Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Equity Bottom-Up

<ul>
<li>The market sees testing as AI’s first casualty, but SHIFT is building an AI-powered Trojan horse into Japan’s ¥56tn modernization market.</li>
<li>Near-Term earnings are depressed by investment, hiring normalization, consolidation noise, and possible Rise impairment; none changes cash flow, long-run unit economics, or the path to 24% EBITDA CAGR.</li>
<li>At 9x EV/EBITDA and ~12x FY8/27 EPS, the stock discounts execution failure and permanent impairment; if conversion works even modestly, the current multiple is mispriced.</li>
</ul>


The market sees testing as AI’s first casualty, but SHIFT is building an AI-powered Trojan horse into Japan’s ¥56tn modernization market.
Near-Term earnings are depressed by investment, hiring normalization, consolidation noise, and possible Rise impairment; none changes cash flow, long-run unit economics, or the path to 24% EBITDA CAGR.
At 9x EV/EBITDA and ~12x FY8/27 EPS, the stock discounts execution failure and permanent impairment; if conversion works even modestly, the current multiple is mispriced.


Shift (3697): An AI Strategy Just Crazy Enough to Work

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ntt-dc-reit" target="_blank" data-smartkarma-citation="entities:45414:1" rel="noopener">Ntt Dc Reit (NTTDCR SP)</a> (NDC), a data center REIT, aims to raise up to US$810m in its Singapore IPO.</li>
<li>The IPO portfolio comprises six mainly freehold data centres in the U.S., Austria and Singapore with an aggregate appraised valuation of US$1.6bn.</li>
<li>In this note, we look at the company's portfolio and its performance.</li>
</ul>



Ntt Dc Reit (NTTDCR SP) (NDC), a data center REIT, aims to raise up to US$810m in its Singapore IPO.
The IPO portfolio comprises six mainly freehold data centres in the U.S., Austria and Singapore with an aggregate appraised valuation of US$1.6bn.
In this note, we look at the company's portfolio and its performance.


NTT DC REIT IPO - Decent Yield, Strong Local Backing, a Few Issues

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This morning, the <a href="https://asia.nikkei.com/Business/Business-deals/NTT-to-make-NTT-Data-wholly-owned-unit-via-tender-offer-worth-up-to-20bn" target="_blank" rel="noopener">Nikkei</a> says <a href="https://www.smartkarma.com/entities/nippon-telegraph-telephone-corporation" target="_blank" data-smartkarma-citation="entities:623:1" rel="noopener">NTT (Nippon Telegraph &amp; Telephone) (9432 JP)</a> has decided, 5 years after taking Docomo private, to buy out minorities in <a href="https://www.smartkarma.com/entities/ntt-data-corp" target="_blank" data-smartkarma-citation="entities:11232:1" rel="noopener">NTT Data Corp (9613 JP)</a>. </li>
<li>NTT owns 58%. The article suggests a "30-40% premium" (¥3,900-4,200) "is likely", with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.</li>
<li>It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There's a cool index event too.</li>
</ul>


This morning, the Nikkei says NTT (Nippon Telegraph &amp; Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP). 
NTT owns 58%. The article suggests a "30-40% premium" (¥3,900-4,200) "is likely", with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There's a cool index event too.


NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Tech and semis sharply lower as investors go risk off, although Coreweave bucks the trend to jump another 19%.</li>
<li>Infineon buoyed sentiment for power semi's somewhat after announcing tie up with NVDA for HVDC data center systems.</li>
<li>Expect a rough ride for Home builders and construction related plays such as Sumitomo Forestry and Shin Etsu.</li>
</ul>


Tech and semis sharply lower as investors go risk off, although Coreweave bucks the trend to jump another 19%.
Infineon buoyed sentiment for power semi's somewhat after announcing tie up with NVDA for HVDC data center systems.
Expect a rough ride for Home builders and construction related plays such as Sumitomo Forestry and Shin Etsu.


Japan Morning Connection: Markets Creaking Under the Weight of Poor Demand for US Bonds

<ul>
<li>Pockets of strength in US Tech Friday with Coreweave, SMCI, Micron up with semi-caps generally lower after ASML nos.</li>
<li>Potential replacements for a NTT Data NKY deletion should continue to find a bid.</li>
<li>JP retailers J-Front and Matsuya squeezed sharply Friday after social media post highlights activist involvement.</li>
</ul>


Pockets of strength in US Tech Friday with Coreweave, SMCI, Micron up with semi-caps generally lower after ASML nos.
Potential replacements for a NTT Data NKY deletion should continue to find a bid.
JP retailers J-Front and Matsuya squeezed sharply Friday after social media post highlights activist involvement.


Japan Morning Connection: Markets Uncertain to Start the Week After Moody's US Downgrade

Japan

NTT Data Corporation mainly provides large scale system integration and networking system services. System integration involves data transmission system design, sales, leasing, and services.  Network System Services include internet related and linked computer networks, and data provision and management of data. The Company is a subsidiary of Nippon Telegraph & Telephone Corporation.

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

NTT Data Corp (9613 JP)

Shift (3697): An AI Strategy Just Crazy Enough to Work

The market sees testing as AI’s first casualty, but SHIFT is building an AI-powered Trojan horse into Japan’s ¥56tn modernization market. 9x EV...

Michael Allen

NTT DC REIT IPO - Decent Yield, Strong Local Backing, a Few Issues

Ntt Dc Reit (NTTDCR SP) (NDC), a data center REIT, aims to raise up to US$810m in its Singapore IPO. In this note, we look at its portfolio and...

Sumeet Singh

NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

It looks like NTT will take over NTT Data. That is big news, but not entirely unexpected. It will probably be too expensive. It will create an...

Travis Lundy

Japan Morning Connection: Markets Creaking Under the Weight of Poor Demand for US Bonds

Investors shift to risk-off mode due to concerns over US's fiscal stability. Banks, R/E, consumer disc and home builders fall. Infineon's NVDA...

Andrew Jackson

Japan Morning Connection: Markets Uncertain to Start the Week After Moody's US Downgrade

Quantum computing names up after positive news from QUBT. Short squeeze for JP retailers after social media post about activist involvement. Recent...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shift (3697): An AI Strategy Just Crazy Enough to Work

The market sees testing as AI’s first casualty, but SHIFT is building an AI-powered Trojan horse into Japan’s ¥56tn modernization market. 9x EV...

Michael Allen

NTT DC REIT IPO - Decent Yield, Strong Local Backing, a Few Issues

Ntt Dc Reit (NTTDCR SP) (NDC), a data center REIT, aims to raise up to US$810m in its Singapore IPO. In this note, we look at its portfolio and...

Sumeet Singh

NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

It looks like NTT will take over NTT Data. That is big news, but not entirely unexpected. It will probably be too expensive. It will create an...

Travis Lundy

Japan Morning Connection: Markets Creaking Under the Weight of Poor Demand for US Bonds

​Investors shift to risk-off mode due to concerns over US's fiscal stability. Banks, R/E, consumer disc and home builders fall. Infineon's NVDA...

Andrew Jackson

Japan Morning Connection: Markets Uncertain to Start the Week After Moody's US Downgrade

Quantum computing names up after positive news from QUBT. Short squeeze for JP retailers after social media post about activist involvement. Recent...

Andrew Jackson

Investors shift to risk-off mode due to concerns over US's fiscal stability. Banks, R/E, consumer disc and home builders fall. Infineon's NVDA...