Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today <a href="https://www.smartkarma.com/entities/shinoken-group-co-ltd" target="_blank" data-smartkarma-citation="entities:17040:1" rel="noopener">Shinoken Group (8909 JP)</a> announced it was the subject of an MBO where the CEO-founder invited Integral - a local PE fund - to help him restructure and grow.</li>
<li>It is at a 45% premium to last, and management negotiated the price from a relatively insulting initial bid of ¥1,300 to ¥1,600 in the end, but it's still light.</li>
<li>It is not hugely light, but it is not a full price. It could definitely be a bit higher. The question is whether active foreigners will push. </li>
</ul>


Today Shinoken Group (8909 JP) announced it was the subject of an MBO where the CEO-founder invited Integral - a local PE fund - to help him restructure and grow.
It is at a 45% premium to last, and management negotiated the price from a relatively insulting initial bid of ¥1,300 to ¥1,600 in the end, but it's still light.
It is not hugely light, but it is not a full price. It could definitely be a bit higher. The question is whether active foreigners will push. 


Shinoken (8909) MBO - Decent Premium, Still Light, Will Someone Push?

David Blennerhassett

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review will be conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on April-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review will be conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on April-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for April-End

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div>
<p>A periodic review will be conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p>
<p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event. Below is a discussion on the latest adjustments required for the basket portfolio based on March-end data. </p>
</div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.
A periodic review will be conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. 
Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event. Below is a discussion on the latest adjustments required for the basket portfolio based on March-end data. 


JPX-Nikkei 400 Rebalance: Pre-Event Basket Adjustments for March-End

<p><a href="https://www.smartkarma.com/entities/shinoken-group-co-ltd" target="_blank" data-smartkarma-citation="entities:17040:1" rel="noopener">Shinoken Group (8909 JP)</a> - short for Shinohara Kensetsu - was founded 30 years ago by Hideaki Shinohara who set up the company as a 25-year old after starting a few years earlier at a real estate company. </p><p>The company has grown from something small to something relatively large and the company has been aggressive. It makes most of its money through real estate sales and service, and some money through self-contracting. There are other businesses which are quite decent and could get better - add-ons to the real estate service business which has been a real winner. </p><p>Over the years, the company has grown through both organic growth and M&amp;A. About 55% of net sales and 50% of Operating Income is through organic businesses. And the growth shown indicates that the company has been able to integrate some of these businesses quite successfully. Since 2017, the plan has been to move a great deal of the business away from real estate sales and more towards real estate service. They've done that pretty well (real estate sales was 77% of revenues in 2017, 48% last year)</p><p><strong>The New News on the 12th of February</strong> was that the company reported full-year profits and a <a href="https://www.shinoken.co.jp/presses/get_img/521/file1_path/20210212_521.pdf" target="_blank" rel="noopener">forecast</a> for 2021 where revenue was set to grow 10% but OP and NP were set to grow 0.2% and 0.8%, respectively. </p>

Shinoken Group (8909 JP) - short for Shinohara Kensetsu - was founded 30 years ago by Hideaki Shinohara who set up the company as a 25-year old after starting a few years earlier at a real estate company. The company has grown from something small to something relatively large and the company has been aggressive. It makes most of its money through real estate sales and service, and some money through self-contracting. There are other businesses which are quite decent and could get better - add-ons to the real estate service business which has been a real winner. Over the years, the company has grown through both organic growth and M&amp;A. About 55% of net sales and 50% of Operating Income is through organic businesses. And the growth shown indicates that the company has been able to integrate some of these businesses quite successfully. Since 2017, the plan has been to move a great deal of the business away from real estate sales and more towards real estate service. They've done that pretty well (real estate sales was 77% of revenues in 2017, 48% last year)The New News on the 12th of February was that the company reported full-year profits and a forecast for 2021 where revenue was set to grow 10% but OP and NP were set to grow 0.2% and 0.8%, respectively. 

Shinoken (8909) - Cheap Stock, Growth Lag, Governance Hiccup: "Gift" To Foundation Unlikely to Pass

Japan

Shinoken Group Co., Ltd. provides real estate related services including property management services and consulting services on the leasing properties. The Company also leases and sells real estate properties as an agent.

Shinoken Group (8909 JP)

Shinoken (8909) MBO - Decent Premium, Still Light, Will Someone Push?

Real estate developer and servicer Shinoken (8909) announced an MBO today. +45% premium but not a knockout. A competing bid is difficult, but...

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Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

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JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for April-End

JPX Nikkei 400 2021 Rebal Pre-Event L/S Basket +2.9% in April (thru the 28th). The 30th is rebal day for readers. 2 potential deletes and 7...

Janaghan Jeyakumar, CFA

JPX-Nikkei 400 Rebalance: Pre-Event Basket Adjustments for March-End

JPX Nikkei 400 Pre-Event Basket Bets - Every month-end we publish updated estimates for the August 2021 JPX Nikkei 400 Rebalance based on updated...

Janaghan Jeyakumar, CFA

Shinoken (8909) - Cheap Stock, Growth Lag, Governance Hiccup: "Gift" To Foundation Unlikely to Pass

Shinoken Group (8909) is a well put-together small real estate developer moving to more RE service. It's expanding, transforming, and cheap. There...

Travis Lundy