Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/mitsui-matsushima-co-ltd" target="_blank" data-smartkarma-citation="entities:13569:1" rel="noopener">Mitsui Matsushima (1518 JP)</a> upped full-year guidance, lifting revenue by 4.4%, OP by 3%, and NP by 21% (at earnings, they guided revenue +3.9%yoy, NP +5.7%yoy after decent beats.</li>
<li>Today, they announced the purchase of an asset-rich q-tip maker with 10% OPMs and NPMs &gt;OPMs on ¥3.6bn revenue the last 3yrs. Deal closes August. We'll know more in September.</li>
<li>The earnings uplift is frankly not that impressive. There were stock sale gains, and the uplift in consolidated numbers from the buy. But the dividend hike is REALLY impressive.</li>
</ul>


Today, Mitsui Matsushima (1518 JP) upped full-year guidance, lifting revenue by 4.4%, OP by 3%, and NP by 21% (at earnings, they guided revenue +3.9%yoy, NP +5.7%yoy after decent beats.
Today, they announced the purchase of an asset-rich q-tip maker with 10% OPMs and NPMs &gt;OPMs on ¥3.6bn revenue the last 3yrs. Deal closes August. We'll know more in September.
The earnings uplift is frankly not that impressive. There were stock sale gains, and the uplift in consolidated numbers from the buy. But the dividend hike is REALLY impressive.


[Japan Activism/Value] - Mitsui Matsushima (1518) Raises; Low PER, High ROE/Growth (Still), Now Div!

Equity Bottom-Up

<ul>
<li>A year ago, activist "Murakami Group" had a 42% stake in <a href="https://www.smartkarma.com/entities/mitsui-matsushima-co-ltd" target="_blank" data-smartkarma-citation="entities:13569:1" rel="noopener">Mitsui Matsushima (1518 JP)</a>. MM announced results, and guidance, and a 31% buyback. The stock popped.  </li>
<li>A couple of months later, the buyback was announced as a tender offer. Murakami Group tendered. Nobody else did. Murakami tendered the minimum promised and bought more.</li>
<li>In November MM raised guidance. Now they've beat. The fundamentals are a bit difficult to understand. A glance doesn't do it. First look it's cheap. Second it's cheaper. Third, better.</li>
</ul>


A year ago, activist "Murakami Group" had a 42% stake in Mitsui Matsushima (1518 JP). MM announced results, and guidance, and a 31% buyback. The stock popped.  
A couple of months later, the buyback was announced as a tender offer. Murakami Group tendered. Nobody else did. Murakami tendered the minimum promised and bought more.
In November MM raised guidance. Now they've beat. The fundamentals are a bit difficult to understand. A glance doesn't do it. First look it's cheap. Second it's cheaper. Third, better.


[Japan Activism/Value] - Mitsui Matsushima (1518) Beats; Single Digit PER, Double Digit ROE & Growth

<ul>
<li>With earnings today (which beat guidance), <a href="https://www.smartkarma.com/entities/mitsui-matsushima-co-ltd" target="_blank" data-smartkarma-citation="entities:13569:1" rel="noopener">Mitsui Matsushima (1518 JP)</a> announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.</li>
<li>The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.</li>
<li>If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn't super-rich.</li>
</ul>


With earnings today (which beat guidance), Mitsui Matsushima (1518 JP) announced upbeat guidance for next year, a very large dividend hike from ¥130/share to ¥230/share, and a Very Large Buyback.
The buyback is ¥20bn (vs ¥47bn market cap) or 3.5mm shares (31.3%). It starts 2 June. Astute Murakami trackers may recognise the potential pattern here.
If the company buys back all 3.5mm shares at just below book, EPS of ¥756 = 12.9% ROE and PER of 7.8x. Even up 30% from here that isn't super-rich.


[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback

Index Rebalance

<ul>
<li>A couple of years ago, TOPIX announced a methodology change to start in October 2026. Until that point, companies which IPO on TSE Prime or move segments are TOPIX members.</li>
<li>In October 2026, using data from end-August 2026, there will be a ranking of the eligible TSE-listed (including Growth and Standard names) universe, adjusted by liquidity/ criteria.</li>
<li>Incumbent members in the top 97% of cumulative free-float market cap (FFMC) stay in. Non-members in the top 96% get in. Members outside 97% get deleted. We see 700+ changes.</li>
</ul>


A couple of years ago, TOPIX announced a methodology change to start in October 2026. Until that point, companies which IPO on TSE Prime or move segments are TOPIX members.
In October 2026, using data from end-August 2026, there will be a ranking of the eligible TSE-listed (including Growth and Standard names) universe, adjusted by liquidity/ criteria.
Incumbent members in the top 97% of cumulative free-float market cap (FFMC) stay in. Non-members in the top 96% get in. Members outside 97% get deleted. We see 700+ changes.


[Quiddity Index] The TOPIX Change in Oct 2026 - Part I (Methodology Madness)

David Blennerhassett

<ul>
<li>EQT/DG lifted their Offer Price for <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com (2371 JP)</a> to ¥3,450/share. This "obstructs" the Bain/LY deal, slightly, temporarily, but there are nuances within. Expect Bain/LY to come over the top.</li>
<li>
<a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus NV (PRX NA)</a> is cheap"  vs. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. And <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> "rich" to Prosus. Look to long Prosus here, short Tencent here. Or long Prosus, short Naspers</li>
<li>Be comfortable medium-long-term with <a href="https://www.smartkarma.com/entities/mitsui-matsushima-co-ltd" target="_blank" data-smartkarma-citation="entities:13569:1" rel="noopener">Mitsui Matsushima (1518 JP)</a>'s super-cheap asset. And they have niche businesses in semiconductor/tech to spruce things up if people decide they want to run with it.</li>
</ul>


EQT/DG lifted their Offer Price for Kakaku.com (2371 JP) to ¥3,450/share. This "obstructs" the Bain/LY deal, slightly, temporarily, but there are nuances within. Expect Bain/LY to come over the top.

Prosus NV (PRX NA) is cheap"  vs. Tencent (700 HK). And Naspers (NPN SJ) "rich" to Prosus. Look to long Prosus here, short Tencent here. Or long Prosus, short Naspers
Be comfortable medium-long-term with Mitsui Matsushima (1518 JP)'s super-cheap asset. And they have niche businesses in semiconductor/tech to spruce things up if people decide they want to run with it.


Last Week In Event SPACE: Mitsui Matsushima, Prosus/Tencent/Naspers, Legend/Lenovo

Japan

Mitsui Matsushima Co., Ltd. sells coal primarily in the Kyushu region.  The Company also produces construction machinery, cement, and building materials. Mitsui Matsushima operates supermarkets and real estate business as well.

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Mitsui Matsushima (1518 JP)

[Japan Activism/Value] - Mitsui Matsushima (1518) Raises; Low PER, High ROE/Growth (Still), Now Div!

Mitsui Matsushima is now 10+x Mar27 PER (when it has mostly hovered in the 6-7x area) and at a 5.6% dividend yield. The stock traded at that...

Travis Lundy

[Japan Activism/Value] - Mitsui Matsushima (1518) Beats; Single Digit PER, Double Digit ROE & Growth

It seems practically anathema to talk about long-term value and outlook these days unless its AI in which case the sky is the limit. Or 100x sales...

Travis Lundy

[Japan Activism] Murakami Owns ~42% and Company Announces 31.3% Buyback

Mitsui Matsushima popped after big 31% buyback news, but is now +7.5% vs the day before. If it bought back all shares at ¥4995 (the day after the...

Travis Lundy

[Quiddity Index] The TOPIX Change in Oct 2026 - Part I (Methodology Madness)

The change in TOPIX methodologyin October 2026 changes the paradigm to "normal index." It reduces the name count (probably not far enough) but...

Travis Lundy

Last Week In Event SPACE: Mitsui Matsushima, Prosus/Tencent/Naspers, Legend/Lenovo

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

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