Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Keisei Electric Railway Co / Event-Driven

<ul>
<li>The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including  RMB dual counters and REITs. </li>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>'s current implied stub value and simple ratio are both highly elevated.</li>
<li>A simple <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>model says "this doesn't present me with enough upside to warrant it unless I am also really bullish <a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a>."</li>
</ul>


The CSRC has announced five capital market cooperation measures for the Hong Kong Southbound Connect programs including  RMB dual counters and REITs. 

Jardine Cycle &amp; Carriage (JCNC SP)'s current implied stub value and simple ratio are both highly elevated.
A simple Keisei Electric Railway Co (9009 JP)model says "this doesn't present me with enough upside to warrant it unless I am also really bullish Oriental Land (4661 JP)."


Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>Until the "parent-subsidiary (affiliate) listing" is resolved, the value of parent company isn't  usually reflected. If Keisei has some business interest in holding OLC shares, it's responsible for explaining it.</li>
<li>If OLC shares were mostly sold, there'd be nothing left for Keisei, which couldn't find strategy for using cash, so the decision of not losing the growing affiliate isn't bad.</li>
<li>This small sale is to buy time until a clear growth strategy is found, but once the ratio of foreign shareholders exceeds 1/3, building time will likely become more difficult.</li>
</ul>


Until the "parent-subsidiary (affiliate) listing" is resolved, the value of parent company isn't  usually reflected. If Keisei has some business interest in holding OLC shares, it's responsible for explaining it.
If OLC shares were mostly sold, there'd be nothing left for Keisei, which couldn't find strategy for using cash, so the decision of not losing the growing affiliate isn't bad.
This small sale is to buy time until a clear growth strategy is found, but once the ratio of foreign shareholders exceeds 1/3, building time will likely become more difficult.


Golden Egg Was Not Lost, but How Long Can Keisei Electric Railway Buy Time?

Travis Lundy

<ul>
<li>Over two decades, <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).</li>
<li>The most recent efforts were by Palliser last fall, briefly discussed <a href="https://www.smartkarma.com/insights/keisei-electric-rail-9009-a-buyback-but-it-s-likely-to-be-crossholders-selling-in-tostnet-3" target="_blank" rel="noopener">here</a> two weeks ago when Keisei announced a buyback. </li>
<li>Today, Keisei <a href="https://contents.xj-storage.jp/xcontents/AS01810/961e9d0f/2b7a/4eef/89ba/091c3bf36d72/140120240305549065.pdf" target="_blank" rel="noopener">announced</a> (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It's pretty clear.</li>
</ul>


Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback. 
Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It's pretty clear.


Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>'s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.</li>
<li>Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Keisei Electric Railway Co (9009 JP)'s previously announced buyback is now confirmed to be a ToSTNeT-3 buyback. But also an accelerated share repurchase.
Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Keisei's ToSTNeT-3 Buyback. Stay Bearish

<ul>
<li>In late February, <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.</li>
<li>I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.</li>
<li>Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn't. But it bears watching closely, maybe acting.</li>
</ul>


In late February, Keisei Electric Railway Co (9009 JP) announced a 5.0mm share (2.96%) ¥33bn buyback, to be executed in the following 3 months. That meant likely ToSTNeT-3.
I thought that mildly bullish. Shares rose 0.05% the next day. Then we got an OLC offering announcement. I thought that bearish. The stock popped early but fell hard.
Today the announcement. It IS a ToSTNeT-3. tomorrow. At ¥6,320/share. But it is an Accelerated Share Repurchase. Which changes things. Or it doesn't. But it bears watching closely, maybe acting.


Keisei Electric (9009) Share Buyback - Interesting Dynamics & Opportunity

Japan

Keisei Electric Railway Co., Ltd. provides passenger rail and bus transportation services in the Metropolitan Tokyo and Chiba prefecture areas.  The Company operates department and supermarket stores, hotels, travel agents, movie theater and restaurants, and sells, leases, and maintains real estate.  Keisei Electric is a shareholder of Oriental Land Co., Ltd. which operates Tokyo Disneyland.

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Keisei Electric Railway Co (9009 JP)

Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

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

Golden Egg Was Not Lost, but How Long Can Keisei Electric Railway Buy Time?

I would like to discuss the issues on the March 8 Nikkei article, "Keisei Electric Railway to Sell 1% Stake in Tokyo Disney, a Compromise for...

Metrical Inc

Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

Keisei Rail today announced the offering/sale of 16+mm shares (1.0%) of Oriental Land. There will be a special div as a result. The announcement...

Travis Lundy

StubWorld: Keisei's ToSTNeT-3 Buyback. Stay Bearish

Even if you were an activist, or a trader with an activism tilt, I'd be disinclined to be long Keisei vs Oriental Land. On balance, I'm more...

David Blennerhassett

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Last Week in Event SPACE: HK Southbound, Jardine Cycle, Keisei/Oriental Land, BHP/Anglo American

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

Golden Egg Was Not Lost, but How Long Can Keisei Electric Railway Buy Time?

I would like to discuss the issues on the March 8 Nikkei article, "Keisei Electric Railway to Sell 1% Stake in Tokyo Disney, a Compromise for...

Metrical Inc

Oriental Land (4661) Placement by Keisei Rail (9009) Says "That's the Door"

Keisei Rail today announced the offering/sale of 16+mm shares (1.0%) of Oriental Land. There will be a special div as a result. The announcement...

Travis Lundy

StubWorld: Keisei's ToSTNeT-3 Buyback. Stay Bearish

Even if you were an activist, or a trader with an activism tilt, I'd be disinclined to be long Keisei vs Oriental Land. On balance, I'm more...

David Blennerhassett

Keisei Electric (9009) Share Buyback - Interesting Dynamics & Opportunity

Keisei is doing a ToSTNeT-3. Crossholders might sell, but the purpose is an ASR. Those long Keisei/Short OLC can also sell a large block of Keisei....

Travis Lundy