Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In May 2023, <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 ¥300bn buyback program, did nothing for two months, then announced a Tender Offer Buyback to buy shares from Toyota. </li>
<li>Toyota had increased its stake years before, then KDDI bought back shares from others, so Toyota was backing its ownership down. I discussed the relationships, history, etc, <a href="https://www.smartkarma.com/insights/kddi-9433-own-share-tender-offer-toyota-to-sell-gasp" target="_blank" rel="noopener">here</a>.</li>
<li>This year, KDDI announced Friday with earnings that is buying back another large stake from Toyota. </li>
</ul>


In May 2023, KDDI Corp (9433 JP) announced a ¥300bn buyback program, did nothing for two months, then announced a Tender Offer Buyback to buy shares from Toyota. 
Toyota had increased its stake years before, then KDDI bought back shares from others, so Toyota was backing its ownership down. I discussed the relationships, history, etc, here.
This year, KDDI announced Friday with earnings that is buying back another large stake from Toyota. 


KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!) Redux (Another Buyback in H2 Possible)

David Blennerhassett

<ul>
<li>There is <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a> buyback risk that might cause <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a>/JPB unwinds; though probably a H2 risk.</li>
<li>
<a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a> has consistently traded through <a href="https://www.smartkarma.com/entities/oversea-chinese-banking-corp" target="_blank" data-smartkarma-citation="entities:114:1" rel="noopener">OCBC (OCBC SP)</a>'s Offer terms. Someone appears to be accumulating a stake to block an Exit/Delisting Offer, and force a bump.</li>
<li>
<a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a>'s scrip pre-condition has been satisfied. But still the Offeror prevaricates. </li>
</ul>


There is Japan Post Bank (7182 JP) buyback risk that might cause Japan Post Holdings (6178 JP)/JPB unwinds; though probably a H2 risk.

Great Eastern Holdings (GE SP) has consistently traded through OCBC (OCBC SP)'s Offer terms. Someone appears to be accumulating a stake to block an Exit/Delisting Offer, and force a bump.

L'Occitane (973 HK)'s scrip pre-condition has been satisfied. But still the Offeror prevaricates. 


Last Week in Event SPACE: Japan Post, Great Eastern, Malaysia Airports, L'Occitane

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

<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.

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

Japan

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

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KDDI Corp (9433 JP)

Last Week in Event SPACE: Japan Post, Great Eastern, Malaysia Airports, L'Occitane

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

Lifenet: A Rejuvenated InsurTech Story in Japan

Activist investor (Effissimo Capital) has been gradually increasing and building its stake in Lifenet to 18.03% (mid-Oct) and has become the...

Alec Tseung

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

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

KDDI has just announced that it will conduct a buyback at JPY3,896/share in which Toyota Motors plans to tender 49.8m shares or just around 2.3% of...

Sumeet Singh

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KDDI (9433) - Own Share Tender Offer, Toyota To Sell (Gasp!) Redux (Another Buyback in H2 Possible)

KDDI announced bad earnings, good forecast, and a big buyback (from Toyota again). Q2 will see on-market buyback impact. KDDI is cheap vs Softbank...

Travis Lundy

Last Week in Event SPACE: Japan Post, Great Eastern, Malaysia Airports, L'Occitane

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

Lifenet: A Rejuvenated InsurTech Story in Japan

Activist investor (Effissimo Capital) has been gradually increasing and building its stake in Lifenet to 18.03% (mid-Oct) and has become the...

Alec Tseung

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

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

KDDI has just announced that it will conduct a buyback at JPY3,896/share in which Toyota Motors plans to tender 49.8m shares or just around 2.3% of...

Sumeet Singh