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/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life Insurance (8750 JP)</a> announced a TOB for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a> having agreed a deal with <a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> to sell into a buyback.</li>
<li>Pasona will get ¥1,526/share, and having agreed, it <a href="https://www.pasonagroup.co.jp/LinkClick.aspx?fileticket=o93EYocia9U%3d&amp;tabid=100&amp;mid=460" target="_blank" rel="noopener">announced</a> the expected special profit to be booked in the FY to 31 May 2024.</li>
<li>At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.</li>
</ul>


Today, Dai Ichi Life Insurance (8750 JP) announced a TOB for Benefit One Inc (2412 JP) having agreed a deal with Pasona Group (2168 JP) to sell into a buyback.
Pasona will get ¥1,526/share, and having agreed, it announced the expected special profit to be booked in the FY to 31 May 2024.
At ¥113.6bn on a consolidated basis (¥122.3bn on parent), less ¥1.165bn of associated costs, that's ¥112.4bn at the lower end. That's ¥2,870/share. Then there's the rest of the business.


Pasona (2168) - Less Wrong Than Before But How Wrong Still Depends on Nambu-San

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group</a>, <a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings</a>, <a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1" rel="noopener">Kobayashi Pharmaceutical</a>, <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings</a>, <a href="https://www.smartkarma.com/entities/temp-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1428:1" rel="noopener">Persol Holdings</a>, <a href="https://www.smartkarma.com/entities/kurita-water-industries-ltd" target="_blank" data-smartkarma-citation="entities:3870:1" rel="noopener">Kurita Water Industries</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway</a>, <a href="https://www.smartkarma.com/entities/keio-corp" target="_blank" data-smartkarma-citation="entities:1223:1" rel="noopener">Keio Corp</a> and <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" data-smartkarma-citation="entities:12580:1" rel="noopener">NGK Insulators</a> have underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei225</a> over the recent past.</li>
<li>The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.</li>
<li>Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.</li>
</ul>



CyberAgent, Lixil Group, Hakuhodo Dy Holdings, Kobayashi Pharmaceutical, Welcia Holdings, Persol Holdings, Kurita Water Industries, GMO Payment Gateway, Keio Corp and NGK Insulators have underperformed the Nikkei225 over the recent past.
The underperformance could lead to adjustments in global passive portfolios and liquidity events on some of the stocks.
Short interest has increased on some stocks and there could be more pre-positioning to come over the next few weeks.


Japan - Increase in Shorts on Some Interesting** Stocks

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>TRYT’s shares started trading on TSE on 24th July. The IPO was priced at ¥1,200 per share and closed at ¥876 per share at the end of first day trading.</li>
<li>The company’s shares are currently trading at around ¥900 per share, at a 25% discount to <a href="https://www.smartkarma.com/entities/tryt-inc" target="_blank" data-smartkarma-citation="entities:39870:1" rel="noopener">TRYT (9164 JP)</a> 's IPO price.</li>
<li>We recommended staying on the sidelines as the company’s IPO was overvalued and our DCF valuation suggests that shares are fairly valued at the current price.</li>
</ul>


TRYT’s shares started trading on TSE on 24th July. The IPO was priced at ¥1,200 per share and closed at ¥876 per share at the end of first day trading.
The company’s shares are currently trading at around ¥900 per share, at a 25% discount to TRYT (9164 JP) 's IPO price.
We recommended staying on the sidelines as the company’s IPO was overvalued and our DCF valuation suggests that shares are fairly valued at the current price.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tryt-inc" target="_blank" data-smartkarma-citation="entities:39870:1" rel="noopener">Tryt Inc (9164 JP)</a> priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/tryt-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:105670" rel="noopener">TRYT IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/tryt-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:105712" rel="noopener">TRYT IPO: The Bear Case</a>, <a href="https://www.smartkarma.com/insights/tryt-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:106020" rel="noopener">TRYT IPO: Valuation Insights</a> and <a href="https://www.smartkarma.com/insights/tryt-ipo-revised-ipo-price-range-remains-unattractive" target="_blank" data-smartkarma-citation="insights:106233" rel="noopener">TRYT IPO: Revised IPO Price Range Remains Unattractive</a>. </li>
<li>The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.</li>
</ul>



Tryt Inc (9164 JP) priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.
We previously discussed the IPO in TRYT IPO: The Bull Case, TRYT IPO: The Bear Case, TRYT IPO: Valuation Insights and TRYT IPO: Revised IPO Price Range Remains Unattractive. 
The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.


<ul>
<li>TRYT has priced its IPO at ¥1,200 per share, at the midpoint of the indicative IPO price range, at a market capitalisation and post-money EV of ¥120bn and ¥151.6bn respectively.</li>
<li>In our previous insight, we compared the company’s implied trailing multiples with peer trailing multiples and concluded that TRYT’s IPO is overvalued at the above price range.</li>
<li>In this insight, we have discussed our forecasts for <a href="https://www.smartkarma.com/entities/tryt-inc" target="_blank" data-smartkarma-citation="entities:39870:1" rel="noopener">Tryt Inc (9164 JP)</a> and updated our valuation for the company.</li>
</ul>


TRYT has priced its IPO at ¥1,200 per share, at the midpoint of the indicative IPO price range, at a market capitalisation and post-money EV of ¥120bn and ¥151.6bn respectively.
In our previous insight, we compared the company’s implied trailing multiples with peer trailing multiples and concluded that TRYT’s IPO is overvalued at the above price range.
In this insight, we have discussed our forecasts for Tryt Inc (9164 JP) and updated our valuation for the company.


Japan

TechnoPro Holdings, Inc. offers services and solutions in mechanical and electronic design, IT and software development, and wide range of technological fields through outsourcing. The Company also has presence in biological, chemical and construction management businesses.

Technopro Holdings (6028 JP)

Pasona (2168) - Less Wrong Than Before But How Wrong Still Depends on Nambu-San

Pasona will get its bundle of cash selling Benefit One. That will leave ~¥135bn of net cash against a ¥60bn match-off of prepays vs A/R vs a ¥107bn...

Travis Lundy

Japan - Increase in Shorts on Some Interesting** Stocks

There are a few stocks in Japan that have underperformed the NKY over the last few months and that could lead to a liquidity event due to the...

Brian Freitas

TRYT IPO: Down 25% and Upside Is Limited

TRYT's shares are down 25% from the IPO price. Though at a glance, it seems exciting that the above price drop could help gain on the Long Side,...

Shifara Samsudeen, ACMA, CGMA

TRYT IPO: Trading Debut

The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best,...

Arun George

TRYT IPO: Valuation Updates

TRYT's IPO is priced at ¥1,200 per share, at the midpoint of the indicative IPO price range of ¥1,100-1,300 per share. In this insight, we discuss...

Shifara Samsudeen, ACMA, CGMA