Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>There are two days to go until the TOPIX April-end rebalance. </li>
<li>On an average-weighted, sector-neutral basis, the "announcement to event" trade is -0.3% from 7 April to 25 April. The rest of the buy vs sell basket is doing worse.</li>
<li>There should be ¥740bn-ish to buy and sell (each) on Wednesday at the close. If you have trades to execute in Japan, the attached spreadsheet shows where there is opportunity.</li>
</ul>


There are two days to go until the TOPIX April-end rebalance. 
On an average-weighted, sector-neutral basis, the "announcement to event" trade is -0.3% from 7 April to 25 April. The rest of the buy vs sell basket is doing worse.
There should be ¥740bn-ish to buy and sell (each) on Wednesday at the close. If you have trades to execute in Japan, the attached spreadsheet shows where there is opportunity.


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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>’s NAV discount has narrowed from around 30% in July 2021 to 17% by November 2021.</li>
<li>Institutional investors have started to increase their ownership of Kirin after trimming their stakes during the first half of the year.</li>
<li>We think that NAV discount will continue to narrow over the next few months as institutional investors come back to own Kirin following the issues with the Myanmar business.</li>
</ul>



Kirin Holdings (2503 JP)’s NAV discount has narrowed from around 30% in July 2021 to 17% by November 2021.
Institutional investors have started to increase their ownership of Kirin after trimming their stakes during the first half of the year.
We think that NAV discount will continue to narrow over the next few months as institutional investors come back to own Kirin following the issues with the Myanmar business.


Kirin: Holdco Discount Is Starting to Unwind Alongside The Return of Institutional Investors

David Blennerhassett

Last Week in Event SPACE: Singapore Air, Evergrande/Hopson, HomeCo/Aventus, Irongate, Shinsei Bank

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kirin-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:16977:1" rel="noopener">Kirin Holdings (2503 JP)</a>’s share price has underperformed its peers, <a href="https://www.smartkarma.com/entities/asahi-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10482:1" rel="noopener">Asahi Group Holdings (2502 JP)</a> and <a href="https://www.smartkarma.com/entities/sapporo-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14085:1" rel="noopener">Sapporo Holdings (2501 JP)</a> by 47.5% and 36.8% respectively during the last 10 months as big foreign funds such as Franklin Resources, Morgan Stanley and Canada Pension Plan Investment Board decided to trim their stakes, amidst human rights violation allegations regarding Kirin’s JV partner in Myanmar, Myanmar Economic Holdings (MEHL).</li>
<li>We expect Kirin to settle the matter with MEHL before February 2022. In addition, we expect the consumption of alcoholic beverages to increase following the complete removal of the state of emergency in Japan from the 1<sup>st</sup> of October 2021.</li>
<li>Meanwhile, institutional investors have started to increase their holdings over the last few months, perhaps in anticipation of a settlement for the Myanmar JV issues. We expect this change in investor sentiment to unwind Kirin’s holdco discount, which is currently at a multi-year low level.</li>
</ul>



Kirin Holdings (2503 JP)’s share price has underperformed its peers, Asahi Group Holdings (2502 JP) and Sapporo Holdings (2501 JP) by 47.5% and 36.8% respectively during the last 10 months as big foreign funds such as Franklin Resources, Morgan Stanley and Canada Pension Plan Investment Board decided to trim their stakes, amidst human rights violation allegations regarding Kirin’s JV partner in Myanmar, Myanmar Economic Holdings (MEHL).
We expect Kirin to settle the matter with MEHL before February 2022. In addition, we expect the consumption of alcoholic beverages to increase following the complete removal of the state of emergency in Japan from the 1st of October 2021.
Meanwhile, institutional investors have started to increase their holdings over the last few months, perhaps in anticipation of a settlement for the Myanmar JV issues. We expect this change in investor sentiment to unwind Kirin’s holdco discount, which is currently at a multi-year low level.


Kirin: Holdco Discount Could Unwind As Institutional Investors Return Following Myanmar JV Troubles

Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> had reported a strong improvement in its Thailand operations for 9MFY2021 suggesting that a recovery is underway and we expect this could look up further as the country opens to tourists from November 1st (ending quarantine for visitors to tourist destinations). The stock, at current levels, does not seem to factor in an earnings recovery given it is trading at conservative valuations even on current earnings.  In the insight below, we share SOTP based valuation to assess the stock's upside potential and discuss possible catalysts and timelines.</p>

Thai Beverage (THBEV SP) had reported a strong improvement in its Thailand operations for 9MFY2021 suggesting that a recovery is underway and we expect this could look up further as the country opens to tourists from November 1st (ending quarantine for visitors to tourist destinations). The stock, at current levels, does not seem to factor in an earnings recovery given it is trading at conservative valuations even on current earnings.  In the insight below, we share SOTP based valuation to assess the stock's upside potential and discuss possible catalysts and timelines.

Thai Bev (THBEV SP): Neither Recovery nor BeerCo IPO Is Priced In. SOTP Suggests Upside.

Japan

Asahi Group Holdings, Ltd. produces beer and other beverages including non-alcoholic drinks. The Company sells its products in Japan and overseas.

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Asahi Group Holdings (2502 JP)

TOPIX April Rebalance - Two Days To Go

The TOPIX April-June rebalance for FFW review and Liquidity Factor adjustment sees its first tranche of trades executed Wednesday at the close.

Travis Lundy

Kirin: Holdco Discount Is Starting to Unwind Alongside The Return of Institutional Investors

Even though Kirin's listed holdings have gained more than 200% since 2019, Kirin's share price has failed to reflect that significant increase in...

Oshadhi Kumarasiri

Last Week in Event SPACE: Singapore Air, Evergrande/Hopson, HomeCo/Aventus, Irongate, Shinsei Bank

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Kirin: Holdco Discount Could Unwind As Institutional Investors Return Following Myanmar JV Troubles

Institutional investors are starting to return to Kirin in anticipation of a settlement for the Myanmar JV issues. We expect this change in...

Oshadhi Kumarasiri

Thai Bev (THBEV SP): Neither Recovery nor BeerCo IPO Is Priced In. SOTP Suggests Upside.

SOTP based valuation analysis suggests room for near-term upside even at conservative valuation multiples assuming the worst of COVID is past us.

Devi Subhakesan

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