Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of JPX stocks as of Feb 20th. The aggregated net margin trading position is USD24,230m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Kioxia, Hitachi, Mitsubishi UFJ Financial, Advantest, Mizuho Financial, Mitsubishi Heavy Industries, Fujikura, Keyence, Fast Retailing, Kandenko.</li>
</ul>


We analyzed the changes in margin trading positions of JPX stocks as of Feb 20th. The aggregated net margin trading position is USD24,230m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Kioxia, Hitachi, Mitsubishi UFJ Financial, Advantest, Mizuho Financial, Mitsubishi Heavy Industries, Fujikura, Keyence, Fast Retailing, Kandenko.


JPX Margin Trading Weekly (Feb 20th): Kioxia, Hitachi, Mitsubishi UFJ Financial, Advantest

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>'s Partial Offer for <a href="https://www.smartkarma.com/entities/tsuruha-holdings-inc" target="_blank" data-smartkarma-citation="entities:9536:1" rel="noopener">Tsuruha Holdings (3391 JP)</a> discussed in <em><a href="https://www.smartkarma.com/insights/japan-partial-tender-aeon-8267-partial-offer-for-tsuruha-3391-announced-at-2-900-share" target="_blank" data-smartkarma-citation="insights:213005" rel="noopener">[Japan Partial Tender] AEON (8267) Partial Offer for TSURUHA (3391) Announced at ¥2,900/Share</a></em> is trading rich.</li>
<li>The Conclusions/Trade section was clear on the near-term risks. There was good short-term upside. There may be less with the stock trading 0.5% away from the tender price.</li>
<li>With the stock trading so close, it changes the calculus, in both directions.</li>
</ul>



Aeon Co Ltd (8267 JP)'s Partial Offer for Tsuruha Holdings (3391 JP) discussed in [Japan Partial Tender] AEON (8267) Partial Offer for TSURUHA (3391) Announced at ¥2,900/Share is trading rich.
The Conclusions/Trade section was clear on the near-term risks. There was good short-term upside. There may be less with the stock trading 0.5% away from the tender price.
With the stock trading so close, it changes the calculus, in both directions.


[Japan Partial Tender] AEON (8267) Tender for TSURUHA (3391) Trading Rich

<ul>
<li>Tsuruha and Welcia are on the road to a merger, where Tsuruha takes over Welcia but Aeon ends up owning "more than 50% but less than 51%" of Tsuruha.</li>
<li>The Price Ratio is now 4.24x. Trailing EPS ratios is &gt;5. Forward EPS ratios are further above 5. BVPS ratio? Near 5. Welcia grows storecount. Tsuruha makes more money/store.</li>
<li>Tsuruha changed its FY-end to match that of Welcia/Aeon so both will report earnings/guidance in just over 3 weeks. That will likely influence the ratio.</li>
</ul>


Tsuruha and Welcia are on the road to a merger, where Tsuruha takes over Welcia but Aeon ends up owning "more than 50% but less than 51%" of Tsuruha.
The Price Ratio is now 4.24x. Trailing EPS ratios is &gt;5. Forward EPS ratios are further above 5. BVPS ratio? Near 5. Welcia grows storecount. Tsuruha makes more money/store.
Tsuruha changed its FY-end to match that of Welcia/Aeon so both will report earnings/guidance in just over 3 weeks. That will likely influence the ratio.


Tsuruha (3391) - Welcia (3141) - Tsuruha Earnings In a Week - Still Good To Be Long The Ratio

<ul>
<li>The drugstore space in Japan is super-interesting. The stories, the mergers, the activists. And of course, the defence against activists.</li>
<li>In Feb-2024, Aeon did a deal with an activist to cause a future deal between Tsuruha and Welcia. Aeon also owns a stake in <a href="https://www.smartkarma.com/entities/kusuri-no-aoki-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:27329:1" rel="noopener">Kusuri no Aoki Holdings (3549 JP)</a>. </li>
<li>The Aoki brothers (CEO and VP) exercised warrants in August and re-arranged their holdings. Now the family owns 34.7%. Today, after Q1 earnings, the company announced a 5+% buyback.</li>
</ul>


The drugstore space in Japan is super-interesting. The stories, the mergers, the activists. And of course, the defence against activists.
In Feb-2024, Aeon did a deal with an activist to cause a future deal between Tsuruha and Welcia. Aeon also owns a stake in Kusuri no Aoki Holdings (3549 JP). 
The Aoki brothers (CEO and VP) exercised warrants in August and re-arranged their holdings. Now the family owns 34.7%. Today, after Q1 earnings, the company announced a 5+% buyback.


Kusuri No Aoki (3549) Big Buyback - Accretive, And May Involve Musical Shares

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. 

<ul>
<li>Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.</li>
<li>Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.</li>
<li>But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon's massive potential dominance.</li>
</ul>


Aeon will almost definitely increase its stake in Tsuruha Holdings, which on its own will catalyse drugstore competitors to consider their mergeable options.
Tsuruha MAY merge with Welcia under Aeon and just talk of this will catalyse drugstore competitors even more.
But the ongoing fusion of drugstore retailing and FMCG formats like supermarkets and convenience stores, will also spur the entire FMCG sector to respond to Aeon's massive potential dominance.


Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

Japan

SUGI HOLDINGS CO., LTD. operates a chain of drug stores located mainly in Aichi Prefecture.  The Company sells prescription and nonprescription medicine, cosmetics, health foods, and general merchandise.

Price Gauge
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Sugi Holdings (7649 JP)

JPX Margin Trading Weekly (Feb 20th): Kioxia, Hitachi, Mitsubishi UFJ Financial, Advantest

We analyzed JPX margin trading positions report for the past week and highlighted Kioxia (285A JP), Hitachi (6501 JP), Mitsubishi UFJ Financial...

Ke Yan, CFA, FRM

[Japan Partial Tender] AEON (8267) Tender for TSURUHA (3391) Trading Rich

Tsuruha trading rich again. Arb opportunities are options. One doesn't have to trade a certain way simply because one has a position (stock or...

Travis Lundy

Tsuruha (3391) - Welcia (3141) - Tsuruha Earnings In a Week - Still Good To Be Long The Ratio

The Tsuruha/Welcia trade is a good-looking "guess the ratio" trade because Tsuruha wins on PBR, PER, forward PER, etc. The price ratio should be...

Travis Lundy

Kusuri No Aoki (3549) Big Buyback - Accretive, And May Involve Musical Shares

Activist-pressured Kusuri no Aoki reports Q1 earnings and a 5+% buyback. The seller could be a cross-holder after the Aoki brothers upped their...

Travis Lundy

Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...

Michael Causton

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

JPX Margin Trading Weekly (Feb 20th): Kioxia, Hitachi, Mitsubishi UFJ Financial, Advantest

We analyzed JPX margin trading positions report for the past week and highlighted Kioxia (285A JP), Hitachi (6501 JP), Mitsubishi UFJ Financial...

Ke Yan, CFA, FRM

[Japan Partial Tender] AEON (8267) Tender for TSURUHA (3391) Trading Rich

Tsuruha trading rich again. Arb opportunities are options. One doesn't have to trade a certain way simply because one has a position (stock or...

Travis Lundy

Tsuruha (3391) - Welcia (3141) - Tsuruha Earnings In a Week - Still Good To Be Long The Ratio

The Tsuruha/Welcia trade is a good-looking "guess the ratio" trade because Tsuruha wins on PBR, PER, forward PER, etc. The price ratio should be...

Travis Lundy

Kusuri No Aoki (3549) Big Buyback - Accretive, And May Involve Musical Shares

Activist-pressured Kusuri no Aoki reports Q1 earnings and a 5+% buyback. The seller could be a cross-holder after the Aoki brothers upped their...

Travis Lundy

Aeon (Maybe) Gets Tsuruha, Could Trigger Wave of Mergers in the Sector (And Beyond)

​Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...

Michael Causton

Aeon's potential increased stake in Tsuruha Holdings and possible merger with Welcia will likely prompt drugstore competitors to consider their...