Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On Friday 13th November 2020, <a href="https://www.smartkarma.com/entities/open-house-co-ltd" target="_blank" data-smartkarma-citation="entities:19550:1" rel="noopener">Open House (3288 JP)</a> and 32%-owned affiliate <a href="https://www.smartkarma.com/entities/pressance-corp" target="_blank" data-smartkarma-citation="entities:17783:1" rel="noopener">Pressance Corp (3254 JP)</a> announced a revision of their shareholder agreement and a quasi-MBO Partial Tender Offer and Capital Injection which would, as a result of both being successful, get Open House to 65% ownership and would get Pressance an additional JPY 5bn in capital. Pressance (3254 JP) is a relatively fast-growing Kansai-based real estate developer and broker in Japan, building, selling, and managing condos and parking lots. It specializes in smaller condos - both in terms of bedrooms per unit and in terms of total units per property - and investment properties, and then managing those properties. It also runs a small hotel business. Pressance had been fast-growing in stock price as well until just under a year ago when former CEO Yamagishi-san was arrested in connection with a case of missing money at a school called Meijo Gakuen. The previous president was arrested too. Hedge funds bought shares in large numbers at the time. Tower Investment Management, which had been steadily selling into strength, bought 3.5% of the shares out in the two days after the sharp selloff started, getting to 10.27%. They bought more in March when the COVID crisis hit getting to 15.46% by early April 2020. CEO Yamagishi sold 31.63% to Open House in April.Open House (3288 JP) is a larger fast-growing Kanto-based real estate broker and developer, getting two-thirds of its revenue from the development and sale of single-family homes, another 10% from developing condominiums - both done under a number of "brands", and another 20% from the property resale/broking business with more than 80% of properties (by count) in the 100-500mm and 500mm yen-plus price categories (65% in Tokyo and Yokohama, 35% in Kansai/Chubu/Kyushu and elsewhere).Open House already owns just under one-third of Pressance and is looking to make that just under two-thirds, probably hoping that some shareholders who might be viewed as "noisy" will accept the invitation to exit their positions. This is also an exit opportunity for the former Pressance CEO who will be selling roughly 8% of Pressance shares into the Tender Offer. For Open House, this is a bolt-on to consolidate more growth.We'll see.As always with partial offers, below you'll find the details and the Partial Offer Arb Grids.

On Friday 13th November 2020, Open House (3288 JP) and 32%-owned affiliate Pressance Corp (3254 JP) announced a revision of their shareholder agreement and a quasi-MBO Partial Tender Offer and Capital Injection which would, as a result of both being successful, get Open House to 65% ownership and would get Pressance an additional JPY 5bn in capital. Pressance (3254 JP) is a relatively fast-growing Kansai-based real estate developer and broker in Japan, building, selling, and managing condos and parking lots. It specializes in smaller condos - both in terms of bedrooms per unit and in terms of total units per property - and investment properties, and then managing those properties. It also runs a small hotel business. Pressance had been fast-growing in stock price as well until just under a year ago when former CEO Yamagishi-san was arrested in connection with a case of missing money at a school called Meijo Gakuen. The previous president was arrested too. Hedge funds bought shares in large numbers at the time. Tower Investment Management, which had been steadily selling into strength, bought 3.5% of the shares out in the two days after the sharp selloff started, getting to 10.27%. They bought more in March when the COVID crisis hit getting to 15.46% by early April 2020. CEO Yamagishi sold 31.63% to Open House in April.Open House (3288 JP) is a larger fast-growing Kanto-based real estate broker and developer, getting two-thirds of its revenue from the development and sale of single-family homes, another 10% from developing condominiums - both done under a number of "brands", and another 20% from the property resale/broking business with more than 80% of properties (by count) in the 100-500mm and 500mm yen-plus price categories (65% in Tokyo and Yokohama, 35% in Kansai/Chubu/Kyushu and elsewhere).Open House already owns just under one-third of Pressance and is looking to make that just under two-thirds, probably hoping that some shareholders who might be viewed as "noisy" will accept the invitation to exit their positions. This is also an exit opportunity for the former Pressance CEO who will be selling roughly 8% of Pressance shares into the Tender Offer. For Open House, this is a bolt-on to consolidate more growth.We'll see.As always with partial offers, below you'll find the details and the Partial Offer Arb Grids.

Pressance (3254 JP) Partial Tender - YUMMY!

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

After failing to break above resistance, global equities (MSCI ACWI) have had a rough start to the third quarter. Continued weakness in global manufacturing and the U.S.-EU tariff escalation raises the potential for a breakdown in global equities, however our outlook remains neutral as long as the MSCI ACWI remains confined to its horizontal range. In today's report we highlight attractive and actionable set-ups within technology, construction and engineering, and real estate.

After failing to break above resistance, global equities (MSCI ACWI) have had a rough start to the third quarter. Continued weakness in global manufacturing and the U.S.-EU tariff escalation raises the potential for a breakdown in global equities, however our outlook remains neutral as long as the MSCI ACWI remains confined to its horizontal range. In today's report we highlight attractive and actionable set-ups within technology, construction and engineering, and real estate.

Global Equity Strategy: Prevailing Trends Persist

TSE Tokyo Price Index TOPIX / Technical Analysis

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe  developed international (EAFE) will remain in a leadership position relative to EM (MSCI EM). In this report we highlight actionable set ups within Japan, Switzerland and Australia. Within Japanese Sectors, we focus on opportunities within Technology, Financials, Health Care, and Staples. We also highlight attractive setups within European/UK Sectors, including Health Care, Industrials, Staples and Utilities.

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe  developed international (EAFE) will remain in a leadership position relative to EM (MSCI EM). In this report we highlight actionable set ups within Japan, Switzerland and Australia. Within Japanese Sectors, we focus on opportunities within Technology, Financials, Health Care, and Staples. We also highlight attractive setups within European/UK Sectors, including Health Care, Industrials, Staples and Utilities.

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank Financials, Japanese Technology stocks, and within European Discretionary, Industrial, Health Care, and Staples sectors.

Developed International Equity Strategy: Favor EAFE over EM

Director, Pearl Hill Advisors

Nicholas Tanner

Director

Pearl Hill Advisors

Equity Bottom-Up

A cheap and well-run business in Japan’s housing sector. Their forecast, yet again, appear conservative.  We see nothing wrong with the shares here and would buy. Assuming an operating profit of Y60bn next year to September 2020, the shares are ridiculously cheap on 6x earnings.

A cheap and well-run business in Japan’s housing sector. Their forecast, yet again, appear conservative.  We see nothing wrong with the shares here and would buy. Assuming an operating profit of Y60bn next year to September 2020, the shares are ridiculously cheap on 6x earnings. 

Open House (3288) Steady Domestic Growth at a Very Cheap Price.

Japan

Open House Co.,Ltd. provides real estate services. The Company offers services including renting, buying, selling and appraising real estate.

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Open House (3288 JP)

Pressance (3254 JP) Partial Tender - YUMMY!

Open House bought 31.6% of Pressance (3254) in spring when embattled former CEO Yamagishi needed to sell. Now OH are going in to get up to 65%,...

Travis Lundy

Global Equity Strategy: Prevailing Trends Persist

After failing to break above resistance, global equities (MSCI ACWI) have had a rough start to the third quarter. Continued weakness in global...

Vermilion Research

Developed Markets Opportunities

Continue to favor EAFE over EM. As long as the U.S. dollar remains elevated, we believe developed international (EAFE) will remain in a leadership...

Vermilion Research

Developed International Equity Strategy: Favor EAFE over EM

We highlight attractive and actionable themes within developed international markets, including actionable set-ups across among: Non-bank...

Vermilion Research

Open House (3288) Steady Domestic Growth at a Very Cheap Price.

A cheap and well-run business in Japan’s housing sector. Their forecast, yet again, appear conservative. We see nothing wrong with the shares here...

Pearl Hill Advisors

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