Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Mitsubishi Logisnext Co., Ltd. / Event-Driven

<ul>
<li>A Nikkei <a href="https://asia.nikkei.com/Business/Business-deals/Japan-s-Mitsubishi-Heavy-to-sell-forklift-unit-Logisnext" target="_blank" rel="noopener">article</a> this morning several hours pre-open said that <a href="https://www.smartkarma.com/entities/mitsubishi-heavy-industries" target="_blank" data-smartkarma-citation="entities:13613:1" rel="noopener">Mitsubishi Heavy Industries (7011 JP)</a> was preparing to sell its listed forklift subsidiary <a href="https://www.smartkarma.com/entities/mitsubishi-logisnext-co-ltd" target="_blank" data-smartkarma-citation="entities:11662:1" rel="noopener">Mitsubishi Logisnext Co., Ltd. (7105 JP)</a>. </li>
<li>The story says <em>"Investors had been pressuring Mitsubishi Heavy to spin off or delist Logisnext"</em> and we know the TSE dislikes dual listings. I would have expected a buy-in but...</li>
<li>There are a number of reasons why a buyer could find this asset attractive. I suggest reading all the way through and the tone of the Conclusions.</li>
</ul>


A Nikkei article this morning several hours pre-open said that Mitsubishi Heavy Industries (7011 JP) was preparing to sell its listed forklift subsidiary Mitsubishi Logisnext Co., Ltd. (7105 JP). 
The story says "Investors had been pressuring Mitsubishi Heavy to spin off or delist Logisnext" and we know the TSE dislikes dual listings. I would have expected a buy-in but...
There are a number of reasons why a buyer could find this asset attractive. I suggest reading all the way through and the tone of the Conclusions.


Mitsubishi Logisnext (7105) - The Next Target in Logistics Space?

Japan Specialist

Mark Chadwick

Equity Bottom-Up

Kawasaki Heavy Industries / Equity Bottom-Up

<ul>
<li>The recent pull-back in the share price of KHI provides a cheap entry point into the defense spending thematic</li>
<li>KHI’s defense revenues are projected to soar by 40% to ¥406 billion in FY24, outpacing industry leader MHI's 20% growth</li>
<li>KHI and MJI to benefit from Japan’s defense spending doubling to 2% of GDP by 2027 and ¥43 trillion ($320 billion) earmarked over five years. </li>
</ul>


The recent pull-back in the share price of KHI provides a cheap entry point into the defense spending thematic
KHI’s defense revenues are projected to soar by 40% to ¥406 billion in FY24, outpacing industry leader MHI's 20% growth
KHI and MJI to benefit from Japan’s defense spending doubling to 2% of GDP by 2027 and ¥43 trillion ($320 billion) earmarked over five years. 


Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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.

Mitsubishi Heavy Industries / Equity Bottom-Up

<ul>
<li>MHI shot up 13% on U.S. election day, but dropped back this morning. A degree of optimism is warranted, but there are negatives as well as positives.</li>
<li>Full year FY-Mar-25 orders guidance has been raised, but the increase came in Energy, not Aircraft, Defense &amp; Space, and total orders are still likely to be down this year.</li>
<li>An increase in defense orders can be expected, however, as Trump forces Japan to take more responsibility for its own defense. Hold or buy for the long term.</li>
</ul>


MHI shot up 13% on U.S. election day, but dropped back this morning. A degree of optimism is warranted, but there are negatives as well as positives.
Full year FY-Mar-25 orders guidance has been raised, but the increase came in Energy, not Aircraft, Defense &amp; Space, and total orders are still likely to be down this year.
An increase in defense orders can be expected, however, as Trump forces Japan to take more responsibility for its own defense. Hold or buy for the long term.


<ul>
<li>The next leader of Japan's ruling LDP, who will almost certainly become prime minister in October, will probably not make major changes to the nation's defense policy.</li>
<li>Guidance remains unchanged after 1Q results that suggest the possibility of a better than expected order flow but also a material negative impact from a stronger yen.</li>
<li>MHI's valuation is not yet in speculative territory, but neither is it compelling. If the yen remains stable, we expect the share price to test its recent highs.</li>
</ul>


The next leader of Japan's ruling LDP, who will almost certainly become prime minister in October, will probably not make major changes to the nation's defense policy.
Guidance remains unchanged after 1Q results that suggest the possibility of a better than expected order flow but also a material negative impact from a stronger yen.
MHI's valuation is not yet in speculative territory, but neither is it compelling. If the yen remains stable, we expect the share price to test its recent highs.


MHI (7011 JP): Election Unlikely to Affect Defense Budget

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Sprott Physical Uranium Trust / Index Rebalance

<ul>
<li>Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.</li>
<li>
<a href="https://www.smartkarma.com/entities/oklo-inc" target="_blank" data-smartkarma-citation="entities:38840" rel="noopener">Oklo (OKLO US)</a> and <a href="https://www.smartkarma.com/entities/western-uranium-vanadium-corp" target="_blank" data-smartkarma-citation="entities:43774" rel="noopener">Western Uranium &amp; Vanadium (WUC CN)</a> will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.</li>
<li>There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.</li>
</ul>


Solactive has announced the constituent changes for the Global Uranium &amp; Nuclear Components Index with implementation at the close on 31 July.

Oklo (OKLO US) and Western Uranium &amp; Vanadium (WUC CN) will be added to the index. Estimated one-way turnover is 7.9% resulting in a round-trip trade of US$486m.
There are only 4 trading days to implementation of the changes and we'd watch out for big moves on stocks that have more than 2x ADV to trade.


Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

Japan

Mitsubishi Heavy Industries, Ltd. is a comprehensive heavy machinery maker. The Company manufactures machinery, ships, turbines and engines, prime movers, aircrafts, and machine parts for military and commercial use.  Mitsubishi Heavy Industries also researches and develops nuclear power plants.

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Mitsubishi Heavy Industries (7011 JP)

Mitsubishi Logisnext (7105) - The Next Target in Logistics Space?

The Nikkei carried an article this AM pre-open saying Mit Heavy was looking to sell Mitsubishi Logisnext. Forklift makers aren't having a great...

Travis Lundy

Japan Alpha | Bullish KHI (And MHI)

Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...

Mark Chadwick

MHI (7011): Trump 2.0 a Net Positive

Trump's return forces Japan to look out for number one - good for MHI, Japan's top defense contractor. Orders guidance has been raised slightly....

Scott Foster

MHI (7011 JP): Election Unlikely to Affect Defense Budget

At 28x earnings, MHI is not speculative, but neither is it cheap. We expect it to test recent highs in the run-up to the LDP party presidential...

Scott Foster

Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

The changes for the Global Uranium & Nuclear Components Index will be implemented at the close tomorrow. There is a fair bit to trade on some...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Mitsubishi Logisnext (7105) - The Next Target in Logistics Space?

The Nikkei carried an article this AM pre-open saying Mit Heavy was looking to sell Mitsubishi Logisnext. Forklift makers aren't having a great...

Travis Lundy

Japan Alpha | Bullish KHI (And MHI)

​Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...

Mark Chadwick

MHI (7011): Trump 2.0 a Net Positive

Trump's return forces Japan to look out for number one - good for MHI, Japan's top defense contractor. Orders guidance has been raised slightly....

Scott Foster

MHI (7011 JP): Election Unlikely to Affect Defense Budget

At 28x earnings, MHI is not speculative, but neither is it cheap. We expect it to test recent highs in the run-up to the LDP party presidential...

Scott Foster

Solactive Global Uranium & Nuclear Components Index Rebalance: Two Adds & US$500m Trade

The changes for the Global Uranium & Nuclear Components Index will be implemented at the close tomorrow. There is a fair bit to trade on some...

Brian Freitas

Investors can capitalize on KHI's discounted stock price for potential gains as defense revenues are expected to surge, outpacing industry leader...