Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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

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>Trial was already one of Japan's leading discount retailers with a strong network of stores down south in Japan although rather low margins.</li>
<li>Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.</li>
<li>Together, the two will now be able to take on Aeon, Seven &amp; I, PPI and other major retailers in building the first true national grocery chains in Japan.</li>
</ul>


Trial was already one of Japan's leading discount retailers with a strong network of stores down south in Japan although rather low margins.
Buying Seiyu transforms this local retailer into a national champion and one of the top 10, with a highly complementary set of stores, product expertise, warehouses and tech.
Together, the two will now be able to take on Aeon, Seven &amp; I, PPI and other major retailers in building the first true national grocery chains in Japan.


Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)

<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

<ul>
<li>The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.</li>
<li>Today post-close we got the deal. I was a little surprised it came this fast, but it's now mostly done it appears - largely as predicted in the <a href="https://www.smartkarma.com/insights/tsuruha-3391-and-welcia-3141-aeon-tsuruha-stake-buy-followed-by-merger" target="_blank" rel="noopener">last piece</a>.</li>
<li>There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. </li>
</ul>


The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
Today post-close we got the deal. I was a little surprised it came this fast, but it's now mostly done it appears - largely as predicted in the last piece.
There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. 


Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

<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

SUNDRUG CO., LTD. operates an outlet drug store chain primarily in the Tokyo area.  The Company sells mainly medicines, cosmetics, baby care products, and household utensils.  Sundrug supplies merchandise to franchise stores.  The Company also operates a real estate business.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Sundrug Co Ltd (9989 JP)

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

Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)

Trial, a leading discounter in Japan, becomes a national champion by acquiring Seiyu, creating a strong competitor to major retailers in building...

Michael Causton

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

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

The idea of holding the potential targets (Sundrug, Sugi, Cosmo, Kusuri no Aoki, Create SD, Ain, Nihon Chozai) against a short (or implied short)...

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)

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

Trial a Top 10 Retailer After Seiyu Purchase from KKR (With Big Synergies)

​Trial, a leading discounter in Japan, becomes a national champion by acquiring Seiyu, creating a strong competitor to major retailers in building...

Michael Causton

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

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

The idea of holding the potential targets (Sundrug, Sugi, Cosmo, Kusuri no Aoki, Create SD, Ain, Nihon Chozai) against a short (or implied short)...

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

Trial, a leading discounter in Japan, becomes a national champion by acquiring Seiyu, creating a strong competitor to major retailers in building...

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