Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today after the close with <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> reporting earnings, <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> announced a Partial Tender Offer to buy 81.21-83.31mm shares of Benefit One at ¥1600/share.</li>
<li>That cleans out Pasona, which owns 81.21mm shares. Or does it... Shareholder structure dynamics and the problems they cause later bear some detailed examination. </li>
<li>This one is going to be a fun special sit.</li>
</ul>


Today after the close with Benefit One Inc (2412 JP) reporting earnings, M3 Inc (2413 JP) announced a Partial Tender Offer to buy 81.21-83.31mm shares of Benefit One at ¥1600/share.
That cleans out Pasona, which owns 81.21mm shares. Or does it... Shareholder structure dynamics and the problems they cause later bear some detailed examination. 
This one is going to be a fun special sit.


Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> reported 2QFY03/2023 results on Friday. Revenues increased 3.0YoY while OP decreased 7.1% YoY, both revenues and OP fell below consensus estimates by 0.2% and 4.7% respectively.</li>
<li>Medical Platform’s earnings continue to deteriorate while we are yet to see a meaningful improvement in overseas segment’s earnings to drive the next phase of growth for m3.</li>
<li>Given continued decrease in profits, we think the company will struggle to meet its full-year guidance suggesting there is further downside to m3's share price.  </li>
</ul>



M3 Inc (2413 JP) reported 2QFY03/2023 results on Friday. Revenues increased 3.0YoY while OP decreased 7.1% YoY, both revenues and OP fell below consensus estimates by 0.2% and 4.7% respectively.
Medical Platform’s earnings continue to deteriorate while we are yet to see a meaningful improvement in overseas segment’s earnings to drive the next phase of growth for m3.
Given continued decrease in profits, we think the company will struggle to meet its full-year guidance suggesting there is further downside to m3's share price.  


M3: Margins Continue to Dip and Likely to Miss Full Year Guidance

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jmdc-inc" target="_blank" data-smartkarma-citation="entities:28673:1" rel="noopener">JMDC (4483 JP)</a> announced a partial tender offer for <a href="https://www.smartkarma.com/entities/omron-corp" target="_blank" data-smartkarma-citation="entities:15904:1" rel="noopener">Omron Corp (6645 JP)</a>, the largest shareholder. Omron aims to make JMDC a consolidated subsidiary.  </li>
<li>The offer is for a minimum of 12.0m shares (18.52% ownership ratio) and a maximum of 15.0m shares (23.08%) at JPY5,700 per share, a 22.4% premium to the undisturbed price.</li>
<li>Irrevocables (<a href="https://www.smartkarma.com/entities/noritsu-koki-co-ltd" target="_blank" data-smartkarma-citation="entities:3091:1" rel="noopener">Noritsu Koki (7744 JP)</a>) represent a 13.63% ownership ratio. While the offer is light, it will likely succeed as the minimum acceptance condition requires a 7.1% minority acceptance rate. </li>
</ul>



JMDC (4483 JP) announced a partial tender offer for Omron Corp (6645 JP), the largest shareholder. Omron aims to make JMDC a consolidated subsidiary.  
The offer is for a minimum of 12.0m shares (18.52% ownership ratio) and a maximum of 15.0m shares (23.08%) at JPY5,700 per share, a 22.4% premium to the undisturbed price.
Irrevocables (Noritsu Koki (7744 JP)) represent a 13.63% ownership ratio. While the offer is light, it will likely succeed as the minimum acceptance condition requires a 7.1% minority acceptance rate. 


JMDC (4483 JP): Omron’s Partial Tender Offer

<ul>
<li>
<a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> reported 1QFY03/2024 results on Friday. Revenue increased 0.7% YoY to ¥57.4bn (vs consensus ¥58.1bn) while OP decreased 3.7% YoY to ¥18.0bn (vs consensus ¥18.1bn).</li>
<li>Overseas revenue growth further slowed down to 5.3% despite the company expecting overseas business growth to help offset slowdown in pharma marketing business going forward.</li>
<li>This proves that m3’s long list of M&amp;A’s have not been really successful as we have not observed any meaningful growth from these new acquisitions.</li>
</ul>



M3 Inc (2413 JP) reported 1QFY03/2024 results on Friday. Revenue increased 0.7% YoY to ¥57.4bn (vs consensus ¥58.1bn) while OP decreased 3.7% YoY to ¥18.0bn (vs consensus ¥18.1bn).
Overseas revenue growth further slowed down to 5.3% despite the company expecting overseas business growth to help offset slowdown in pharma marketing business going forward.
This proves that m3’s long list of M&amp;A’s have not been really successful as we have not observed any meaningful growth from these new acquisitions.


M3: Weak Earnings and Overseas Business Further Slows Down

<ul>
<li>M3’s share price dropped around 9% after 4QFY03/2023 earnings, however, it went up by more than 8% since then following the announcement regarding the acquisition of Kantar’s healthcare research businesses.</li>
<li>Our estimates suggest that new acquisition would not contribute to any meaningful growth in the near term. Despite having large no. of M&amp;A deals, growth rates have started to fall.</li>
<li>We think there is further downside to <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> 's consensus FY+2 earnings estimates and we would recommend shorting the stock.</li>
</ul>


M3’s share price dropped around 9% after 4QFY03/2023 earnings, however, it went up by more than 8% since then following the announcement regarding the acquisition of Kantar’s healthcare research businesses.
Our estimates suggest that new acquisition would not contribute to any meaningful growth in the near term. Despite having large no. of M&amp;A deals, growth rates have started to fall.
We think there is further downside to M3 Inc (2413 JP) 's consensus FY+2 earnings estimates and we would recommend shorting the stock.


M3: Growth Slowing Down Despite Long List of M&As Continuing

Japan

M3, Inc. supplies medical information services for doctors through the Internet. The Company also supports marketing of pharmaceutical companies and medical equipment manufacturers.

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M3 Inc (2413 JP)

Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

Investors have pestered Pasona to bail on Benefit One for years. Now down 80% from highs two years ago, it is doing so. M3 is launching a tender to...

Travis Lundy

M3: Margins Continue to Dip and Likely to Miss Full Year Guidance

m3's 2Q revenues and OP fell below consensus estimates. Medical Platform's growth continues to decline while there was no meaningful improvement...

Shifara Samsudeen, FCMA, CGMA

JMDC (4483 JP): Omron’s Partial Tender Offer

While the offer is light, it will succeed as the minimum acceptance condition requires a low 7.1% minority acceptance rate. The tender offer runs...

Arun George

M3: Weak Earnings and Overseas Business Further Slows Down

1QFY24 earnings below consensus. Overseas revenue growth has dropped to mid-singles despite m3 having an extended list of M&As. With pharma mktg...

Shifara Samsudeen, FCMA, CGMA

M3: Growth Slowing Down Despite Long List of M&As Continuing

m3's shares have been up 8% the last few weeks and the company also announced acquisition of Kantar's healthcare assets. Despite having a long list...

Shifara Samsudeen, FCMA, CGMA

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52-week Range

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Big M3 (2413) Partial TOB As Pasona Sells Control of Benefit One (2412): Really Interesting Dynamics

Investors have pestered Pasona to bail on Benefit One for years. Now down 80% from highs two years ago, it is doing so. M3 is launching a tender to...

Travis Lundy

M3: Margins Continue to Dip and Likely to Miss Full Year Guidance

​m3's 2Q revenues and OP fell below consensus estimates. Medical Platform's growth continues to decline while there was no meaningful improvement...

Shifara Samsudeen, FCMA, CGMA

JMDC (4483 JP): Omron’s Partial Tender Offer

While the offer is light, it will succeed as the minimum acceptance condition requires a low 7.1% minority acceptance rate. The tender offer runs...

Arun George

M3: Weak Earnings and Overseas Business Further Slows Down

1QFY24 earnings below consensus. Overseas revenue growth has dropped to mid-singles despite m3 having an extended list of M&As. With pharma mktg...

Shifara Samsudeen, FCMA, CGMA

M3: Growth Slowing Down Despite Long List of M&As Continuing

m3's shares have been up 8% the last few weeks and the company also announced acquisition of Kantar's healthcare assets. Despite having a long list...

Shifara Samsudeen, FCMA, CGMA

m3's 2Q revenues and OP fell below consensus estimates. Medical Platform's growth continues to decline while there was no meaningful improvement...