Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>10 days ago <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 its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. </li>
<li>Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. </li>
<li>Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.</li>
</ul>


10 days ago Canon Inc (7751 JP) announced its 18th ¥50bn buyback in 15yrs. They have a pattern, both in execution and outperformance. 
Historically, they are reasonably aggressive. It may pay to observe market data to see when they are done. It may also pay to look at peer outperformance cycles. 
Here I look at both - buyback cycle performance and cycle outperformance. Good so far, and now I see a tactical trade but it's not overwhelming.


Assessing the Canon Buyback and Follow-On Performance

<ul>
<li>Canon has conducted 18 buybacks in the last 15 years. Every single one has been the same size. And the parameter-setting and how they are executed is... particular.</li>
<li>For those with Canon to execute, using the information about patterns may be helpful. </li>
<li>For those interested in a trade, there may be one here.</li>
</ul>


Canon has conducted 18 buybacks in the last 15 years. Every single one has been the same size. And the parameter-setting and how they are executed is... particular.
For those with Canon to execute, using the information about patterns may be helpful. 
For those interested in a trade, there may be one here.


Canon Buyback - 18th in a Row at the Same Size, But This Time With a Running Head Start

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  Powell Testifies. 50bp hike more likely  as inflation higher than expected. Sparks repricing in markets: US Equities hit, UST dumped, USD rises - Choas all round. </li>
<li>JAPAN.  NKY Futs -0.4% vs Cash; USDJPY weakens to 137.1 as Powell tesimony digested;  H3 failure-blow to JP space hopes; "My Number" Use expanded;  Dentsu UK M&amp;A; Many Rating D/Gs </li>
<li>NUGGET. Carbon Capture is a key part of the decarbonization mix; Expect significant spend locally and globally. We look at the opportunity and the firms likely to benefit.  </li>
</ul>


OVERSEAS.  Powell Testifies. 50bp hike more likely  as inflation higher than expected. Sparks repricing in markets: US Equities hit, UST dumped, USD rises - Choas all round. 
JAPAN.  NKY Futs -0.4% vs Cash; USDJPY weakens to 137.1 as Powell tesimony digested;  H3 failure-blow to JP space hopes; "My Number" Use expanded;  Dentsu UK M&amp;A; Many Rating D/Gs 
NUGGET. Carbon Capture is a key part of the decarbonization mix; Expect significant spend locally and globally. We look at the opportunity and the firms likely to benefit.  


Good Morning Japan |Powell Dishes Bitter Pill - Sparks Cross Market Chaos; NUGGET: CCUS Opportunity

<ul>
<li>Three interviews and comments by Senior Toshiba Boardmembers (chairperson and head of Special Committee) and the CEO prep the ground for a full company deal, or no deal.</li>
<li>If no deal, there's downside to the 5yr average Toshiba/Peers ratio. If you see 50% deal probability, at mid ¥6000s or better, IRRs are OK. But there is jump risk.</li>
<li>I don't see the activists just deciding to bail en masse if no deal. I think they take it further, which means I think the Board wants a deal.</li>
</ul>


Three interviews and comments by Senior Toshiba Boardmembers (chairperson and head of Special Committee) and the CEO prep the ground for a full company deal, or no deal.
If no deal, there's downside to the 5yr average Toshiba/Peers ratio. If you see 50% deal probability, at mid ¥6000s or better, IRRs are OK. But there is jump risk.
I don't see the activists just deciding to bail en masse if no deal. I think they take it further, which means I think the Board wants a deal.


Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News "Leaks" Likely

<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> has announced two buyback programs this year of ¥50bn each. <a href="https://www.smartkarma.com/entities/ricoh-company-ltd" target="_blank" data-smartkarma-citation="entities:15359:1" rel="noopener">Ricoh Company Ltd (7752 JP)</a> announced one in May for ¥30bn. </li>
<li>The result is 2.9% bought back vs 4.4%. The accretion nod goes to Ricoh. But so does the overhang nod going forward.  Effissimo+Crossholders is 40% for Ricoh. Mid20s for Canon.</li>
<li>Buyback impact-related trade timing has worked for Canon. Ricoh's buyback ends imminently. There may be a trade to do here.</li>
</ul>



Canon Inc (7751 JP) has announced two buyback programs this year of ¥50bn each. Ricoh Company Ltd (7752 JP) announced one in May for ¥30bn. 
The result is 2.9% bought back vs 4.4%. The accretion nod goes to Ricoh. But so does the overhang nod going forward.  Effissimo+Crossholders is 40% for Ricoh. Mid20s for Canon.
Buyback impact-related trade timing has worked for Canon. Ricoh's buyback ends imminently. There may be a trade to do here.


Canon Buyback Done, Ricoh's Done Shortly, Back To Your Regularly Scheduled Program

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)

Assessing the Canon Buyback and Follow-On Performance

The Canon buyback started 7 trading days ago and is likely nearly done. EPS forecasts are on the up vs peers. Stock is outperforming. There is a...

Travis Lundy

Canon Buyback - 18th in a Row at the Same Size, But This Time With a Running Head Start

Canon (7751) reported salutary Q1 earnings, and revised up FY forecasts. The stock responded well vs Peers. Peers have since reported, but it...

Travis Lundy

Good Morning Japan |Powell Dishes Bitter Pill - Sparks Cross Market Chaos; NUGGET: CCUS Opportunity

REALITY CHECK FROM POWELL; USDJPY weakens to 137.1 as Powell tesimony digested; H3 failure-blow to JP space hopes; "My Number" Use expanded; ...

Mark Chadwick

Toshiba (6502 JP) Getting Closer to Crunch Time So Ongoing News "Leaks" Likely

Bidders are approaching 2nd Round deadlines, and news/comments are starting to seep out. Expect more. I expect a decision at/after H1 results. If...

Travis Lundy

Canon Buyback Done, Ricoh's Done Shortly, Back To Your Regularly Scheduled Program

Canon's buyback ended at end-August. Ricoh's ends shortly. The post-buyback selling 'shadow' on Canon should be finished shortly. Ricoh will simply...

Travis Lundy

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