Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.</p>

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Late Tuesday 16 March 2021, the Nikkei carried an article which said that today <a href="https://www.smartkarma.com/entities/imperial-hotel-ltd" target="_blank" data-smartkarma-citation="entities:18742:1" rel="noopener">Imperial Hotel (9708 JP)</a> had decided to renovate its flagship hotel Imperial Hotel Tokyo in Uchisaiwaicho, Tokyo, on the eastern side of Hibiya Park and just off what used to the southern extension of the imperial palace moat.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/194/803/original/953px-Imperial_Hotel_Tokyo.jpeg?1615895144" class="editor-image img-responsive" data-smartkarma-image-id="194803"></figure><div style="text-align: right;" class="content-caption">source: Kakidai, 29 Jan 2012 (own work)</div></section><p>This is the third iteration of the Imperial Hotel after the the last one, designed by Frank Lloyd Wright and built in 1922, replacing Yuzuru Watanabe's beautiful structure built in 1890, was taken down in 1967. The current version opened in 1970 and has stood for more than 50 years.</p><p>The article said that the company had decided to rebuild the hotel in line with ongoing redevelopment in the area, since the existing facilities were aging. The goal is to make the Imperial Hotel a central part of yet another "branded" prime location in Tokyo. An announcement is expected this month. The company <a href="https://www.imperialhotel.co.jp/j/company/pdf/20210316.pdf#zoom=100" target="_blank" rel="noopener">announced</a> late in the evening that the news shown in the media was not released by them, and while they are considering rebuilding the hotel, nothing has been decided yet. </p><p>The article says that the 31-story mixed use tower next to the current hotel will be rebuilt by 2030 and the main hotel asset will be rebuilt by 2036. </p><p>In the first nine months of this fiscal year, revenue has dropped by 62% - a dramatic drop to be sure - but not surprising given the lack of inbound tourists. The hotel has started renting out serviced apartments for those who think it would be cool to WFH in in a prime central location. </p><p>For those who are keen observers of that area of Tokyo, this is a long-awaited development. </p><p>And it behooves one to think of the possibilities. One significant possibility in my mind is that Imperial Hotel does not remain independent. </p>

Late Tuesday 16 March 2021, the Nikkei carried an article which said that today Imperial Hotel (9708 JP) had decided to renovate its flagship hotel Imperial Hotel Tokyo in Uchisaiwaicho, Tokyo, on the eastern side of Hibiya Park and just off what used to the southern extension of the imperial palace moat.source: Kakidai, 29 Jan 2012 (own work)This is the third iteration of the Imperial Hotel after the the last one, designed by Frank Lloyd Wright and built in 1922, replacing Yuzuru Watanabe's beautiful structure built in 1890, was taken down in 1967. The current version opened in 1970 and has stood for more than 50 years.The article said that the company had decided to rebuild the hotel in line with ongoing redevelopment in the area, since the existing facilities were aging. The goal is to make the Imperial Hotel a central part of yet another "branded" prime location in Tokyo. An announcement is expected this month. The company announced late in the evening that the news shown in the media was not released by them, and while they are considering rebuilding the hotel, nothing has been decided yet. The article says that the 31-story mixed use tower next to the current hotel will be rebuilt by 2030 and the main hotel asset will be rebuilt by 2036. In the first nine months of this fiscal year, revenue has dropped by 62% - a dramatic drop to be sure - but not surprising given the lack of inbound tourists. The hotel has started renting out serviced apartments for those who think it would be cool to WFH in in a prime central location. For those who are keen observers of that area of Tokyo, this is a long-awaited development. And it behooves one to think of the possibilities. One significant possibility in my mind is that Imperial Hotel does not remain independent. 

Imperial Hotel (9708) - Redevelopment Might Hide an LBO Story

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div style="text-align: center;"><strong>• NET GAIN • </strong></div><div><div class="content-caption">
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/590/original/2021-02-19_07-20-52.png?1613686864" class="editor-image img-responsive" data-smartkarma-image-id="189590"></figure><p></p></section> Source for all charts &amp; tables: Japan Analytics</div></div><div>
<p><strong>NET GAIN</strong> - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/591/original/2021-02-19_07-29-59.png?1613687413" class="editor-image img-responsive" data-smartkarma-image-id="189591"></figure></section><p><strong>TRAILING TWELVE MONTHS (TTM)</strong> - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/595/original/2021-02-19_07-38-34.png?1613687927" class="editor-image img-responsive" data-smartkarma-image-id="189595"></figure></section><p><strong>FORECASTS</strong> - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. </p>
</div><section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/596/original/2021-02-19_07-40-09.png?1613688021" class="editor-image img-responsive" data-smartkarma-image-id="189596"></figure><hr></section><p><strong>POSITIVE MOMENTUM</strong> - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   </p></section><div></div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/597/original/2021-02-19_08-02-24.png?1613689355" class="editor-image img-responsive" data-smartkarma-image-id="189597"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/694/original/2021-02-19_16-02-06.png?1613718138" class="editor-image img-responsive" data-smartkarma-image-id="189694"></figure><hr></section><p><strong>SECTOR BREAKDOWN</strong> - The leading sectors in terms of one-month change in Results &amp; Revision Score are <strong>Other Commercial Products</strong>, <strong>Autos</strong>,<strong> Other Consumer Products</strong>, <strong>Metals</strong>, and <strong>Building Materials.</strong> The RRS 'losers' are <strong>Utilities</strong>, <strong>Internet Content &amp; Services</strong>, <strong>Food, Beverages &amp; Tobacco,</strong><strong>Retail</strong>, and <strong>Healthcare</strong>.  </p>
</div><div>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/700/original/2021-02-19_16-05-32.png?1613718344" class="editor-image img-responsive" data-smartkarma-image-id="189700"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/189/701/original/2021-02-19_16-06-12.png?1613718383" class="editor-image img-responsive" data-smartkarma-image-id="189701"></figure></section><hr>
</div><section></section><div><div>
<p>In the <strong>DETAIL</strong> section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.</p>
<hr>
<p></p>
</div></div>

• NET GAIN • 
 Source for all charts &amp; tables: Japan Analytics
NET GAIN - Forecast Aggregate Net Income for the universe of  Japanese listed companies ended the quarter 23.8%  higher than three months ago - an increase of  ¥5.2 trillion. As a result, the market's forward earnings multiple has declined to 28 times following a 10% increase in total market value (ex REITs). The increase in forecast operating income is a more modest 10.2% reflecting the degree of previously-projected COVID-related extraordinary losses.
TRAILING TWELVE MONTHS (TTM) - Trailing revenues and operating profits are still falling by 9.9% and 26.3%, respectively; however, operating income rose by 4.1% quarter-on-quarter as margins improved by 30 basis points. Despite a reasonable effort at cost-cutting, aggregate operating margins are still  228 bps below their mid-2018 peak, and it will take at least another eight quarters for that gap to be closed.
FORECASTS - The majority of companies are forecasting for the year ending next month. Despite no change in the aggregate revenue forecast, the outlook for operating income increased by ¥3.7 trillion during the quarter resulting in a 50 bps operating margin uplift. 
POSITIVE MOMENTUM - Both our forward-looking Results Score and Results &amp; Revision Score have returned to the positive after less than one year. Whether this merits a new thirty-year high in TOPIX is, however, a moot point. We would note that the Cabinet Office Leading Indicator of Business Conditions for December turned down for the first time since April 2020.   
SECTOR BREAKDOWN - The leading sectors in terms of one-month change in Results &amp; Revision Score are Other Commercial Products, Autos, Other Consumer Products, Metals, and Building Materials. The RRS 'losers' are Utilities, Internet Content &amp; Services, Food, Beverages &amp; Tobacco,Retail, and Healthcare.  



In the DETAIL section below, we shall review the actual results and initial and revised forecasts by Sector and highlight the best and worst-performing companies by one-quarter revenue and margin changes.




🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

<p style="text-align: center;"><strong>• THE POST-COVID ROTATION •</strong></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/193/original/2021-02-06_10-51-22.png?1612670102" class="editor-image img-responsive" data-smartkarma-image-id="187193"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/194/original/2021-02-06_10-51-43.png?1612670115" class="editor-image img-responsive" data-smartkarma-image-id="187194"></figure><div class="content-caption"> Source for all charts &amp; tables: Japan Analytics</div></section><p><strong>THE 2021 ROTATION BEGINS</strong> -  For most of the last year, the Japanese equity market has been led by overvalued and overbought high-quality growth companies in the <strong>Technology Hardware</strong>, <strong>Electrical Equipment</strong>, <strong>Internet</strong>, and <strong>Healthcare</strong> Sectors. These companies were deemed to be COVID-resistant and were consistently well-bid regardless of price. The stock leading this ''charge' were <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> +163%, <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> +151%, <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO (3064 JP)</a> +108%, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway (3769 JP)</a> +110%, and <a href="https://www.smartkarma.com/entities/nidec-corp" target="_blank" data-smartkarma-citation="entities:7245:1" rel="noopener">Nidec (6594 JP)</a> +97%. The only deep cyclical Sector that saw a significant recovery was <strong>Energy</strong>. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows.</p><p></p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/199/original/2021-02-06_10-52-30.png?1612678419" class="editor-image img-responsive" data-smartkarma-image-id="187199"></figure></section><p><strong>THE VALUE RENAISSANCE</strong> - Over the last four weeks, however, a major shift in market sentiment has occurred as profit-taking in the former 'Quality-At-Any-Price' group has coincided with a significant rally in the latter 'Deep-Value' group. In terms of our Relative Price Score, the best-performing Sectors over the last month have been <strong>Media</strong>,<strong> Telecommunications</strong>, <strong>Restaurants</strong>, <strong>Building Material</strong>s, and <strong>Consumer Services</strong>. The best-performing larger caps have included <a href="https://www.smartkarma.com/entities/west-japan-railway-co" target="_blank" data-smartkarma-citation="entities:12077:1" rel="noopener">West Japan Railway (9021 JP)</a> +26%, <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu (4324 JP)</a> +25%, <a href="https://www.smartkarma.com/entities/create-restaurants-holdings-inc" target="_blank" data-smartkarma-citation="entities:11513:1" rel="noopener">create restaurants (3387 JP)</a> +61%. With the second State of Emergency having capped Japan's third COVID wave and a vaccination programme likely to start next month, the market is discounting a post-COVID economic normalisation. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/216/original/2021-02-07_17-08-33.png?1612685331" class="editor-image img-responsive" data-smartkarma-image-id="187216"></figure></section><p><strong>RESULTS &amp; REVISION-DRIVEN</strong> - This change in market direction is also reflected in our earnings momentum scoring methodology - the Results &amp; Revision Score. Although only one-third of listed companies have reported mostly third-quarter results, the trends are broadly supportive of the current rotation. Cyclical and domestic Sectors such as <strong>Metals</strong>, <strong>Media</strong>, <strong>Consumer Services</strong>, <strong>Wholesale</strong>, <strong>Transport</strong>, and<strong> Real Estate</strong> are 'outperforming' the market's average earnings momentum, while the I<strong>nternet</strong>, <strong>Healthcare</strong>,<strong> Commerical Services</strong>, and <strong>Energy</strong> are lagging.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/306/original/2021-02-08_05-28-53.png?1612729747" class="editor-image img-responsive" data-smartkarma-image-id="187306"></figure><p><strong>TRAILING &amp; FORECAST EARNINGS BOTTOM</strong><strong>OUT</strong> -  While our scoring methodology is more forward-looking, the results and forecasts announced to date confirm that the economy bottomed out in the fourth calendar quarter of last year. With aggregate market capitalisation (ex REITs) close to a new long-term high, at least one year of earnings recovery has already been discounted.</p></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/227/original/2021-02-06_12-20-31.png?1612688721" class="editor-image img-responsive" data-smartkarma-image-id="187227"></figure></section><p></p><div>
<hr>
<p style="text-align: center;"><strong>• RESULTS &amp; REVISIONS SUMMARY - 5th FEBRUARY •</strong></p>
</div><div><p>Of Friday's 331 results announcements, 71% scored positively for earnings momentum despite trailing revenues falling by 3.8% on average. Operating margins rose by 90 basis points. 11% of companies were in the red for the quarter.  66% of the 134 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.6 points.</p></div><div>
<p style="text-align: center;"><strong>• BEST &amp; WORST •</strong></p>
<p style="text-align: left;">Friday's 'best' pair of larger-cap companies is <a href="https://www.smartkarma.com/entities/agc-inc" target="_blank" data-smartkarma-citation="entities:2167:1" rel="noopener">AGC (5201 JP)</a> and <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>, while the worst two announcements came from <a href="https://www.smartkarma.com/entities/fuji-heavy-industries-ltd" target="_blank" data-smartkarma-citation="entities:5439:1" rel="noopener">Subaru (7270 JP)</a> and the overvalued and overbought <a href="https://www.smartkarma.com/entities/daifuku-co-ltd" target="_blank" data-smartkarma-citation="entities:10408:1" rel="noopener">Daifuku (6383 JP)</a>.   For more, see the <strong>DETAIL</strong> section below.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/304/original/2021-02-08_05-26-25.png?1612729598" class="editor-image img-responsive" data-smartkarma-image-id="187304"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/305/original/2021-02-08_05-27-07.png?1612729640" class="editor-image img-responsive" data-smartkarma-image-id="187305"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/307/original/2021-02-08_05-31-32.png?1612729905" class="editor-image img-responsive" data-smartkarma-image-id="187307"></figure></section><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/187/308/original/2021-02-08_05-32-44.png?1612729980" class="editor-image img-responsive" data-smartkarma-image-id="187308"></figure></section><p></p>
</div>

• THE POST-COVID ROTATION • Source for all charts &amp; tables: Japan AnalyticsTHE 2021 ROTATION BEGINS -  For most of the last year, the Japanese equity market has been led by overvalued and overbought high-quality growth companies in the Technology Hardware, Electrical Equipment, Internet, and Healthcare Sectors. These companies were deemed to be COVID-resistant and were consistently well-bid regardless of price. The stock leading this ''charge' were M3 Inc (2413 JP) +163%, Lasertec (6920 JP) +151%, MonotaRO (3064 JP) +108%, GMO Payment Gateway (3769 JP) +110%, and Nidec (6594 JP) +97%. The only deep cyclical Sector that saw a significant recovery was Energy. Meanwhile, shares in domestically-orientated Sectors and companies heavily exposed to COVID-related delines in business activity languished despite valuations reaching ten or twenty-year lows.THE VALUE RENAISSANCE - Over the last four weeks, however, a major shift in market sentiment has occurred as profit-taking in the former 'Quality-At-Any-Price' group has coincided with a significant rally in the latter 'Deep-Value' group. In terms of our Relative Price Score, the best-performing Sectors over the last month have been Media, Telecommunications, Restaurants, Building Materials, and Consumer Services. The best-performing larger caps have included West Japan Railway (9021 JP) +26%, Dentsu (4324 JP) +25%, create restaurants (3387 JP) +61%. With the second State of Emergency having capped Japan's third COVID wave and a vaccination programme likely to start next month, the market is discounting a post-COVID economic normalisation. RESULTS &amp; REVISION-DRIVEN - This change in market direction is also reflected in our earnings momentum scoring methodology - the Results &amp; Revision Score. Although only one-third of listed companies have reported mostly third-quarter results, the trends are broadly supportive of the current rotation. Cyclical and domestic Sectors such as Metals, Media, Consumer Services, Wholesale, Transport, and Real Estate are 'outperforming' the market's average earnings momentum, while the Internet, Healthcare, Commerical Services, and Energy are lagging.TRAILING &amp; FORECAST EARNINGS BOTTOMOUT -  While our scoring methodology is more forward-looking, the results and forecasts announced to date confirm that the economy bottomed out in the fourth calendar quarter of last year. With aggregate market capitalisation (ex REITs) close to a new long-term high, at least one year of earnings recovery has already been discounted.

• RESULTS &amp; REVISIONS SUMMARY - 5th FEBRUARY •
Of Friday's 331 results announcements, 71% scored positively for earnings momentum despite trailing revenues falling by 3.8% on average. Operating margins rose by 90 basis points. 11% of companies were in the red for the quarter.  66% of the 134 annual forecasts/revision announcements scored positively, and the average Forecast/Revision score was +2.6 points.
• BEST &amp; WORST •
Friday's 'best' pair of larger-cap companies is AGC (5201 JP) and Mitsui Fudosan (8801 JP), while the worst two announcements came from Subaru (7270 JP) and the overvalued and overbought Daifuku (6383 JP).   For more, see the DETAIL section below.



🇯🇵 JAPAN • The Post-COVID Rotation from Growth to Value Begins + 02/05 Results & Revisions Update

David Blennerhassett

China Traditional Chinese Medicine / Event-Driven



For the month of January, 22 new deals were discussed on Smartkarma with an overall announced deal size of ~US$52bn.


Clicking on the company name in the table below will take you to the entity page where you can read the initial insight(s) written by Smartkarma contributors on these new deals and follow up discussions, or simply click on the insight link(s) below the name.





New Deals


Industry


Size (US$bn)


Type


Premium




Australia




Bingo Industries (BIN AU) 
Waste collection
1.8
Scheme
19.8%



Bingo Industries (ASX: BIN): Talking Trash
Bingo Industries (BIN AU): CPE/MIRA's Scavenger Hunt




Hong Kong




China Machinery Engineering (1829 HK) 
Construction
0.4
Merger by Absorption
45.1%



China Machinery Engineering (1829 HK): Possible Offer
China Machinery Engineering (1829 HK): Delisting Offer From Parent




Polytec Asset Holdings (208 HK) 
Real Estate
0.4
Scheme
61.3%


Polytec Asset (208 HK): Offer By Way Of A Scheme



HKC Holdings (190 HK) 
Holding Co.
0.2
Scheme
120.39%



China Renewable Energy (987 HK): Possible Privatisation Offer
HKC (190 HK): Take-Private Offer By Way Of A Scheme




New Century REIT (1275 HK) 
Hospitality
0.25
Scheme-like
14.3%


New Century (1275 HK): Closing Down Sale



Rivera Holdings (281 HK) 
Real estate
0.1
Scheme
62.5%


Rivera (281 HK): Scheme Or Face Delisting



China Traditional Chinese (570 HK) 
TCM
3.0
??
??


Trad Chi Med (570 HK): Sinopharm's Feverish Proposal



Zhejiang New Century Hotel (1158 HK) 
Hospitality
0.65
Merger by Absorption
24.7%


Zhejiang New Century (1158 HK): Pre-Conditional Offer



Zhuhai Holdings Investment (908 HK) 
Ports
0.2
Scheme
37.8%


Zhuhai Holdings (908 HK): Zhuhai SASAC Reloads With Scheme Offer



India




Engineers India (ENGR IN) 
Engineering
0.1
Buyback tender
10%


Hefty Engineers India Buyback Tender - Worth The Arb If You Own



Japan




Tokyo Rope Mfg (5981 JP) 
Wire rope
0.2
Partial
39%



Nippon Steel's HOSTILE Partial Tender Offer for Tokyo Rope: A Move to Mark Territory?
New Money for Old Rope? Gaming Out A Hostile Partial Offer on Tokyo Rope (5981)




Singapore




CEI Limited (CEI SP) 
Electronics
0.1
VGO
16.2%


CEI Limited (CEI SP): Privatization Deal by AEM Holdings (AEM SP) Trading with a View to Complete



GL Ltd (GLL SP) 
Hospitality
0.2
VGO
25.0%


GL Limited (GLL SP): Privatisation Offer Renews Interest In Guoco



Penguin International (PBS SP) 
Boat builder
0.1
VGO
30%


Penguin International (PBS SP): Friendly Privatization Deal Might Need A Bump



Europe




CA Immobilien Anlagen AG (CAI AV) 
Real estate
3.8
Offer
16.9%


CA Immo - Starwood: Mandatory Offer



Carrefour SA (CA FP) 
Convenience
20.0
Merger
29.3%


Carrefour - Alimentation Couche-Tard Non-Binding Offer



Enlabs AB (NLAB SS) 
Sports betting
0.3
Offer
1.1%


Enlabs - Entain Beefing Up



Entain (ENT LN) 
Entertainment
11.0
Offer
22%


MGM's Prospective Offer for Entain



Liberbank SA (LBK SM) 
Financing
0.9
Merger



Liberbank - Unicaja Agreed Merger



Naturgy Energy Group SA (NTGY SM) 
Energy
6.0
Partial offer
20%


IFM Investors to Launch a Partial Hostile Tender Offer for Naturgy



Handicare Group AB (HANDI SS) 
Medi aid
0.4
Offer
22.0%


Handicare - Savaria: Recommended Offer



Tikkurila Oyj (TIK1V FH) 
Paints
1.7
Offer
84.5%


Akzo Nobel Tops PPG's Offer for Tikkurila


Source: Smartkarma Insights




The average premium for the new deals announced (or first discussed) in January was ~35%. This compared to the average premium in 2020 and 2019 of 31% and 31.5% respectively. 




Summary of News in January of Arb Situations On Smartkarma's Radar


(Again, click on the company names to take to you to the insights and/or discussion posts for a more comprehensive read-through on each situation. Where a new insight was written on these names in July, I've included a link, in bold, to that insight in italics.)






Australia


Comments (with links to announcements &amp; insights)




3P Learning (3PL AU) 

21-Jan: Non-binding term sheet entered into




amaysim Australia (AYS AU) 

18-Jan:
WAM Capital Ltd (WAM AU) has bumped its Offer for amaysim Australia (AYS AU) to 1 new WAM share for every 2.675 AYS share; or A$0.70/share cash per share, from 1 new WAM share for every 2.7 AYS share; or A$0.695/share cash per share. AYS' largest shareholder, Longfrist with 19.19%, supports WAM's Offer.




Asaleo Care Ltd (AHY AU) 

27-Jan: Independent board rejects non-binding proposal




Cardinal Resources (CDV AU) 

27-Jan: Shandong to compulsory acquire shares. Shares to be cease trading on the 3 Feb




Coca Cola Amatil (CCL AU) 

6-Jan: Coca-Cola Amatil Takeover Offer: A Bump Forthcoming?




Link Administration Holdings (LNK AU) 

3-Jan: SS&amp;C withdraws proposal for Link Administration Holdings (LNK AU).




Regis Healthcare (REG AU) 

20-Jan Washington H. Soul Pattinson and Co. (SOL AU)withdraws




Think Childcare (TNK AU) 

20-Jan: Think Childcare (TNK AU): Bigger Bid by Busy Bees




Vitalharvest Freehold Trust (VTH AU) 

No January update




WPP PLC (WPP LN) 

No January update










Hong Kong


Comments (with links to announcements &amp; insights)




Beijing Jingneng Clean Energy (579 HK) 

31-Dec: Beijing Jingneng (579 HK): Doc Out. IFA Says Fair &amp; Reasonable
11-Jan: As expected, SAIF (6.13% of total issued H  shares, and 11.53% of independent H shares; and Goldwind (2.83% &amp; 5.32% respectively) have given letters of intent to support the Offer. 
25-Jan:Quiddity M&amp;A : A Guide To Mergers By Absorption




Car Inc (699 HK) 

7-Jan: Car Inc (699 HK):  Are We Missing Anything?
26-Jan: Car Inc (699 HK):  No, We Are Not Missing Anything




China Logistics Property Holdings (1589 HK) 

18-Jan: Bloomberg is reporting that Blackstone Group Inc., ESR Cayman Ltd., and JD Logistics Inc. are among bidders for control of China Logistics Property Holdings (1589 HK). Meituan (3690 HK) is also reportedly in the mix.




Cowell E Holdings (1415 HK) 

1-Jan: Cowell E Holdings (1415 HK) delays the dispatch of the Composite Doc to the 22 January. 
15-Jan: Doc issued. Fist close is the 5 Feb




Huifu Payment Limited (1806 HK) 

27-Jan: Huifu Payment (1806 HK): Scheme Doc Out. IFA Says Fair




I.T Ltd (999 HK) 

20-Jan: Pre-cons satisfied. 




Shanghai Prime Machinery H (2345 HK) 

11-Jan: Shanghai Prime Machinery H (2345 HK) shareholders approved the merger. 12 Jan was the last day of trading. 




SHK Hong Kong Industries (666 HK) 

No January update




Tonly Electronics Holdings (1249 HK) 

29-Jan: Tonly Electronics (1249 HK): Scheme Doc Out. IFA Says Fair




China Zhongdi Dairy (1492 HK) 

18-Jan:  Zhongdi Dairy (1492 HK): Doc Out. Compulsory Acquisition Afforded










India


Comments (with links to insights)




Allcargo Logistics (AGLL IN) 

No January update




INEOS Styrolution India Limited (INEOS IN) 

No January update




Vedanta Ltd (VEDL IN) 

11-Jan: Vedanta (VEDL IN) Promoter To Launch an Open Offer To Buy More










Japan


Comments (with links to insights)




Cocokara Fine (3098 JP) 
No January update



Honshu Chemical Industry (4115 JP) 

No January update




Japan Asia (3751 JP) 

11-Dec: City Index Eleventh is now 14.91% of the register at Japan Asia (3751 JP).
18-Jan: Murakami Fund's Tender for JAG (3751):  May Be Rangebound Near-Term
26-Jan: Japan Asia Group (3751): Murakami Wins the Mother Of All Bumps +100% 




Joban Kaihatsu (1782 JP) 

4-Jan: Black Clover today reported they owned 12.29% of Joban Kaihatsu (1782 JP) 
23-Jan: Joban Kaihatsu MBO Price Bumped, Tender Extended: Still Not Rolling In Clover




Keihanshin Building (8818 JP) 

13-Jan Tender offer fails. Funny that. 




Kenedix Inc (4321 JP) 

9-Jan: Kenedix Inc (4321 JP) reported  that SMFL MIrai Partners had completed the Tender Offer for Kenedix shares and ended up with 62.35%
12-Jan: FTSE announced today that it would reduce the weight of Kenedix Inc (4321 JP) in its index from 97.7309% to 34.90958490918% while keeping the share count unchanged at 218,917,200 shares. The change takes place at the close of business on the 14th of January




Medical &amp; Biological Laboratories (4557 JP) 

Delisted 13 January




Pressance Corp (3254 JP) 

17-Jan: Pressance Partial Tender - Almost EVERYONE Tendered




Softbrain (4779 JP) 

Delisted on Jan 19




Tokyo Dome Corp (9681 JP) 

19-Jan: Mitsui Fudosan (8801 JP) announced the results of its Tender Offer for Tokyo Dome Corp (9681 JP). That will trigger an EGM and a resulting squeezeout.  It will also trigger a FTSE and MSCI downweight.




Toa Oil Co Ltd (5008 JP) 

13-Jan: Toa Oil (5008) Tender Offer Update - Looks Bumpity
14-Jan: Cornwall Capital announced it had increased its position in Toa Oil Co Ltd (5008 JP) from 20.86% (as of the last report) to 21.89% (as of the 6th of January). 
28-Jan: Cornwall Capital announced it had increased its position to 22.98%










Malaysia


Comments (with links to insights)




Batu Kawan Bhd (BAK MK) 

No January update




FGV Holdings Bhd (FGV MK) 

26-Jan: FGV (FGB MK): IFA Says Offer Not Fair








New Zealand


Comments (with links to insights and announcements)




Infratil Ltd (IFT NZ) 

28-Jan: Announced a strategic review of 51%-held Trustpower Ltd (TPW NZ) 








Philippines


Comments (with links to insights and announcements)




Lopez Holdings (LPZ PM) 

21-Jan: Tender Offer report despatched. Closing date is the 19 Feb,










Singapore


Comments 




Hi P International (HIP SP) 

No January update




Soilbuild Business Space REIT (SBREIT SP) 

24-Jan: First court hearing to be held on the 8 Feb.








Taiwan


Comments (with links to insights)




Jih Sun Financial (5820 TT) 

6-Jan: Fubon Financial Offer for Jih Sun Gets Even Weirder
7-Jan: Taiwanese news agency CNA has said that the FSC is investigating whether or not Capital Target Limited and its Responsible Officer Derek MD Chen (who I had believed to be the Responsible Person) is indeed the controller of Capital Target Limited.




Thinflex Corp (3144 TT) 

Tender Offer was completed, 100% pro-ration. (Japanese)













Europe/UK


Comments (with links to announcements and insights)




Altice NV A (ATC NA) 


22-Jan: Offer declared unconditional




Calisen PLC (1779730D LN) 


18-Jan: Sche doc issued




Entra ASA (ENTRA NO) 

No January update




KAZ Minerals (KAZ LN) 

25-Jan:  KAZ Minerals




Siltronic AG (WAF GR) 

25-Jan: GlobalWafers Ups Offer for Siltronic




Recipharm AB (RECIB SS) 
28-Jan: Roar bumps Offer



RSA Insurance (RSA LN) 
No January update



Tele Columbus AG (TC1 GR) 
No January update



Veolia Environnement SA (VIE FP) 
11-Jan: Veolia Steps up Pressure on Suez






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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Mitsui Fudosan (8801 JP)

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

Imperial Hotel (9708) - Redevelopment Might Hide an LBO Story

Imperial Hotel (9708) has been an event-in-waiting for a decade, and at the very least, five+ years. It may be for another five, but there is a...

Travis Lundy

🇯🇵 JAPAN • IT’S A WRAP - Winter 2020 Results & Revisions Review

NET GAIN - Forecast Aggregate Net Income for the universe of Japanese listed companies ended the quarter 23.8% higher than three months ago - an...

Campbell Gunn

🇯🇵 JAPAN • The Post-COVID Rotation from Growth to Value Begins + 02/05 Results & Revisions Update

THE 2021 ROTATION BEGINS - For most of the last year, the Japanese equity market has been led by overvalued and overbought high-quality growth...

Campbell Gunn

(Mostly) Asia M&A: January 2021 Roundup

The average premium for the new deals announced (or first discussed) in January was ~36%. This compared to the average premium in 2020 and 2019 of...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)