Research on International Stock Ideas, Value Punks

Value Punks

Research on International Stock Ideas

Value Punks’ mission is to deliver institutional-grade research on international stock ideas in a digestible, reader-friendly format.

At Value Punks, we blend our background in traditional value-investing with an openness to embrace a constantly and rapidly evolving investment and business landscape.

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Equity Bottom-Up

Berkshire Hathaway Inc Cl B / Equity Bottom-Up

This is Part 1 of our exclusive deep dive on “Sogo Shosha”, or Japanese trading companies.We’ve decided to break this deep dive into two parts given its length.Part 1 will build the foundation and covers the business, history, and a discussion of Berkshire’s investment.

This is Part 1 of our exclusive deep dive on “Sogo Shosha”, or Japanese trading companies.We’ve decided to break this deep dive into two parts given its length.Part 1 will build the foundation and covers the business, history, and a discussion of Berkshire’s investment.

Deep Dive: Japanese Trading Companies (Part 1)

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On 8 November, major Japanese life insurer <a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced it would buy out leading pet insurer <a href="https://www.smartkarma.com/entities/ipet-holdings-inc" target="_blank" data-smartkarma-citation="entities:36551:1" rel="noopener">ipet Holdings (7339 JP)</a>. Yes, you read that right.</li>
<li>Japanese listed VC/PE firm and incubator <a href="https://www.smartkarma.com/entities/dream-incubator-inc" target="_blank" data-smartkarma-citation="entities:1229:1" rel="noopener">Dream Incubator Inc (4310 JP)</a> owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. </li>
<li>Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.</li>
</ul>


On 8 November, major Japanese life insurer Dai Ichi Life Insurance (8750 JP) announced it would buy out leading pet insurer ipet Holdings (7339 JP). Yes, you read that right.
Japanese listed VC/PE firm and incubator Dream Incubator Inc (4310 JP) owns 55% and agreed to tender. Tender success is dependent on getting 66.7%. 
Today the buyer extended for 10 days because it had received approval under Article 271-22 Para 1 of the Insurance Business Act, triggering a requirement to refile/extend.


IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.</li>
<li>Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.</li>
<li>The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.</li>
</ul>



Mitsui &amp; Co Ltd (8031 JP) on 1 November reported its results for H1 2022. H1 Revenue +37.1%yoy, OP+27.2%yoy, NP+33.2%yoy to ¥539bn. Full-year NP forecast +22.5% to ¥980bn.
Mitsui raised its dividend forecast (previously scheduled to rise from ¥105/share to ¥120/share) to ¥130/share and announced a ¥140bn buyback, adding to the ¥100bn announced in May completed in September.
The first ¥58.6bn was done in a ToSTNeT-3 buyback. Now there is another ¥79.4bn to go. There's also a fair bit of index selling the next 6mos.


Mitsui & Co (8031) Buyback - Big Profit, Big Div, Big Buyback, Some Index Selling

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Pan Pacific International Holdings / Equity Bottom-Up

Pan Pacific International Holdings (7532 JP)

<ul>
<li>PPI has begun roll out of new, specialty food stores designed to slot into a variety of shopping malls. </li>
<li>On the surface, these stores look like mini-Don Quijote stores, emphasising low prices and a dazzling density of product, but focused on sweets, liquor, cosmetics, or a combination.</li>
<li>Expansion will help reach new customers, reduce the expense of opening new stores, and help with building scale for private brands. </li>
</ul>


PPI has begun roll out of new, specialty food stores designed to slot into a variety of shopping malls. 
On the surface, these stores look like mini-Don Quijote stores, emphasising low prices and a dazzling density of product, but focused on sweets, liquor, cosmetics, or a combination.
Expansion will help reach new customers, reduce the expense of opening new stores, and help with building scale for private brands. 


<ul>
<li>Bain is getting the major execs to tender, and rolling <a href="https://www.smartkarma.com/entities/sojitz-corp" target="_blank" data-smartkarma-citation="entities:14437:1" rel="noopener">Sojitz Corp (2768 JP)</a>'s 23% into the post-Tender EGM vote. That gets them to 57+%. No majority of minority here. </li>
<li>But the equity check appears to be about 0.06x revenue, 4-5x PER, and takeover price EV at 4+ish years of forecast EBITDA. It's a good rollup for its ads business.</li>
<li>Too cheap, but not much you can do about it. Foreigners and financial holders own less than 0.5% of shares out. </li>
</ul>


Bain is getting the major execs to tender, and rolling Sojitz Corp (2768 JP)'s 23% into the post-Tender EGM vote. That gets them to 57+%. No majority of minority here. 
But the equity check appears to be about 0.06x revenue, 4-5x PER, and takeover price EV at 4+ish years of forecast EBITDA. It's a good rollup for its ads business.
Too cheap, but not much you can do about it. Foreigners and financial holders own less than 0.5% of shares out. 


Tri-Stage (2178 JP) MBO by Bain - Another Lowball Takeover Likely To Get Done

Japan

Sojitz Corporation is a general trading company.  The Company has business divisions such as Machinery & Aerospace, Energy & Mineral Resources, Chemicals & Plastics, Real Estate Development & Forest Products, Consumer Lifestyle Business, and New Business Development Group.  Sojitz was formed through the business integration between Nichimen and Nissho Iwai.

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Sojitz Corp (2768 JP)

Deep Dive: Japanese Trading Companies (Part 1)

This is Part 1 of our exclusive deep dive on “Sogo Shosha”, or Japanese trading companies. We’ve decided to break this deep dive into two parts...

Value Punks

IPet Holdings (7339 JP) - Tender Offer Extended But No Biggie

Dai Ichi Life today extended its TOB for iPet Holdings (7339). Sometimes an extension masks a potential bump to come. In this case I think not....

Travis Lundy

Mitsui & Co (8031) Buyback - Big Profit, Big Div, Big Buyback, Some Index Selling

Mitsui Corp last week announced strong results and upward guidance, especially in energy. Consensus says Mar-23 is the cycle peak. Higher div,...

Travis Lundy

Donki: New Formats, More Growth

Don Quijote has shrugged off the loss of the inbound tourist trade by focusing on what it does best: giving the consumer entertainment and a...

Michael Causton

Tri-Stage (2178 JP) MBO by Bain - Another Lowball Takeover Likely To Get Done

Tri-Stage (2178 JP) MBO sponsored by Bain. Small cap. Illiquid. Almost exclusively owned by domestic retail. But too cheap, so Sojitz refused to...

Travis Lundy

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