Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The "Accelerated Share Repurchase" construct for share repurchases is used with some degree of regularity in the United States. It is theoretically legal, but heretofore unused, in Japan to-date.</li>
<li>Home improvement retailer <a href="https://www.smartkarma.com/entities/joyful-honda-co-ltd" target="_blank" data-smartkarma-citation="entities:13616:1" rel="noopener">Joyful Honda (3191 JP)</a> today announced a buyback of ¥2.5bn, in line with the Share Repurchase Plan announcement made in early June.  That's the first step.</li>
<li>The rest is pretty easy and straight-forward, but given its novelty, it may deserve explanation.</li>
</ul>


The "Accelerated Share Repurchase" construct for share repurchases is used with some degree of regularity in the United States. It is theoretically legal, but heretofore unused, in Japan to-date.
Home improvement retailer Joyful Honda (3191 JP) today announced a buyback of ¥2.5bn, in line with the Share Repurchase Plan announcement made in early June.  That's the first step.
The rest is pretty easy and straight-forward, but given its novelty, it may deserve explanation.


Joyful Honda Conducts Japan's First* Official ASR - And It Remains Cheap on an MBO Framework

<ul>
<li>Silchester International Investors targeted the AGMs of four Japanese regional banks in which it had held shares for 12-17yrs writing open letters, and asking each for a small special dividend.</li>
<li>One was heavily over-capitalised and significant cross-holding owning <a href="https://www.smartkarma.com/entities/chugoku-bank-ltd" target="_blank" data-smartkarma-citation="entities:11177:1" rel="noopener">Chugoku Bank (8382 JP)</a> </li>
<li>Their Shareholder Proposal flopped badly. The shareholder structure isn't there to support it, now or in future, and among regional banks, this is on the "less attractive" side valuation-wise.</li>
</ul>


Silchester International Investors targeted the AGMs of four Japanese regional banks in which it had held shares for 12-17yrs writing open letters, and asking each for a small special dividend.
One was heavily over-capitalised and significant cross-holding owning Chugoku Bank (8382 JP) 
Their Shareholder Proposal flopped badly. The shareholder structure isn't there to support it, now or in future, and among regional banks, this is on the "less attractive" side valuation-wise.


JAPAN ACTIVISM:  Silchester's Chugoku Bank AGM Ploy Fails - Won't Be an Activism Target

<ul>
<li>Silchester has written letters to four Japanese regional banks where they hold large stakes asking for higher dividends and payout ratios. It has proposed a special div AGM agenda item.</li>
<li>
<a href="https://www.smartkarma.com/entities/bank-of-iwate-ltd" target="_blank" data-smartkarma-citation="entities:6171:1" rel="noopener">Bank Of Iwate (8345 JP)</a> is nearly 40% held by cross-holders and government-affiliated entities, and Real World Float is less than 50%. Winning at the AGM is tough.</li>
<li>The collection of banks is mixed. But this one is cheap. Cheap as chips. Or cheaper.</li>
</ul>


Silchester has written letters to four Japanese regional banks where they hold large stakes asking for higher dividends and payout ratios. It has proposed a special div AGM agenda item.

Bank Of Iwate (8345 JP) is nearly 40% held by cross-holders and government-affiliated entities, and Real World Float is less than 50%. Winning at the AGM is tough.
The collection of banks is mixed. But this one is cheap. Cheap as chips. Or cheaper.


JAPAN ACTIVISM: Silchester Goes After Bk of Iwate - Cheaper Than Chips

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

SBI Sumishin Net Bank  / Equity Capital Markets

<ul>
<li>SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.</li>
<li>SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. </li>
<li>The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we will talk about our earnings forecast and throughts in valuations.</li>
</ul>


SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO.
SSNB is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group, a financial services firm. 
The deal, if successful, would be Japan’s first online-only bank to go public. In this note, we will talk about our earnings forecast and throughts in valuations.


SBI Sumishin Net Bank Pre-IPO - Earnings Forecast and Thoughts on Valuations

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591)</a> replaces <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a> at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.</li>
<li>We estimate there will be passive buying of 27.5m shares on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> while there will be selling of 2.75m shares on <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> </li>
<li>There appears to be some pre-positioning on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> - the stock could outperform heading into index inclusion. </li>
</ul>



Orix Corp (8591) replaces Shinsei Bank (8303) in the Nikkei 225 at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.
We estimate there will be passive buying of 27.5m shares on Orix Corp (8591 JP) while there will be selling of 2.75m shares on Shinsei Bank (8303 JP) 
There appears to be some pre-positioning on Orix Corp (8591 JP) - the stock could outperform heading into index inclusion. 


Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

Japan

SBI Holdings, Inc. manages venture capital fund which mainly invest in Internet related venture companies.  The Company also provides brokerage, investment banking, and financial services.

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SBI Holdings (8473 JP)

Joyful Honda Conducts Japan's First* Official ASR - And It Remains Cheap on an MBO Framework

DIY store operator Joyful Honda has improved earnings structure and shareholder payout dramatically in the last five years. It has bought back...

Travis Lundy

JAPAN ACTIVISM: Silchester's Chugoku Bank AGM Ploy Fails - Won't Be an Activism Target

Silchester targeted Chugoku Bank for cross-holdings. CB rejected them. Silchester asked the AGM for a small div, shareholders rejected them. It's...

Travis Lundy

JAPAN ACTIVISM: Silchester Goes After Bk of Iwate - Cheaper Than Chips

Bank of Iwate is the smallest (so far) of Silchester Int'l Investors' regional bank AGM proposal letters. It owns 11%. This one is tough too, but...

Travis Lundy

SBI Sumishin Net Bank Pre-IPO - Earnings Forecast and Thoughts on Valuations

SBI Sumishin Net Bank (SSNB) will be looking to raise around US$1.1bn in its upcoming IPO. In this note, we talk about our earnings forecast and...

Sumeet Singh

Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

Orix Corp replaces Shinsei Bank in the Nikkei225 Index at the close on 1 April. Passive trackers will need to buy 27.5m shares of Orix and sell...

Brian Freitas

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