil 83% of their original buyback program. Toyota will sell. This looks more important, governance-wise,...

Travis Lundy

Greeeee... Wheeeee.....!

Gree is not a great gaming stock, and not a great online media stock. But it IS cheap. It has a huge amount of cash, and an interesting VC...

Travis Lundy

Lifenet: A Rejuvenated InsurTech Story in Japan

Lifenet, arguably the world's first pure-play InsurTech company, has managed to rejuvenate its growth in recent years. Based on its current...

Alec Tseung

KDDI (Buy) - Q3 22 Results Reaction: Super Mobile but Full-Year Targets Look Challenging

Mobile revenue erosion appears to be improving but unanticipated costs for rising fuel costs and the July network failure stand in the way of FY22...

Kirk Boodry

KDDI (Buy) - Q2 22 Results Reaction: Mixed Quarter as Power Costs Accelerate

KDDI results were mostly positive as solid revenue growth offsets a jump in power costs. Growth in corporate sales was particularly robust although...

Kirk Boodry