Listed Real Estate Asia, KT Capital Group

Jacob Cheng

Listed Real Estate Asia

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

<ul>
<li>With HK/China continue to see risk-off sentiment; we switch our focus to Japan.  Nikkei is up 19% YTD, one of the best performing markets in the world</li>
<li>Among Japan real estate names, Mitsui Fudosan is a well held name with the largest market cap.  8801 is up 45% YTD while 8802 is up 57% YTD</li>
<li>Valuation is un-demanding, it is an interesting name to own if investors want exposure to Japan.  It is still not too late to chase the rally</li>
</ul>


With HK/China continue to see risk-off sentiment; we switch our focus to Japan.  Nikkei is up 19% YTD, one of the best performing markets in the world
Among Japan real estate names, Mitsui Fudosan is a well held name with the largest market cap.  8801 is up 45% YTD while 8802 is up 57% YTD
Valuation is un-demanding, it is an interesting name to own if investors want exposure to Japan.  It is still not too late to chase the rally


8801: Mitsui Fudosan – the Largest Japan RE Developer – Let the Rally Continue

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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. Mitsui responds.</li>
<li>Lawrence Ho is buying <a href="https://www.smartkarma.com/entities/melco-international-development-ltd" target="_blank" data-smartkarma-citation="entities:809:1" rel="noopener">Melco(200 HK)</a>. While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.</li>
<li>Avoid being long <a href="https://www.smartkarma.com/entities/aozora-bank-ltd" target="_blank" data-smartkarma-citation="entities:6483:1" rel="noopener">Aozora Bank Ltd (8304 JP)</a> vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.</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. Mitsui responds.
Lawrence Ho is buying Melco(200 HK). While it often pays to follows where the family invests, Melco is trading too tight for what is a simple holding company structure.
Avoid being long Aozora Bank Ltd (8304 JP) vs the Banks Index, a portfolio of other cheaper banks, etc. Minimal/negligible upside in following Murakami-san here. And Activism on Banks is difficult.


Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

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

<ul>
<li>The FT carries an article this AM saying Elliott Management have built 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 has asked it to undertake measures to increase ROE.</li>
<li>Measures requested apparently include a very large buyback and a demand the company sell down its stake in <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>. The <a href="https://www.ft.com/content/ab5039ec-b135-4043-8645-c1b2f68f2ba0" target="_blank" rel="noopener">article</a> is worth reading.  </li>
<li>Shares are up sharply on this news. The fund was in the news last year about this time regarding <a href="https://www.smartkarma.com/entities/dai-nippon-printing-co-ltd" target="_blank" data-smartkarma-citation="entities:19388:1" rel="noopener">Dai Nippon Printing (7912 JP)</a>. I'd expect more noise to come. </li>
</ul>


The FT carries an article this AM saying Elliott Management have built a stake in Mitsui Fudosan (8801 JP) and has asked it to undertake measures to increase ROE.
Measures requested apparently include a very large buyback and a demand the company sell down its stake in Oriental Land (4661 JP). The article is worth reading.  
Shares are up sharply on this news. The fund was in the news last year about this time regarding Dai Nippon Printing (7912 JP). I'd expect more noise to come. 


JAPAN ACTIVISM:  Activist Elliott Takes on Mitsui Fudosan (8801)

Japan Hotel Reit Investment / Equity Bottom-Up

<ul>
<li>USDJPY is breaking 154, almost 20-year high.  In general, weaker Yen is positive for investment in real estate as properties look cheaper from a foreign investor perspective</li>
<li>Yen weakness is also positive to tourism in Japan, as weak currency will drive tourist arrival and boost tourism</li>
<li>We like Japan Hotel REIT on the back of attractive valuation and weaker Yen.  We also like other Japan RE names like 8801 and 8802</li>
</ul>


USDJPY is breaking 154, almost 20-year high.  In general, weaker Yen is positive for investment in real estate as properties look cheaper from a foreign investor perspective
Yen weakness is also positive to tourism in Japan, as weak currency will drive tourist arrival and boost tourism
We like Japan Hotel REIT on the back of attractive valuation and weaker Yen.  We also like other Japan RE names like 8801 and 8802


Short Note: USDJPY Breaking 154: Positive for RE, Buy Japan Hotel REIT, Buy Japan RE

Japan

Mitsui Fudosan Co., Ltd. provides overall real estate services such as leasing, subdivision, construction, sales, and maintenance of office buildings and residential houses.  The Company also manufactures building materials, operates commercial facilities including hotels and golf places, and provides financial services such as securitization of real estate properties.

Mitsui Fudosan (8801 JP)

8801: Mitsui Fudosan – the Largest Japan RE Developer – Let the Rally Continue

While HK/CN market continue to be risk-off, we switch our focus to Japan RE. 8801 and 8802 are up 45% and 57% respectively. Valuation is un...

Jacob Cheng

Last Week in Event SPACE: Mitsui Fudosan, Melco, Aozora Bank, CGN New Energy

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

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

JAPAN ACTIVISM: Activist Elliott Takes on Mitsui Fudosan (8801)

An FT article says Elliott bought 2.5+% of Mitsui Fudosan this past year. Elliott want them to sell the Oriental Land stake, and buy back ¥1trln of...

Travis Lundy

Short Note: USDJPY Breaking 154: Positive for RE, Buy Japan Hotel REIT, Buy Japan RE

USDJPY is breaking 154, almost a 20 year high. Weaker Yen is positive to Japan real estate as this drives foreign investment. It is also positive...

Jacob Cheng