Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Konica Minolta, a key player in the Japanese office equipment market, presents an attractive investment opportunity, particularly in light of the recent actions by activist investor Effissimo.</li>
<li>The investment case for Konica Minolta hinges on several factors, including potential structural reforms, M&amp;A activity, and undervaluation.</li>
<li>Given Effissimo's track record with Ricoh and the broader industry dynamics, the thesis for a bullish outlook on Konica Minolta is compelling.</li>
</ul>


Konica Minolta, a key player in the Japanese office equipment market, presents an attractive investment opportunity, particularly in light of the recent actions by activist investor Effissimo.
The investment case for Konica Minolta hinges on several factors, including potential structural reforms, M&amp;A activity, and undervaluation.
Given Effissimo's track record with Ricoh and the broader industry dynamics, the thesis for a bullish outlook on Konica Minolta is compelling.


Japan Value | Effissimo Takes Significant Stake in Konica

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/roland-dg-corp" target="_blank" data-smartkarma-citation="entities:10653:1" rel="noopener">Roland DG Corp (6789 JP)</a> has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than <a href="https://www.smartkarma.com/entities/brother-industries-ltd" target="_blank" data-smartkarma-citation="entities:6114:1" rel="noopener">Brother Industries (6448 JP)</a>’s JPY5,200 offer.</li>
<li>The Board articulates a compelling case on Brother's offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price). </li>
<li>Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board's recommendation.  </li>
</ul>



Roland DG Corp (6789 JP) has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than Brother Industries (6448 JP)’s JPY5,200 offer.
The Board articulates a compelling case on Brother's offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price). 
Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board's recommendation.  


Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Yesterday, post-close, Bloomberg reported a headline "<strong>*SILCHESTER REPORTS NIKON STAKE; MAY SEEK CAPITAL POLICY CHANGES</strong>"</li>
<li>That was exciting. It was in all caps. It was activist-ish-y. Today the stock rose 10.3% and we got another article saying it was up because of Silchester's filing.</li>
<li>Beware the Bloomberg headline. Nuance is sometimes lost. They aren't always designed to help investors invest. Often, the main purpose is clickbait.</li>
</ul>


Yesterday, post-close, Bloomberg reported a headline "*SILCHESTER REPORTS NIKON STAKE; MAY SEEK CAPITAL POLICY CHANGES"
That was exciting. It was in all caps. It was activist-ish-y. Today the stock rose 10.3% and we got another article saying it was up because of Silchester's filing.
Beware the Bloomberg headline. Nuance is sometimes lost. They aren't always designed to help investors invest. Often, the main purpose is clickbait.


Nikon (7731) - Beware The Bloomberg Headline But There's Value Here

<ul>
<li>On 19 April, Taiyo Co-CEO Brian Heywood told <a href="https://finance.yahoo.com/news/bidding-war-prompts-taiyo-consider-030026276.html" target="_blank" rel="noopener">Bloomberg</a> and <a href="https://www.reuters.com/markets/deals/us-fund-taiyo-says-it-may-buy-into-brother-bid-niche-japanese-printer-2024-04-19/" target="_blank" rel="noopener">Reuters</a> they were considering three options to <a href="https://www.smartkarma.com/entities/brother-industries-ltd" target="_blank" data-smartkarma-citation="entities:6114:1" rel="noopener">Brother Industries (6448 JP)</a>’s tender for <a href="https://www.smartkarma.com/entities/roland-dg-corp" target="_blank" data-smartkarma-citation="entities:10653:1" rel="noopener">Roland DG Corp (6789 JP)</a>. </li>
<li>Taiyo’s options are bumping its offer, walking away or tendering into the Brother’s offer if it bumps and alleviates dis-synergies concerns.</li>
<li>All three options are likely a ruse. Taiyo’s primary play is to frustrate and pressure Brother to withdraw its bid if it cannot get the Board’s recommendation.</li>
</ul>


On 19 April, Taiyo Co-CEO Brian Heywood told Bloomberg and Reuters they were considering three options to Brother Industries (6448 JP)’s tender for Roland DG Corp (6789 JP). 
Taiyo’s options are bumping its offer, walking away or tendering into the Brother’s offer if it bumps and alleviates dis-synergies concerns.
All three options are likely a ruse. Taiyo’s primary play is to frustrate and pressure Brother to withdraw its bid if it cannot get the Board’s recommendation.


Roland DG (6789 JP): Taiyo Mulling Three Options or Is It?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.</li>
<li>Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. </li>
<li>This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.</li>
</ul>



Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. 
This time offers a new buyback. ¥100bn. Over the space of a year. That's only 3% of ADV but the shareholder structure is different than you think it is.


Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Japan

RICOH COMPANY, LTD. manufactures and markets office automation equipment, electronic devices, and photographic instruments.  The Company's diverse product line includes facsimiles, image scanners, printers, digital cameras, and personal computers, as well as a full range of analog, digital, and color copiers. Ricoh operates with a network of sales offices and tie-ups worldwide.

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Ricoh Company Ltd (7752 JP)

Japan Value | Effissimo Takes Significant Stake in Konica

Activist investor Effissimo's involvement in Konica Minolta presents an investment opportunity due to potential reforms, M&A activity, and...

Mark Chadwick

Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma

The shares are trading above Taiyo’s revised offer. Brother could bump but faces a dilemma as its tender offer (irrespective of price) now has a...

Arun George

Nikon (7731) - Beware The Bloomberg Headline But There's Value Here

Nikon is a cheap company with dual personalities, which keeps its multiple low. It has cash and securities too. Silchester bought 5% and Bloomberg...

Travis Lundy

Roland DG (6789 JP): Taiyo Mulling Three Options or Is It?

Taiyo’s press interviews are a smokescreen for its primary tactic of frustrating and pressing Brother to withdraw its bid if it cannot get the...

Arun George

Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Canon results were OK but underperformed expectations at the net level. Guidance for 2024 are slightly above consensus. Interesting news is that...

Travis Lundy

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Japan Value | Effissimo Takes Significant Stake in Konica

​Activist investor Effissimo's involvement in Konica Minolta presents an investment opportunity due to potential reforms, M&A activity, and...

Mark Chadwick

Roland DG (6789 JP): Taiyo Bumps as Brother (6448 JP) Now Faces a Dilemma

The shares are trading above Taiyo’s revised offer. Brother could bump but faces a dilemma as its tender offer (irrespective of price) now has a...

Arun George

Nikon (7731) - Beware The Bloomberg Headline But There's Value Here

Nikon is a cheap company with dual personalities, which keeps its multiple low. It has cash and securities too. Silchester bought 5% and Bloomberg...

Travis Lundy

Roland DG (6789 JP): Taiyo Mulling Three Options or Is It?

Taiyo’s press interviews are a smokescreen for its primary tactic of frustrating and pressing Brother to withdraw its bid if it cannot get the...

Arun George

Canon (7751) - OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback

Canon results were OK but underperformed expectations at the net level. Guidance for 2024 are slightly above consensus. Interesting news is that...

Travis Lundy

Activist investor Effissimo's involvement in Konica Minolta presents an investment opportunity due to potential reforms, M&A activity, and...