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>A solution for Keisei, similar to case of parent-subsidiary listing, is cashing OLC shares to raise profitability and growth potential of its business, to eliminate the distortion in market capitalization.</li>
<li>There is a corporate governance issue in that OLC is accepting board members from Keisei, which has below 20% equity and does not clearly explain the synergies of the business.</li>
<li>This can be viewed as part of dissolving cross-shareholdings where the company wants to obtain voting advantage without business synergies and cannot find opportunities to spend the cash it sells.</li>
</ul>


A solution for Keisei, similar to case of parent-subsidiary listing, is cashing OLC shares to raise profitability and growth potential of its business, to eliminate the distortion in market capitalization.
There is a corporate governance issue in that OLC is accepting board members from Keisei, which has below 20% equity and does not clearly explain the synergies of the business.
This can be viewed as part of dissolving cross-shareholdings where the company wants to obtain voting advantage without business synergies and cannot find opportunities to spend the cash it sells.


Keisei Electric Railway's Problems Are Part of a Cross-Shareholding Dissolution Process

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

<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>9 weeks ago, the FT reported Elliott Management had a stake in <a href="https://www.smartkarma.com/entities/mitsui-fudosan-co-ltd" target="_blank" data-smartkarma-citation="entities:565:1" rel="noopener">Mitsui Fudosan (8801 JP)</a> and had asked them to sell cross-holdings and do a ¥1trln buyback. </li>
<li>The stock popped 7% the next day to ¥1302, on the highest volume since the covid crash, hesitated a day, then powered almost 20% higher through the end of March. </li>
<li>Today, Mitsui Fudosan responded with an Amendment to their Plan out to 2030. It has a higher dividend, a share buyback, higher EPS target growth, and higher ROE target. But...</li>
</ul>


9 weeks ago, the FT reported Elliott Management had a stake in Mitsui Fudosan (8801 JP) and had asked them to sell cross-holdings and do a ¥1trln buyback. 
The stock popped 7% the next day to ¥1302, on the highest volume since the covid crash, hesitated a day, then powered almost 20% higher through the end of March. 
Today, Mitsui Fudosan responded with an Amendment to their Plan out to 2030. It has a higher dividend, a share buyback, higher EPS target growth, and higher ROE target. But...


JAPAN ACTIVISM:  Mitsui Fudosan (8801) Responds to Elliott with Buyback, Amended Long-Term Plan

Singtel (Singapore Telecommunications) / Event-Driven

<ul>
<li>Even if you were an activist, or a trader with an activism tilt, be long <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> vs. <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>
<li>Reportedly, <a href="https://www.smartkarma.com/entities/singapore-telecommunications" target="_blank" data-smartkarma-citation="entities:20:1" rel="noopener">Singtel (ST SP)</a> is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. </li>
<li>
<a href="https://www.smartkarma.com/entities/alumina-ltd" target="_blank" data-smartkarma-citation="entities:939:1" rel="noopener">Alumina Ltd (AWC AU)</a> and <a href="https://www.smartkarma.com/entities/alcoa-corp" target="_blank" data-smartkarma-citation="entities:6510:1" rel="noopener">Alcoa (AA US)</a> enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?</li>
</ul>


Even if you were an activist, or a trader with an activism tilt, be long Keisei Electric Railway Co (9009 JP) vs. Oriental Land (4661 JP).
Reportedly, Singtel (ST SP) is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. 

Alumina Ltd (AWC AU) and Alcoa (AA US) enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?


Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

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)

Keisei Electric Railway's Problems Are Part of a Cross-Shareholding Dissolution Process

I would like to discuss the issues on the March 15 Nikkei article, "Keisei Electric Railway's ownership of OLC shares declines to 19.13%."

Metrical Inc

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

JAPAN ACTIVISM: Mitsui Fudosan (8801) Responds to Elliott with Buyback, Amended Long-Term Plan

Elliott Management bought Mitsui Fudosan. Argued for asset sales and buybacks. Mitsui Fudosan has responded with plans for asset sales and...

Travis Lundy

Last Week in Event SPACE: Keisei Electric /Oriental Land, SingTel, Alumina/Alcoa, Li Ning

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

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