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.

Event-Driven

Softbank stock closed up 14.5% today vs. the close on Monday as the market reacted positively to its sale of TMUS shares to Deutsche Telekom. At one point the stock was up as much as 21.5% over two days. Such a large move seems unwarranted given the news, while positive, was not especially impactful. Is this simply a short squeeze given the continuous selling of the stock since May or is the market now expecting more buybacks?

Softbank stock closed up 14.5% today vs. the close on Monday as the market reacted positively to its sale of TMUS shares to Deutsche Telekom. At one point the stock was up as much as 21.5% over two days. Such a large move seems unwarranted given the news, while positive, was not especially impactful. Is this simply a short squeeze given the continuous selling of the stock since May or is the market now expecting more buybacks?

Softbank – Still No Buyback Means Still Little Reason to Buy

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

Softbank and DT have restructured their June 2020 agreement on the sale of TMUS shares resulting in a similar value for Softbank’s TMUS stake but better optionality on the equity albeit with lower cash proceeds. That doesn’t justify a 10% move in Softbank shares today but with cash coming in markets may see this as a precursor to a buyback announcement. Alternatively, there has been such a lack of good news this quarter that any positive developments may be enough to generate some excitement. It was enough to narrow the discount from 47% to 41%, a level last seen in June but it may struggle to hold that level unless more good news follows.

Softbank and DT have restructured their June 2020 agreement on the sale of TMUS shares resulting in a similar value for Softbank’s TMUS stake but better optionality on the equity albeit with lower cash proceeds. That doesn’t justify a 10% move in Softbank shares today but with cash coming in markets may see this as a precursor to a buyback announcement. Alternatively, there has been such a lack of good news this quarter that any positive developments may be enough to generate some excitement. It was enough to narrow the discount from 47% to 41%, a level last seen in June but it may struggle to hold that level unless more good news follows.    

Softbank Group - DT Call Option Adjustment Includes Strategic Partnership but Less Cash

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that may complicate the future use of VIEs. We also give an overview of recent bond defaults. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the "In-Focus" section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that may complicate the future use of VIEs. We also give an overview of recent bond defaults.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the "In-Focus" section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. 

Asia HY Monthly - Chinese Variable Interest Entities - Lucror Analytics

Virtuous circle themes of Vision Fund IPOs, ongoing buybacks/MBOs and Alibaba expansion have been replaced by vicious circle narratives of China regulation, the reality of weak liquidity events and another pause in returns to shareholders. The net result is Softbank trades at a similar price and discount to what it did in September last year even as NASDAQ has climbed 25%. The sell off in Softbank shares since Q4 results in May was initially driven by disappointment on a buyback but the discount has stabilized and recent weakness reflects erosion in the underlying value/share.

Virtuous circle themes of Vision Fund IPOs, ongoing buybacks/MBOs and Alibaba expansion have been replaced by vicious circle narratives of China regulation, the reality of weak liquidity events and another pause in returns to shareholders. The net result is Softbank trades at a similar price and discount to what it did in September last year even as NASDAQ has climbed 25%. The sell off in Softbank shares since Q4 results in May was initially driven by disappointment on a buyback but the discount has stabilized and recent weakness reflects erosion in the underlying value/share.     

Softbank Group - The Great Unwinding Has Shifted from the Discount to Underlying Value

The Europe HY Trade Book for August 2021 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for August 2021 includes high-conviction trade ideas drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - August 2021 - Lucror Analytics

Japan

SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (9984 JP)

Softbank – Still No Buyback Means Still Little Reason to Buy

Softbank has surged on news of its TMUS stake sale to DT but is this simply a short squeeze given the continuous selling of the stock since May or...

Mio Kato

Softbank Group - DT Call Option Adjustment Includes Strategic Partnership but Less Cash

Softbank and DT have restructured an agreement on the sale of TMUS shares. That doesn’t justify the 10% move in Softbank shares but with cash...

Kirk Boodry

Asia HY Monthly - Chinese Variable Interest Entities - Lucror Analytics

In this month’s "In-Focus" section, we discuss variable interest entities (VIEs) in China, including recent developments in China and the US that...

Lucror Analytics

Softbank Group - The Great Unwinding Has Shifted from the Discount to Underlying Value

Virtuous circle themes have been replaced by vicious circle narratives and share price weakness is now driven by declines in asset value with BABA...

Kirk Boodry

Europe HY Trade Book - August 2021 - Lucror Analytics

The Europe HY Trade Book for August 2021 includes high-conviction trade ideas drawn from our European HY coverage universe, along with...

Lucror Analytics

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