Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p><a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> ("CPP") a leading agri-food conglomerate in China and Vietnam, is currently <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0927/2021092700107.pdf" target="_blank" rel="noopener">suspended</a> pursuant to the Hong Kong Code on Takeovers and Mergers. There is, as yet, no further details forthcoming.</p>
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<p><a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a> (54%) and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> (25%) collectively control <a href="https://di.hkex.com.hk/di/NSAllSSList.aspx?sa2=as&amp;sid=64&amp;corpn=C.+P.+Pokphand+Co.+Ltd.&amp;sd=28/09/2014&amp;ed=28/09/2021&amp;cid=0&amp;sa1=cl&amp;scsd=28%2f09%2f2014&amp;sced=28%2f09%2f2021&amp;sc=43&amp;src=MAIN&amp;lang=EN&amp;g_lang=en&amp;" target="_blank" rel="noopener">79%</a> of CPP.</p>
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<p>This insight provides some background information on CPP, and also speculates on a fair price should a firm Offer unfold. </p>
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Cp Pokphand (43 HK) ("CPP") a leading agri-food conglomerate in China and Vietnam, is currently suspended pursuant to the Hong Kong Code on Takeovers and Mergers. There is, as yet, no further details forthcoming.

CP FOODS (CPF TB) (54%) and Itochu Corp (8001 JP) (25%) collectively control 79% of CPP.


This insight provides some background information on CPP, and also speculates on a fair price should a firm Offer unfold. 


C.P. Pokphand (43 HK): Suspended Pursuant To Takeovers Code

Travis Lundy

Pan Pacific International Holdings / Event-Driven

<p>Today after the close, <a href="https://www.smartkarma.com/entities/pan-pacific-international-holdings-corporation" target="_blank" data-smartkarma-citation="entities:13475:1" rel="noopener">Pan Pacific International Holdings (7532 JP)</a> announced two things (in Japanese only).</p><ol>
<li>PPIH was <a href="https://ppih.co.jp/news/210906_2.pdf" target="_blank" rel="noopener">registering for a bond issuance</a> for up to ¥300bn, and</li>
<li>PPIH would <a href="https://ppih.co.jp/news/210906.pdf" target="_blank" rel="noopener">buy back</a> up to 38,054,300 shares tomorrow morning on ToSTNeT-3 before the open, for up to ¥80.94bn. </li>
</ol><p>The second states that FamilyMart, which bought just over 10% of the company in the market starting in 2019 after</p><ol style="list-style-type: lower-alpha;">
<li>selling the rest of its UNY business to PPIH, and</li>
<li>attempting to buy 20% of PPIH in a Partial Tender Offer, which was much discussed on Smartkarma (see <a href="https://www.smartkarma.com/insights/familymart-tender-offer-for-don-quijote-misses-the-mark-as-mr-partridge-stands-pat" target="_blank" rel="noopener">this insight</a> for the result of the Tender Offer to see the earlier ones in the stream)....       ....and missing because almost nobody would sell their shares to FamilyMart</li>
</ol><p>... will sell 38,054,300 shares into the buyback. </p><p>The second statement is odd so merits a quick discussion. And there are opportunities for those who care.  As of Monday's close and consensus forecast Net Income to June 2022, PPIH's forward PER has hit a 20.x handle. That is good, but despite that, the market was not terribly supportive of last month's earnings/guidance release.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/188/original/Screenshot+2021-09-06+at+10.57.11+PM.png?1630940269" class="editor-image img-responsive" data-smartkarma-image-id="228188"></figure><p></p></section><p>As always, more below the fold. </p>

Today after the close, Pan Pacific International Holdings (7532 JP) announced two things (in Japanese only).
PPIH was registering for a bond issuance for up to ¥300bn, and
PPIH would buy back up to 38,054,300 shares tomorrow morning on ToSTNeT-3 before the open, for up to ¥80.94bn. 
The second states that FamilyMart, which bought just over 10% of the company in the market starting in 2019 after
selling the rest of its UNY business to PPIH, and
attempting to buy 20% of PPIH in a Partial Tender Offer, which was much discussed on Smartkarma (see this insight for the result of the Tender Offer to see the earlier ones in the stream)....       ....and missing because almost nobody would sell their shares to FamilyMart
... will sell 38,054,300 shares into the buyback. The second statement is odd so merits a quick discussion. And there are opportunities for those who care.  As of Monday's close and consensus forecast Net Income to June 2022, PPIH's forward PER has hit a 20.x handle. That is good, but despite that, the market was not terribly supportive of last month's earnings/guidance release.As always, more below the fold. 

PPIH (7532 JP) ToSTNeT-3 Buyback - The Alliance Is Strong, so FamilyMart Is Selling Shares

Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

<p>Google is reportedly close to acquiring smartphone settlements company Pring for ¥20-30bn which would open the door for it to offer a mobile payments service in Japan directly linked to bank accounts. And that is the appeal of Pring which is a relative minnow in the Japanese payments market with &lt;1mn users but has relationships with a wide range of Japanese financial institutions. Google is not a global fintech player but it has had some success in a few markets like the US and India whilst it has started to expand in Europe, and now apparently, Japan. Competitively, the major domestic players with vast consumer ecosystems are formidable competition but Google connects to half of all smartphone users through Android and has merchant relationships through its Internet advertising business.</p>

Google is reportedly close to acquiring smartphone settlements company Pring for ¥20-30bn which would open the door for it to offer a mobile payments service in Japan directly linked to bank accounts. And that is the appeal of Pring which is a relative minnow in the Japanese payments market with &lt;1mn users but has relationships with a wide range of Japanese financial institutions. Google is not a global fintech player but it has had some success in a few markets like the US and India whilst it has started to expand in Europe, and now apparently, Japan. Competitively, the major domestic players with vast consumer ecosystems are formidable competition but Google connects to half of all smartphone users through Android and has merchant relationships through its Internet advertising business.

Japan Fintech - Google Push into Mobile Payments Could Raise Competitive Intensity

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

<p><a href="https://www.smartkarma.com/entities/mitsubishi-corp" target="_blank" data-smartkarma-citation="entities:20668:1" rel="noopener">Mitsubishi Corp (8058 JP)</a> has had a longstanding interest in Japan’s third largest convenience store chain, <a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>, for quite some time, lifting its stake in Lawson to 50.1% from 33.4% in 2016 via a tender offer at ¥8,650 per share.</p>
<p>With <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> acquiring 100% of <a href="https://www.smartkarma.com/entities/familymart-co-ltd" target="_blank" data-smartkarma-citation="entities:320:1" rel="noopener">FamilyMart Co Ltd (8028 JP)</a> mid-way through last year and <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> standing strong on its own, Lawson has become even more important to Mitsubishi’s food processing and distribution businesses. At 1.35x Topix, Lawson is currently trading at a <a target="_blank">new historical low level relative to the Topix </a>index and could perhaps lure Mitsubishi into taking full control.</p>

Mitsubishi Corp (8058 JP) has had a longstanding interest in Japan’s third largest convenience store chain, Lawson Inc (2651 JP), for quite some time, lifting its stake in Lawson to 50.1% from 33.4% in 2016 via a tender offer at ¥8,650 per share.
With Itochu Corp (8001 JP) acquiring 100% of FamilyMart Co Ltd (8028 JP) mid-way through last year and Seven &amp; I Holdings (3382 JP) standing strong on its own, Lawson has become even more important to Mitsubishi’s food processing and distribution businesses. At 1.35x Topix, Lawson is currently trading at a new historical low level relative to the Topix index and could perhaps lure Mitsubishi into taking full control.

Lawson: Primed for Mitsubishi to Take Full Control

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> and <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>. Shorts increased in Communication Services, Information Technology and Materials stocks, while decreasing in Utilities, Consumer Staples, Energy, Consumer Discretionary and Health Care stocks.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <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> and <a href="https://www.smartkarma.com/entities/nihon-m-a-center-inc" target="_blank" data-smartkarma-citation="entities:17616:1" rel="noopener">Nihon M&amp;A Center (2127 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>, <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>, <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> and <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a>. Shorts increased in Consumer Staples, Industrials, Financials and Materials, while shorts covered in the Consumer Discretionary sector.</p></div><div><p>In Korea, short increased on <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/lotte-chemical-corp" target="_blank" data-smartkarma-citation="entities:8757:1" rel="noopener">Lotte Chemical (011170 KS)</a>, <a href="https://www.smartkarma.com/entities/posco-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12421:1" rel="noopener">Posco Chemical Co Ltd (003670 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/korea-electric-power-corp" target="_blank" data-smartkarma-citation="entities:16:1" rel="noopener">Korea Electric Power (015760 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/fitipower-integrated-tech" target="_blank" data-smartkarma-citation="entities:8712:1" rel="noopener">Fitipower Integrated Tech (4961 TT)</a> and <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a> and <a href="https://www.smartkarma.com/entities/richwave-technology-corp" target="_blank" data-smartkarma-citation="entities:18629:1" rel="noopener">Richwave Technology (4968 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Xinyi Solar Holdings (968 HK), Lenovo (992 HK), Ping An Insurance (H) (2318 HK), Kuaishou Technology (1024 HK) and JD Health (6618 HK) while there was short covering on Alibaba Group (9988 HK), Xiaomi Corp (1810 HK), Haier Smart Home Co Ltd (6690 HK), WuXi AppTec Co. Ltd. (2359 HK) and AIA Group Ltd (1299 HK). Shorts increased in Communication Services, Information Technology and Materials stocks, while decreasing in Utilities, Consumer Staples, Energy, Consumer Discretionary and Health Care stocks.In Japan, stocks that saw the most shorts were Seven &amp; I Holdings (3382 JP), Toshiba Corp (6502 JP), Monex Group Inc (8698 JP) and Nihon M&amp;A Center (2127 JP) while shorts decreased on Rakuten Inc (4755 JP), Fast Retailing (9983 JP), Itochu Corp (8001 JP) and ROHM Co Ltd (6963 JP). Shorts increased in Consumer Staples, Industrials, Financials and Materials, while shorts covered in the Consumer Discretionary sector.In Korea, short increased on Doosan Infracore (042670 KS), Lotte Chemical (011170 KS), Posco Chemical Co Ltd (003670 KS) and Hyundai Motor Co (005380 KS) while shorts decreased on SK Hynix (000660 KS), Celltrion Inc (068270 KS), Korea Electric Power (015760 KS) and LG Display (034220 KS). Stocks in Taiwan that saw the highest increase in shorts were TSMC (2330 TT), Pegatron Corp (4938 TT), Fitipower Integrated Tech (4961 TT) and Walsin Technology (2492 TT) while shorts were covered on Taiwan Cement (1101 TT), Evergreen Marine Corp (2603 TT), Innolux Corp (3481 TT) and Richwave Technology (4968 TT).

Asia Short Interest: Kuaishou, JD Health, Xiaomi, 7&I, Monex, Rakuten, Hynix, Hyundai, Fitipower

Japan

ITOCHU Corporation is a general trading firm handling textiles, wood, machinery, metals, food, chemicals, construction materials, commodities, and energy related products such as oil and gas. The Company operates around the world. Itochu diversifies by operating in satellite communication and data communication businesses.

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Itochu Corp (8001 JP)

C.P. Pokphand (43 HK): Suspended Pursuant To Takeovers Code

I think you could simply use the unaffected price of HK$0.96 and multiply it by the 30% premium widely seen in M&A transactions around the region...

David Blennerhassett

PPIH (7532 JP) ToSTNeT-3 Buyback - The Alliance Is Strong, so FamilyMart Is Selling Shares

PPIH will buy back 6% of shares out on 7 Sep before the open in a ToSTNeT-3 transaction. ANYONE CAN JOIN (long sale or short sale). FamilyMart...

Travis Lundy

Japan Fintech - Google Push into Mobile Payments Could Raise Competitive Intensity

Google is considering an acquisition that would allow it to compete directly in JP mobile payments. It lacks a direct consumer business but Android...

Kirk Boodry

Lawson: Primed for Mitsubishi to Take Full Control

Before markets gets the wind of Lawson’s improving profitability, DPS, and ROE, there is a decent chance that Mitsubishi could be lured into making...

Oshadhi Kumarasiri

Asia Short Interest: Kuaishou, JD Health, Xiaomi, 7&I, Monex, Rakuten, Hynix, Hyundai, Fitipower

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

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