Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

KANSAI SUPER MARKET LTD. is a food supermarket chain operator which mainly deals in foodstuffs, daily products, and miscellaneous goods.  The Company has markets in Hyogo and Osaka areas.

<ul>
<li>Two and a half years ago, <a href="https://www.smartkarma.com/entities/h2o-retailing-corp" target="_blank" data-smartkarma-citation="entities:17562:1" rel="noopener">H2O Retailing (8242 JP)</a> the 10.9% owner, arranged to merge its own units into <a href="https://www.smartkarma.com/entities/kansai-super-market-ltd" target="_blank" data-smartkarma-citation="entities:15519:1" rel="noopener">Kansai Super Market (9919 JP)</a> to get control. OK Corp complained.</li>
<li>
OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. </li>
<li>
H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. </li>
</ul>


Two and a half years ago, H2O Retailing (8242 JP) the 10.9% owner, arranged to merge its own units into Kansai Super Market (9919 JP) to get control. OK Corp complained.

OK Corp offered to double the price in a Tender Offer but wouldn't go hostile. KSM/KFM said no go. Shares popped to ¥2,000+ then when the deal failed, they fell. 

H₂O ended up with 58% (64.9% of votes now). The ultimate goal was to swallow it paying zero premium. On 15 May, it announced the merger to do just that. 


Kansai Food Market (9919) Minorities Get Squeezed into H2O Retailing (8242)

RYOHIN KEIKAKU CO., LTD. is a retailer and wholesaler of Mujirushi Ryohin brand products, which were originally a generic private-brand product.  The Company's product line includes knitwear, food, and household items

<ul>
<li>The Sep 2024 Nikkei 225 Review data set is mostly done, and one can interpolate results relatively accurately. It still leaves us with one ADD, one DELETE, and capping fun.</li>
<li>Recently, Yanai-san sold more <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>. There is more Real World Float- more active holders own more stock (which may mean less interest to buy later).</li>
<li>There is a dark horse candidate which is on investor radar for other reasons. It would not be out of the question, but the precedent is old, and different.</li>
</ul>


The Sep 2024 Nikkei 225 Review data set is mostly done, and one can interpolate results relatively accurately. It still leaves us with one ADD, one DELETE, and capping fun.
Recently, Yanai-san sold more Fast Retailing (9983 JP). There is more Real World Float- more active holders own more stock (which may mean less interest to buy later).
There is a dark horse candidate which is on investor radar for other reasons. It would not be out of the question, but the precedent is old, and different.


Sep24 Nikkei 225 Rebal - Still 1 ADD (Ryohin Keikaku), 1 DELETE, and 1 Very Large Very Dark Horse

Japan Post Holdings Co. Ltd. operates post stations, banks, and insurance business. The Company offers letters and goods transportation services, stamp sales, deposits, loans, and insurance products.

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a> announced results (and Mar25 guidance) as did its subsidiaries <a href="https://www.smartkarma.com/entities/japan-post-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:840:1" rel="noopener">Japan Post Insurance (7181 JP)</a> and <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a>. </li>
<li>There are a number of interesting things in all the announcements/presentations but the most interesting one for JPH holders is a big buyback. Another one.</li>
<li>The company has announced a ¥350bn buyback. It is larger than last year's (¥300bn) buyback and has another important difference.</li>
</ul>


Today, Japan Post Holdings (6178 JP) announced results (and Mar25 guidance) as did its subsidiaries Japan Post Insurance (7181 JP) and Japan Post Bank (7182 JP). 
There are a number of interesting things in all the announcements/presentations but the most interesting one for JPH holders is a big buyback. Another one.
The company has announced a ¥350bn buyback. It is larger than last year's (¥300bn) buyback and has another important difference.


Japan Post Holdings (6178) - Bigger Better Bullish Buyback With Caveats

S LINE CO., LTD. provides trucking transportation services mainly in the Tokai and Kansai areas.  The Company develops on-line transport information system designed for efficient distribution services.  S Line offers international door-to-door shipping services as well.

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/s-line-co-ltd" target="_blank" data-smartkarma-citation="entities:8076:1" rel="noopener">S Line Co Ltd (9078 JP)</a> announced its CEO would conduct a Tender Offer MBO to buy out the ¥50bn-target revenue logistics company, at 0.6x book. </li>
<li>The company announced results with revenues up. But withdrew its existing MTMP which said revenues would be up 10% from here to March 2025 and ROE would be higher.</li>
<li>This is the wrong price. It should engender some upset, but active investors own almost nothing it seems. </li>
</ul>


Today, S Line Co Ltd (9078 JP) announced its CEO would conduct a Tender Offer MBO to buy out the ¥50bn-target revenue logistics company, at 0.6x book. 
The company announced results with revenues up. But withdrew its existing MTMP which said revenues would be up 10% from here to March 2025 and ROE would be higher.
This is the wrong price. It should engender some upset, but active investors own almost nothing it seems. 


S Line (9078 JP) TOB/MBO at 0.57x Book - Wrong Price by Far but Only AGGRESSIVE Activism Blocks It

USHIO INC. manufactures lamps and optical equipment including projectors for movie theaters.  The Company produces halogen and Houdentou lamps for semiconductor and office automation equipment.  Ushio has subsidiaries in the US, Canada, Germany, Hong Kong, Netherlands, Singapore, South Korea, and Taiwan.

<ul>
<li>Last year with earnings, <a href="https://www.smartkarma.com/entities/ushio-inc" target="_blank" data-smartkarma-citation="entities:6640:1" rel="noopener">Ushio Inc (6925 JP)</a> announced a HUUUGE buyback discussed in  <a href="https://www.smartkarma.com/insights/huuuge-ushio-6925-buyback" target="_blank" data-smartkarma-citation="insights:102028" rel="noopener">HUUUGE Ushio (6925) Buyback</a>. The headline was 17% of shares out. They ended up buying 13.2%. </li>
<li>Last year the stock popped on the news. Then shares went sideways for months. Then they went up on stable (bad) earnings guidance in H2. Today they beat Q3-updated guidance.</li>
<li>But today they announced a "<a href="https://www.ushio.co.jp/documents/ir/library/plan/ushio_plan2024_e.pdf" target="_blank" rel="noopener">new growth strategy</a>" to 2030, and guided to a SHARP (-60%) drop in OP and NP to March 2025, and announced a HUUUGE Buyback. Again.</li>
</ul>


Last year with earnings, Ushio Inc (6925 JP) announced a HUUUGE buyback discussed in  HUUUGE Ushio (6925) Buyback. The headline was 17% of shares out. They ended up buying 13.2%. 
Last year the stock popped on the news. Then shares went sideways for months. Then they went up on stable (bad) earnings guidance in H2. Today they beat Q3-updated guidance.
But today they announced a "new growth strategy" to 2030, and guided to a SHARP (-60%) drop in OP and NP to March 2025, and announced a HUUUGE Buyback. Again.


Another HUGE Ushio (6925) Buyback After A HUGE Buyback Last Year

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Travis Lundy
Pan-Asia Catalysts/Events
• Quiddity Advisors

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