Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei reported Saturday morning that <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> will withdraw its takeover proposal for <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a>. </li>
<li>The question was always whether Rohm thought being taken over was good for corporate value or if Denso would go hostile. We now know the answer to both questions.</li>
<li>Now we are left with Rohm and its standalone value, and the value of being bigger in power semiconductors. </li>
</ul>


The Nikkei reported Saturday morning that Denso Corp (6902 JP) will withdraw its takeover proposal for ROHM Co Ltd (6963 JP). 
The question was always whether Rohm thought being taken over was good for corporate value or if Denso would go hostile. We now know the answer to both questions.
Now we are left with Rohm and its standalone value, and the value of being bigger in power semiconductors. 


[Japan M&A] - Denso Withdraws Rohm (6963) Takeover Proposal - Now It's Just Value

<ul>
<li>At the end of March, <a href="https://www.smartkarma.com/entities/mitsubishi-electric-corp" target="_blank" data-smartkarma-citation="entities:11171:1" rel="noopener">Mitsubishi Electric (6503 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, and <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> agreed to have Mitsubishi Electric join the Toshiba/Rohm power semi talks.</li>
<li>The language in the documents released is worthwhile a close look. I expect a Rohm/Toshiba deal announcement within the quarter. If control/consolidation/stake levels are agreed, Mitsubishi won't be far behind.</li>
<li>Joining the three businesses creates lots of potential synergies, making the businesses #2 in the world. Separately, Kioxia's recent gains highlight the value of Rohm's Toshiba stake and Rohm's value.</li>
</ul>


At the end of March, Mitsubishi Electric (6503 JP), Toshiba Corp (6502 JP), and ROHM Co Ltd (6963 JP) agreed to have Mitsubishi Electric join the Toshiba/Rohm power semi talks.
The language in the documents released is worthwhile a close look. I expect a Rohm/Toshiba deal announcement within the quarter. If control/consolidation/stake levels are agreed, Mitsubishi won't be far behind.
Joining the three businesses creates lots of potential synergies, making the businesses #2 in the world. Separately, Kioxia's recent gains highlight the value of Rohm's Toshiba stake and Rohm's value.


[Japan M&A] Rohm (6963) - Refreshing Rohm's Stake Value in Toshiba, and Thinking About NEWCO

Equity Analyst - Fundamental & Thematic, Sree Capital

Sreemant Dudhoria

Equity Analyst - Fundamental & Thematic

Fundamental Research on Listed Indian Companies

Sree Capital

Sree Capital is a platform to share fundamental research on listed Indian companies. We do this research for our own investment

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> 's strong performance in H1 FY25 is overshadowed by weak guidance for H2 FY25.</li>
<li>We expect H2 FY25 to be a pause in the structural reform journey, and the details are discussed in this insight.</li>
<li>Trading at just 0.8x P/B, we continue to like the name and remain optimistic about the second Mid-Term Management Plan; details are shared in this insight.</li>
</ul>



ROHM Co Ltd (6963 JP) 's strong performance in H1 FY25 is overshadowed by weak guidance for H2 FY25.
We expect H2 FY25 to be a pause in the structural reform journey, and the details are discussed in this insight.
Trading at just 0.8x P/B, we continue to like the name and remain optimistic about the second Mid-Term Management Plan; details are shared in this insight.


Rohm Co Ltd(6963 JP): H2 Likely a Pause in the Journey; Bigger Milestones Ahead

David Blennerhassett

<ul>
<li>You wouldn't short <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a>. Look to add on a big dip.</li>
<li>
<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy</a><a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener"> (2688 HK)</a> remains a challenging situation. But arguably there is upside potential here; but it's not a high conviction trade.</li>
<li>Large treasury share cancellations in vogue from the likes of <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/sk-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:393:1" rel="noopener">SK Inc (034730 KS)</a>, among a slew others.</li>
</ul>


You wouldn't short ROHM Co Ltd (6963 JP). Look to add on a big dip.

ENN Energy (2688 HK) remains a challenging situation. But arguably there is upside potential here; but it's not a high conviction trade.
Large treasury share cancellations in vogue from the likes of Samsung Electronics (005930 KS), SK Inc (034730 KS), among a slew others.


Last Week In Event SPACE: ROHM, ENN Energy, Samsung Electronics, SK Inc, JCNC/Astra

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Rohm has backed off its March 9 spike high, but is still up 45% year-to-date. Denso's proposed takeover has been discounted.</li>
<li>Rohm is reportedly talking with Toshiba about combining their power device businesses. This could delay an attempted takeover and make it more expensive. </li>
<li>The Japanese government favors semiconductor industry consolidation, but the three companies could collaborate in automotive power devices without a takeover.</li>
</ul>


Rohm has backed off its March 9 spike high, but is still up 45% year-to-date. Denso's proposed takeover has been discounted.
Rohm is reportedly talking with Toshiba about combining their power device businesses. This could delay an attempted takeover and make it more expensive. 
The Japanese government favors semiconductor industry consolidation, but the three companies could collaborate in automotive power devices without a takeover.


Japan

ROHM COMPANY LIMITED manufactures custom linear integrated circuits and semiconductor devices for use primarily in consumer electronics.  The Company has plants and sales offices worldwide.  Rohm's subsidiaries include Wako Electric and Apollo Electronics.

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ROHM Co Ltd (6963 JP)

[Japan M&A] - Denso Withdraws Rohm (6963) Takeover Proposal - Now It's Just Value

Denso approached Rohm with a takeover proposal. Rohm shares popped. Then rose further (with reason). Now Denso has walked away. The knee-jerk...

Travis Lundy

[Japan M&A] Rohm (6963) - Refreshing Rohm's Stake Value in Toshiba, and Thinking About NEWCO

Adding Mitsubishi Elec to Toshiba/Rohm talks on combining power semi businesses is worded as if its in a hurry. That's good. NEWCO adds value....

Travis Lundy