Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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 Bottom-Up

Monex delivered a reasonable 2Q though crypto revenue and PBT slightly undershot our estimates which were based on Coincheck trading volumes for Bitcoin. Nevertheless, with crypto threatening another breakout it is the future which matters and Monex’s shareholder return policy change is interesting.

Monex delivered a reasonable 2Q though crypto revenue and PBT slightly undershot our estimates which were based on Coincheck trading volumes for Bitcoin. Nevertheless, with crypto threatening another breakout it is the future which matters and Monex’s shareholder return policy change is interesting.

Monex – Shareholder Return Policy Change Signals Confidence

Monex is now up 15.2% in the eight days since we flagged that it had broken out of its downtrend. While that call was purely technical in nature, it is supported by a very cheap looking multiple and with bitcoin and ether threatening new highs, significant upside potential remains on the table.

Monex is now up 15.2% in the eight days since we flagged that it had broken out of its downtrend. While that call was purely technical in nature, it is supported by a very cheap looking multiple and with bitcoin and ether threatening new highs, significant upside potential remains on the table.

Monex is breaking out of its recent downtrend at a time when cryptocurrency prices are recovering. We have been consistently arguing that the name is cheap relative to peers and higher quality given proven management and shareholder friendliness.

Monex is breaking out of its recent downtrend at a time when cryptocurrency prices are recovering. We have been consistently arguing that the name is cheap relative to peers and higher quality given proven management and shareholder friendliness.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Just under three weeks ago, <a href="https://www.smartkarma.com/entities/nippo-corp" target="_blank" data-smartkarma-citation="entities:2583:1" rel="noopener">Nippo Corp (1881 JP)</a> parent company <a href="https://www.smartkarma.com/entities/eneos-holdings-inc" target="_blank" data-smartkarma-citation="entities:638:1" rel="noopener">ENEOS Holdings (5020 JP)</a> announced a slightly convoluted takeover of Nippo which was announced at a decidedly low price of ¥4,000/share. I wrote about this in <a href="https://www.smartkarma.com/insights/eneos-to-steamroll-nippo-1881-jp-minorities" target="_blank" data-smartkarma-citation="insights:57299" rel="noopener">ENEOS To Steamroll Nippo (1881 JP) Minorities</a>, calling the bid "egregiously low." I thought the "right price" was ¥1,500-2,000/share higher. I also thought that because of ENEOS' starting point, anyone who wanted to block it needed to go big and public with their opposition. I have long thought the issue of parent-sub takeovers and MBOs required more active (and passive) investor stewardship, and have published <a href="https://www.smartkarma.com/insights/japan-needs-more-cowbell" target="_blank" data-smartkarma-citation="insights:41191" rel="noopener">Japan Needs More Cowbell</a> about active investors and a kind of open letter to the former GPIF CIO Hiro Mizuno in the Financial Times, about <a href="https://www.ft.com/content/dd680521-a9cc-4b1c-922d-4787d2a314f6" target="_blank" rel="noopener">The GPIF and the Complexity of Stewardship</a>.On Friday we got a little noise as a small fund called the Monex Activist Mother Fund, managed by a fund management firm called Japan Catalyst, where the CIO is Oki Matsumoto, the current CEO of <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a>, put out a <a href="https://www.jiji.com/jc/article?k=000000005.000075293&amp;g=prt" target="_blank" rel="noopener">press release</a>.  More discussion of the opportunity and its parameters to date below.

Just under three weeks ago, Nippo Corp (1881 JP) parent company ENEOS Holdings (5020 JP) announced a slightly convoluted takeover of Nippo which was announced at a decidedly low price of ¥4,000/share. I wrote about this in ENEOS To Steamroll Nippo (1881 JP) Minorities, calling the bid "egregiously low." I thought the "right price" was ¥1,500-2,000/share higher. I also thought that because of ENEOS' starting point, anyone who wanted to block it needed to go big and public with their opposition. I have long thought the issue of parent-sub takeovers and MBOs required more active (and passive) investor stewardship, and have published Japan Needs More Cowbell about active investors and a kind of open letter to the former GPIF CIO Hiro Mizuno in the Financial Times, about The GPIF and the Complexity of Stewardship.On Friday we got a little noise as a small fund called the Monex Activist Mother Fund, managed by a fund management firm called Japan Catalyst, where the CIO is Oki Matsumoto, the current CEO of Monex Group Inc (8698 JP), put out a press release.  More discussion of the opportunity and its parameters to date below.

NIPPO (1881 JP) Gets Some Cowbell - It Probably Needs More

David Blennerhassett

<div>
That trade worked out well.
In my note <a href="https://skr.ma/eEB66" target="_blank" rel="noopener">Microstrategy (MSTR US): "Crypto Through The Tulips"</a> back on the 28 June, I recommended shorting <a href="https://www.smartkarma.com/entities/microstrategy-inc-cl-a" target="_blank" data-smartkarma-citation="entities:14717:1" rel="noopener">Microstrategy Inc Cl A (MSTR US)</a> and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its <a href="https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-acquires-additional-bitcoins-and-now-holds-over-105000-bitcoins-in-" target="_blank" rel="noopener">21 June 21</a> announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/764/original/image_1404123321631156413189.png?1631156418" class="editor-image img-responsive" data-smartkarma-image-id="228764"></figure>
MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/821/original/image_21363881771631163833057.png?1631163833" class="editor-image img-responsive" data-smartkarma-image-id="228821"></figure>
Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.
</div>


That trade worked out well.
In my note Microstrategy (MSTR US): "Crypto Through The Tulips" back on the 28 June, I recommended shorting Microstrategy Inc Cl A (MSTR US) and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its 21 June 21 announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.

MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.

Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.


Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

Japan

Monex Group, Inc. is a holding company, which was established through merger between Monex and Nikko Beans. The Company manages its subsidiaries that provides investing services for self-directed investors through Internet and telephone.

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Monex Group Inc (8698 JP)

Monex – Shareholder Return Policy Change Signals Confidence

Monex delivered just an OK 2Q but with crypto threatening another breakout it is the future which matters and Monex’s shareholder return policy...

Mio Kato

Monex – May Just Be Getting Started

Monex is now up 15.2% in the eight days since we flagged that it had broken out of its downtrend and with bitcoin and ether threatening new highs,...

Mio Kato

Monex – Breaking Out of Downtrend

Monex is breaking out of its downtrend as cryptocurrency prices are recovering. We have argued that the name is cheap and high quality given proven...

Mio Kato

NIPPO (1881 JP) Gets Some Cowbell - It Probably Needs More

A relatively little-known activistish-if-not-wholly-activist DOMESTIC fund has called out the ENEOS takeover of NIPPO as being under-priced with a...

Travis Lundy

Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

But my preference would be cryptocurrency exchange platforms, as they capture all key digital currencies, plus dumb down some of the volatility of...

David Blennerhassett

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