Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<ul>
<li>With FY23 earnings in May, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> announced a ¥1trn buyback (410mm shares, 3.04%). Given shares were ¥3,599 the day before, it meant fewer shares or a Tender.</li>
<li>Like Honda (who hadn't bought pre-offering), Toyota hadn't bought back in the first couple of months. We knew there was bank and insurer overhang. That overhang lasts for years. </li>
<li>Today, Toyota announced an "organised" 410mm share ¥1trln Tender Offer Buyback. Several financial institutions have announced plans to tender. This provides guidance on supply/demand for the rest of the year.</li>
</ul>


With FY23 earnings in May, Toyota Motor (7203 JP) announced a ¥1trn buyback (410mm shares, 3.04%). Given shares were ¥3,599 the day before, it meant fewer shares or a Tender.
Like Honda (who hadn't bought pre-offering), Toyota hadn't bought back in the first couple of months. We knew there was bank and insurer overhang. That overhang lasts for years. 
Today, Toyota announced an "organised" 410mm share ¥1trln Tender Offer Buyback. Several financial institutions have announced plans to tender. This provides guidance on supply/demand for the rest of the year.


Toyota's BIG Buyback Via Tender Offer from Banks & Insurers

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<ul>
<li>The new excitement of the MS&amp;AD story is the company's commitment to sell down all of its cross-shareholdings and to use proceeds to fund growth and dividends. </li>
<li>ROE is already far higher now than in recent years, and this can continue with rising dividends. </li>
<li>Monthly insurance sales figures give a good window on the core business, with growth rates in May YoY and YTD accelerating.</li>
</ul>


The new excitement of the MS&amp;AD story is the company's commitment to sell down all of its cross-shareholdings and to use proceeds to fund growth and dividends. 
ROE is already far higher now than in recent years, and this can continue with rising dividends. 
Monthly insurance sales figures give a good window on the core business, with growth rates in May YoY and YTD accelerating.


MS&AD Insurance - Sell Stocks to Zero; Drive Growth, Dividends. HFD on Policy Sales, Accelerating

Event-Driven

<ul>
<li>This month (June) saw 1,673 Corporate Governance Reports filed and 5 new "Mgmt Conscious of Capital Cost/Stock Price" policies filed. </li>
<li>We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.</li>
<li>We hope this took will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.</li>
</ul>


This month (June) saw 1,673 Corporate Governance Reports filed and 5 new "Mgmt Conscious of Capital Cost/Stock Price" policies filed. 
We created a tool show every report, provide links to every document, and now a new diff file tool. Put in a name, see the difference between the Old/New Reports.
We hope this took will help. It is designed to be a shelf reference. We update the tool once a month, a couple of weeks ahead of the TSE.


Japan CorpGovReport Details: TSE "Mgmt Conscious of Capital Cost/Stock Price" Details (Jul24)

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.</li>
<li>
<a href="https://www.smartkarma.com/entities/ms-ad-insurance-group-holdings" target="_blank" data-smartkarma-citation="entities:631:1" rel="noopener">MS&amp;AD Insurance (8725 JP)</a> had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.

MS&amp;AD Insurance (8725 JP) had a stake over US$100m in at least 29 listed Japanese stocks, amounting to a total of US$17.4bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


MS&AD Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell

<ul>
<li>There has been a recent non-life insurer price-fixing scandal. The JFTC and FSA investigated. Last December, the FSA issued Business Improvement Orders to the four majors. </li>
<li>There was a Bigmotor scandal last summer and Sompo Japan got a Business Improvement Order last month. All four insurers have to respond to a BIO for the price-fixing scandal.</li>
<li>9 Feb post-close, Jiji/<a href="https://www.nikkei.com/article/DGXZQOUB255TQ0V20C24A1000000/" target="_blank" rel="noopener">Nikkei</a> had articles saying the FSA had urged four major non-lifes subject to the first BIO to accelerate sales of ¥6.5trln+ of 5,900 Cross-Holdings. That's big.</li>
</ul>


There has been a recent non-life insurer price-fixing scandal. The JFTC and FSA investigated. Last December, the FSA issued Business Improvement Orders to the four majors. 
There was a Bigmotor scandal last summer and Sompo Japan got a Business Improvement Order last month. All four insurers have to respond to a BIO for the price-fixing scandal.
9 Feb post-close, Jiji/Nikkei had articles saying the FSA had urged four major non-lifes subject to the first BIO to accelerate sales of ¥6.5trln+ of 5,900 Cross-Holdings. That's big.


[Japan Governance] FSA Urges Japan Non-Life Insurers to Eliminate Cross-Holdings - Sales Coming

Japan

MS&AD Insurance Group Holdings, Inc. is a holding company established through reorganization of Mitsui Sumitomo Insurance Company, Limited.  The Group writes marine, fire, casualty, automobile, life, and allied insurance policies. MS&AD Insurance Group also operates financial services and agencies.

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MS&AD Insurance (8725 JP)

Toyota's BIG Buyback Via Tender Offer from Banks & Insurers

Toyota today announced an ¥800bn Tender Offer Buyback to buy back one-third of the equity stakes held by major non-life insurers. They, in turn,...

Travis Lundy

MS&AD Insurance - Sell Stocks to Zero; Drive Growth, Dividends. HFD on Policy Sales, Accelerating

MS&AD commits to sell down its cross-shareholding to zero, proceeds to fund growth, dividends. Core insurance sales improving, with April and May...

Daniel Tabbush

Japan CorpGovReport Details: TSE "Mgmt Conscious of Capital Cost/Stock Price" Details (Jul24)

There were 1,670+ new Corporate Governance Reports filed in the month of June. That includes a 27 updates of "Implementing Mgmt Consciousness of...

Travis Lundy

MS&AD Cross-Shareholding - At Least US$20bn of Cross-Shareholding to Sell

Along with its results announcement today, MS&AD announced that it will accelerate its cross-shareholding unwind and is targeting a sale of around...

Sumeet Singh

[Japan Governance] FSA Urges Japan Non-Life Insurers to Eliminate Cross-Holdings - Sales Coming

Japan's non-life insurers have long been something like a closed end equity portfolio plus an asset swap. Now scandals have driven the FSA to push...

Travis Lundy

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