Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kyokuto-kaihatsu-kogyo-co-ltd" target="_blank" data-smartkarma-citation="entities:14390:1" rel="noopener">Kyokuto Kaihatsu Kogyo Co (7226 JP)</a> has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.</li>
<li>But it isn't fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders. </li>
<li>The company today announced a buyback - additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.</li>
</ul>



Kyokuto Kaihatsu Kogyo Co (7226 JP) has always been cash-rich. Recently there are better noises. Sold real estate. New Mid-Term Plan. Raised the payout ratio to 50%. Slowly selling crossholdings.
But it isn't fast enough, and activist Strategic Capital this spring announced a flurry of AGM agenda items to extract value for shareholders. 
The company today announced a buyback - additive, but there is a lot to look at here. Shareholder structure is key. And forward cash-flows tell you more buybacks could come.


Kyokuto Kaihatsu (7226 JP) Buyback - It's Kinda Big, But There May Be More Behind

Equity Bottom-Up

Kyokuto Kaihatsu Kogyo Co / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/kyokuto-kaihatsu-kogyo-co-ltd" target="_blank" data-smartkarma-citation="entities:14390:1" rel="noopener">Kyokuto Kaihatsu Kogyo Co (7226 JP)</a> is, and has been for a a couple of decades, a value-stock player's dream. This company makes garbage trucks, dump trucks, concrete mixer trucks, sprinkler trucks, and truck parts such as lifters, etc.  They also make multi-story metal parking frames which can be sited easily on empty lots for those who want to use land but not redevelop.</p>
<p>The company has been cash-rich and asset-rich for ages - sometimes more so, sometimes less so - and has had hidden assets to boot. </p>
<p>The stock tends to "range-trade" around a range of PBR, dipping when earnings dip and rising as people get excited about trucks. But despite being a stock which some might call a value-trap, it has done pretty well over the years. Sometimes it gets REALLY cheap. </p>
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<h3>The NEW News</h3>
<p>On March 30, the company announced the sale of one of its "hidden assets" with the contract signed today and the close expected in the fiscal year which starts April 1. </p>
<p>It is worth looking at this company just to see what else it might spit out. </p>

Kyokuto Kaihatsu Kogyo Co (7226 JP) is, and has been for a a couple of decades, a value-stock player's dream. This company makes garbage trucks, dump trucks, concrete mixer trucks, sprinkler trucks, and truck parts such as lifters, etc.  They also make multi-story metal parking frames which can be sited easily on empty lots for those who want to use land but not redevelop.
The company has been cash-rich and asset-rich for ages - sometimes more so, sometimes less so - and has had hidden assets to boot. 
The stock tends to "range-trade" around a range of PBR, dipping when earnings dip and rising as people get excited about trucks. But despite being a stock which some might call a value-trap, it has done pretty well over the years. Sometimes it gets REALLY cheap. 



The NEW News
On March 30, the company announced the sale of one of its "hidden assets" with the contract signed today and the close expected in the fiscal year which starts April 1. 
It is worth looking at this company just to see what else it might spit out. 

Japan Value:  Kyokuto Kaihatsu (7226) To Log BIG Special Profit - Governance Activism Target

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

Thematic (Sector/Industry)

<p>I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.</p><p>We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.</p><h2>Screen Results </h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/029/859/original/2.png?1500323285" class="editor-image img-responsive" data-smartkarma-image-id="29859"></figure><div class="content-caption">Source: Custom Products</div><p>As you can see from the table above…</p>

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap below ¥200bn. We then screened for names that had positive YoY quarterly growth every quarter for the last 3 years. 98 names made that list.We cut the list down to 24 names by limiting it to names that have also had positive quarterly OP  growth 12 out of the last 13 quarters.Screen Results Source: Custom ProductsAs you can see from the table above…

Japan

KYOKUTO KAIHATSU KOGYO CO., LTD. manufactures and sells a variety of special duty vehicles such as dump trucks, tank lorries, mixer trucks, and snowplows. The Company also develops environment maintenance facilities and related products including garbage collectors, pulverizers, and garbage presses.

Kyokuto Kaihatsu Kogyo Co (7226 JP)

Kyokuto Kaihatsu (7226 JP) Buyback - It's Kinda Big, But There May Be More Behind

Kyokuto Kaihatsu (7226) has been a cash-rich capital inefficient value stock. They are getting better, with less drag, but they are still cheap....

Travis Lundy

Japan Value: Kyokuto Kaihatsu (7226) To Log BIG Special Profit - Governance Activism Target

Kyokuto Kaihatsu announced yesterday it would log a large special profit on the sale of a piece of land it has owned for a long time. Laden with...

Travis Lundy

Small-Cap Growth Names in Japan....

I know we usually focus on Value in Japan, but sometimes it is worth looking for Growth names. We first limited the universe to names with mkt-cap...

Custom Products Group